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Our ref. VGG
Memorandum
Confidential
To
Roosmarijn Schade
Yann Germaine
From
Marc van der Woude
Date
8 December 2009
Re
Land Purchase in the Netherlands pre-notification
We have been informed that the Dutch authorities have started pre-notification discussions
concerning the new rules on land acquisition for nature conservation purposes. We also received the
relevant texts on the basis of the Dutch rules on access to public documents (Wet Openbaarheid van
Bestuur). We noted that the Dutch authorities refer to Decision NN 8/2009 of 3 July 2009 in order
to justify the proposed subsidy scheme on the basis of Article 86 (2) EC (now 106(2) TFEU).
The VGG submits that these rules will not fundamentally alter the present situation in which a
limited group of entities reaps the benefits of very substantial subsidies. Enclosed you will find a
note in Dutch commenting and analyzing these rules.
1) The new rules
As you will read, the new text leaves many questions unanswered and does not solve the problem
which we brought to your attention in our complaint and the subsequent submissions.
First, it is unclear whether the new text also covers the transfer of land for free. As formulated at
present, this is not the case. The text only addresses the hypothesis in which the beneficiaries
receive subsidies to buy the land, but does not concern the scenario where land is passed on in kind
from the BBL (the organization in charge of land management within the Ministry of Agriculture)
or other public bodies to the beneficiaries.
The second issue also concerns access to the land. The new text lays down rules for granting
subsidies. It provides a selection process to that effect: subsidies will be allocated on the basis of a
first come first served type of rule. However, the new scheme does not concern the allocation of the
land. The new rules only determine who will get the subsidy, but are silent as to who will get the
land. According to settled case law, the public authorities enjoy a wide discretionary powers as to
whom they will sell land which is in their possession. More specifically, BBL is not bound to any
obligation to sell the land to the recipient of the subsidy. Nothing prevents the BBL from selling
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Confidential – 8 December 2009
(or, as indicated above, transferring) the land solely to the so called TBO's which are the
beneficiaries of the current regime.
A related issue concerns the designation of the land that will actually become available under the
subsidy scheme. The new rules provide that the Provinces will designate the land that can be
subsidized. The VGG fears that this designation will occur on the basis of the wishes of the so
called TBO’s.
Third, the scope of the new rules is equally unclear. They only concern land surfaces within the
EHS. Moreover, they either relate to pre-existing nature in possession of BBL or to farmland
designated by the Provinces as land that can be subsidized. It is unclear what rules will apply for the
acquisition of land that does not meet these conditions: i.e. land within the EHS that is not
designated or in possession of BBL and/or land that is not located within the EHS.
Fourth, the criteria used for the selection of the beneficiaries of the new regime remains arbitrary.
There is no objective reason why foundations and associations would be better placed to manage
nature conservation projects than other private parties, like individuals or companies. The
qualitative criteria for nature conservation can equally be met by any natural or legal person. In
addition, the rules further reduce the circle of beneficiaries by requiring a proven track record in
nature conservation. Newcomers are therefore excluded up front. The VGG submits that the new
rules will de facto lead to the same discriminatory selection as the one which underlies the present
rules. This also appears from the pre-notification in which the Dutch authorities estimate that the
number of beneficiaries ranges between only 11-50 (the number of 11 seems to correspond to the
number of the beneficiaries under the current regime). It should be noted in this context that
approximately 90% of the land owners do not operate under the legal form of a foundation or an
association.
2) Article 106(2) TFEU
The Dutch government claims that the new subsidy scheme could be justified as a service of
general economic interest. It relies in this respect of Decision NN 8/2009 mentioned above.
Although nature conservation could eventually be seen as a Service of General Economic Interest,
the case law and Decision 2005/842 require that this service is conferred on the undertakings by a
public measure. The new rules do not confer such service. Nor do they mention this possibility..
The VGG therefore fails to understand how the Dutch government can rely on Article 106(2)
TFEU.
And, even if that possibility existed, the new rules falls short of the standards set in Decision NN
8/2009. The German scheme differs considerably from the new rules in several respects.
First, the German scheme concerns the transfer of land in kind and not the grant of subsidies. In
addition, the transfer only relates to pre-existing nature sites that already belong to the State. The
scheme finds its rationale in the desire of the German authorities to leave nature conservation in the
hands of private entities. It can therefore be seen as a kind of privatization scheme.
By contrast, the new Dutch rules rely on a different logic. Their scope is not limited to land already
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Confidential – 8 December 2009
held by the State, but primarily relates to (nature and agricultural) land which is already privately
owned. The Dutch rules intervene in the market forces between private sellers (in particular
farmers) and buyers and distort a competitive process that did not exist in the German situation.
This distortion affects both the buy and sell side of the market. The subsidies confer a selective
advantage to the buyer, because they allow him to acquire land for free, and they confer an
advantage to the seller, because he will receive a price for his land that exceeds the market price.
We refer in this respect to the price increasing effect described in the enclosed memorandum.
Second, the German scheme does not cover additional costs. The beneficiary must bear all other
costs associated with the transfer (e.g. survey costs and taxes). The Dutch scheme covers all
acquisition costs.
More importantly, under the German scheme the beneficiary is supposed to support nature
conservation costs himself. If the revenues of land exploitation exceed the costs, he must report this
and transfer the surplus amounts back to the State. In the Netherlands, however, the beneficiary of
the can cumulate the acquisition subsidy with land management subsidies and subsidies destined to
cover the costs of transforming agricultural surfaces into nature sites. The combination of all these
subsidies could easily exceed the real costs of nature conservation.
Third, the Dutch scheme is of a completely different magnitude than the German system. In their
pre-notification letter, the Dutch authorities refer to an amount of 275 million for a period of five
years. Assuming that this amount is equally divided over each year, the resulting 55 million exceed
by far the 30 million threshold laid down in Article 2 of Decision 2005/842.
VGG therefore submits that the Dutch authorities cannot rely on Article 106(2) TFEU to justify the
new rules.
Conclusion
The VGG and its members are strongly opposed to the new scheme, in particular because most
members do not operate as foundations and associations. They consider that the new rules will
simply lead to a continuation of the existing discriminatory situation and therefore have a legitimate
interest to be heard.
The VGG therefore requests the Commission to be heard on the notification process.
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