Rural Laws: October, 1998 - Number #18

In 1996, the Netherlands had about two million hectares of farm land, including 109,000 hectares devoted to horticulture and 12,200 hectares of flowers and vegetables grown under glass. There are about 108,000 farms in the Netherlands, and a total of 135,000 regular hired farm workers, but only 20 percent, 22,000 farms, hire regular farm workers. In addition, there are about 123,000 seasonal workers employed for four-to-six week harvests of asparagus, fruit, bulbs and strawberries.

The horticultural sector accounts for about 26 percent of annual farm sales, and most horticultural operations are small. The average size of a greenhouse is one hectare, or 10,000 square meters, and a greenhouse of this size normally has four to five workers. Acreage devoted to horticulture has been declining slightly since the 1960s, but the number of hectares under glass has doubled since 1960. At present, the industry is faced with aging growers, increased competition from low-cost producers and the prospect of more stringent environmental regulations.

Horticultural operations are labor intensive--labor accounts for about 30 percent of rose production costs. Most farm workers earn the minimum wage of f2400 a month, which results in an after-tax or net pay of f1600 to f1700 a month, or about $900 a month. Horticultural operations covered by a union contract between regional employer associations such as the WLTO and unions pay f100 a month more than the minimum, or f2500 to f3200 a month for a 38-hour work week--the government lowered taxes on persons who earn up to 130 percent of the minimum wage, which is another reason the WLTO wants a wage decrease. (The WLTO is one of six regional employer associations; WLTO represents employers in collective bargaining and lobbying with government. The WLTO was formed in 1991, as a result of the merger of separate Catholic and Protestant employer organizations.)

Payroll taxes and benefits add 40 percent to these monthly wages. In negotiations that began in March 1998, growers are trying to reduce wages by about f100 a month, back to the minimum wage, citing low prices and increased world competition. Most of the hired farm workers are local Dutch residents, but it is common for some of the hired workers to be settled immigrants--especially Turks or Moroccans. The major farm labor issues seem to be: (1) availability of workers for hire; and (2) compatibility. Hired workers typically work alongside the grower.

A modern 1.5-hectare rose operation in September 1998 employed eight workers, including two Moroccans. Major renovations in 1990 added: (1) rose sorting and packing machinery--roses are hung on a machine that sizes them and cuts stems, and then bundles them in groups of ten, with the bundles placed in plastic boxes filled with water until they are sold; and (2) water recovery systems. Roses are planted in plastic bags of mulch laid in troughs, with a drip irrigation system delivering water to each plant. Excess water is collected in the tray underneath the mulch, and returned to a recycling facility on the farm. Most newer greenhouses include lighting systems that increase photosynthesis in the winter months, when rose prices are highest.

Most roses are sold through the Bloemenveiling Aalsmeer, owned by 5,000 growers. At 750,000 square meters, it is the size of 125 football fields and is one of the largest buildings in the world. Most flowers and potted plants are brought to the auction by commercial delivery services. They are packed in plastic boxes on wheeled carts, each with two or three shelves holding, for example, 45 plastic boxes each containing 20 bundles of roses. Selling involves moving these carts along a slow-moving track past buyers seated facing the auction clocks. As each cart moves by, the price begins high, and the first buyer to push his button is the buyer of that cart. Carts then exit the sales floor, and buyer lots are assembled for trucking to distributors and retailers. Roses cut and packed on one day are sold the next, in transit the third day and on sale the fourth day.

Typical prices are about f0.50 or $0.30 a rose stem, with total production costs of f0.35 a stem. Auction costs are five to six percent. There is little contracting in the Dutch flower industry, perhaps reflecting the small size of most growers and retailers, as well as the dominance of the auction--flowers from, for example, Kenya that are sold in Europe are auctioned in Holland.

US Flowers. Retail floral sales in the US total about $14 billion a year--$8 billion from sales of potted plants and vases, and $6 billion from fresh flowers--but the business is very fragmented. There are about 9,700 US flower growers, 1,000 wholesalers, 27,000 retail florists, and 23,000 floral operations in supermarkets. The industry spends about $100 million a year to promote flower sales.

The largest player is USA Floral, a company whose sales are projected to be $560 million in 1998; it buys smaller companies and permits them to keep operating under their own names. Number two is Dole Food Company, with sales of $4.3 billion a year, including $200 million from flowers. In 1998, Dole bought the largest flower wholesaler in Florida, flower farms in South America, and in August 1998 announced plans to acquire CCI Farms, a grower and marketer of fresh flowers.

About 70 percent of the flowers consumed in the US are imported, most through Miami airport. Flowers are harvested in one day, and put on planes that arrive between 4 am and 6 am in Miami. About 100 wholesalers near the Miami airport receive the flowers that are held at 33[[ring]] F, sorted and arranged into bouquets, and put on trucks and planes bound for US retailers.

Asparagus. The 1,200 Dutch growers who produce white asparagus hire 8,000 to 10,000 seasonal and part-time workers for the harvest in May and June. The asparagus is grown under plastic or in the open air, dug up, and sold fresh to Dutch and German consumers. The average farm is small, with perhaps two acres of white asparagus, but most farmers aim to hire four or five workers an hectare.

Most harvest workers are Dutch, but the efforts of at least a few farmers to hire Polish workers generated controversy in the mid-1990s, and highlighted differences between German and Dutch treatment of Polish "tourist workers." Since the early 1980s, Poles in the Netherlands as tourists have been employed in the bulb-growing industry in the province of North Holland. In 1990, their employment was highlighted when the Employment Service threatened to stop unemployment insurance payments for unemployed Dutch workers if they did not accept seasonal farm jobs.

In 1992-93, the focus shifted to labor shortages for the asparagus and strawberry harvests in Limburg. When the media spotlighted the hiring of Poles without work permits, 600 work permits were made available in 1993, with a warning that employers had to get serious about finding Dutch workers. Seasonal workers, those employed less than two months, account for about five percent of the workers.

In 1994, the Minister of Social Affairs, which has responsibility under the Wet Arbeid Vreemdelingen (Foreign Labour Act) to issue work permits to non-EU foreigners, refused to issue work permits for seasonal Poles in the Limburg area, promised intensified enforcement against illegal workers, and advised farmers to make use of a special project, ASA, to find seasonal workers. The employers countered that they wanted Poles. The Limburg employers group LLTB sued the government to get work permits for Poles, and won. However, they in turned were sued by a union, Voedingsbond FNV, which charged that employers were underpaying workers.

The ASA project, a government-financed effort to place unemployed Dutch workers in seasonal farm jobs, was deemed a disaster, with every hour of farm work provided costing the government f50, or about $30.

In 1995, the government again denied permits for Poles and farmers sued, but this time they lost--no permits were issued to Poles. The union, Voedingsbond FNV, announced that it would pay strike benefits to Dutch workers who refused "sub-wage" jobs harvesting asparagus. In 1996, there were no disputes, although some workers were recruited in Ireland and Portugal.

In 1998, asylum applicants were permitted to work for up two 12 weeks in agriculture, and 2,000 found jobs picking fruit.

Under Dutch and EU law, Dutch employers wanting to hire non-EU workers must request workers with the ES, and accept referrals from anywhere in the EU, providing any workers recruited with in-bound transportation and accommodations. In 1986, court rulings held that employers and seasonal workers had to pay social insurance contributions, but ad hoc decisions permitted some seasonal farm workers to remain outside the system until the early 1990s, when it began to be enforced. Unemployed Dutch workers were also allowed to earn up to f600 a month in agriculture and still draw UI benefits.