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Denmark sacrifices 10% of agricultural land for forests

November 21, 2024 - Niels van der Boom

The three ruling political parties in Denmark have reached an agreement this week to convert 10% of the agricultural land area into forests and nature reserves. The goal is to reduce emissions, meet requirements regarding nitrogen emissions, and use less artificial fertilizer.

Farmers in the country are facing a huge change in the next two decades. According to the three parties, who reached an agreement on Monday, November 18, it is the largest landscape change in over a hundred years. One billion trees are set to be planted in Danish soil, and many low-lying, sensitive agricultural areas are to be returned to nature.

€5.8 billion for land acquisition
Currently, Denmark has 640,000 hectares of forest areas, accounting for nearly 15% of the total land area. For comparison, in the Netherlands, it is 11%. According to the three ruling liberal and green parties, this will soon increase to a quarter. They have set aside €5.8 billion in the government budget to buy land from farmers over the next twenty years.

A total of 250,000 hectares of agricultural land will be planted with trees. Another 140,000 hectares will be converted into nature reserves. The Danish agricultural advocacy group, Vestjysk Landboforening, is skeptical about the plans and foresees difficulties in finding land for the government's plans.

40% budget increase
The greening plan is not the only one the Danish government introduced this week. It is part of a much broader package for agriculture. The agricultural budget will be increased by €630 million to €2.2 billion by 2030. This means agriculture will receive 40% more state aid, even though it is already the most supported sector in the country. Farmers can use the money to make their operations more environmentally friendly, reduce greenhouse gas emissions, and implement various other investments and measures.

There are more changes on the horizon for farmers in Denmark. Earlier this year, the government proposed taxing livestock farmers for emitting greenhouse gases. This is expected to become reality in 2030. Dairy, pig, and sheep farmers will be affected. With this greenhouse gas tax, Denmark will be the first country worldwide to implement such a measure. Until then, the sector must do everything possible to reduce nitrogen emissions.

€140 tax per cow
In five years, livestock farmers will pay €16 per ton of emitted CO2 and methane. This tax will gradually increase to €40 per ton. In practice, according to calculations, this amounts to about €140 per cow. The government believes that voluntary emission reduction by companies is not effective enough, leading to the introduction of this drastic measure.

Niels van der Boom

Niels van der Boom is a senior market specialist in potatoes and other soft commodities at DCA Market Intelligence.