Dutch subsidy programme expected to reduce cattle numbers by around 64,000
The US Department of Agriculture’s Foreign Agricultural Service (FAS) said tighter environmental rules, higher animal-welfare requirements and margins that have narrowed since early 2026 could lead dairy farms to close over the longer term.
Dutch dairy farmers have already slaughtered part of their herds following the withdrawal of an EU exemption permitting additional manure application to pasture. The exemption, known as the nitrates derogation, was linked to rules governing water quality. Under the subsidy programme approved in April 2026, farmers can receive compensation for cutting cow numbers by 10% to 20% without reducing their grassland area. The expected reduction is around 64,000 cows.
On June 26, 2026, the new Dutch cabinet proposed a separate €20 billion policy running until 2035 that would limit dairy production. Its objectives include lowering nitrogen emissions from farming and other sectors and restoring nature. The proposal would establish ammonia-emission standards for individual farms and cap dairy stocking density at 2.6 livestock units per hectare by 2035.
The Dutch proposal also includes nitrogen-sensitive buffer zones surrounding Natura 2000 sites. It specifies one-kilometre zones around 15 areas and 500-metre zones around approximately 85 others. An estimated 4,000 livestock farmers, predominantly dairy producers, could be affected. Approval by the Dutch Senate is still required.
Denmark’s government climate agreement, passed on November 18, 2024, combined the agricultural carbon levy with the conversion of 15% of farmland into forest. FAS expects the legislation to encourage more intensive production and larger farms after 2027.
In Germany, stringent environmental regulation is contributing to a reduction in cattle numbers. Growing participation in retailers’ animal-welfare labelling schemes is also contributing: those programmes require farmers to provide additional space for each animal.
