The scheme aims to improve water quality through limiting phosphate production from dairy cattle manure. It places an obligation on farmers to hold sufficient phosphate rights to account for the amount of phosphate produced by their dairy cattle. Each dairy farmer will be given a certain amount of phosphate rights for free, however they can also buy further rights on the market.
It also aims to promote a shift to land-based farming by providing temporary, non-tradable rights to land based farms which can fully absorb all the phosphate from their own manure production on their land.
The Commission gave its approval for the system under EU state aid rules in December, stating that given the high density of dairy cattle in the Netherlands, phosphate in dairy cattle manure represented a significant environmental concern.