Bankruptcy, foreclosure hit Dutch dairy farmers drawn to Toledo area

Cecelia Conway, a spokesman for the partnership that operates the agriculture consultancy, says Vreba-Hoff and its Dutch customers are the victims of economic turmoil and low milk prices.

zapotosky / blade

RINKE OENEMA was about to lose his dairy farm — the dream that brought him six years earlier from the Netherlands to Henry County's Pleasant Township.

But he showed no anger, recalled Wayne Wilson, who oversaw the bankruptcy court-supervised auction of Maple Grove Dairy on Dec. 16.

Mr. Oenema and his wife, Afke, “had a very high sense of integrity,” Mr. Wilson recalled. “They were very helpful and cooperative.”

On the chilly day on which bidders gathered at the farm 60 miles southwest of Toledo near New Bavaria, the couple stood ready to explain equipment and farm operations to the buyers, said Mr. Wilson, of Bryan.

More than a decade after a Wauseon firm began luring ambitious Dutch dairy farmers to northwest Ohio, southeast Michigan, and northeast Indiana, many of the recruits have failed to achieve hoped-for riches.

A handful have returned dejected to Holland, sometimes abandoning homes purchased here in more optimistic days, other farmers said.

Construction has stalled on five farms as financing dried up, developers acknowledge. Ten others never got off the ground for the same reason, they said.

Cecelia Conway, a spokesman for the partnership that operates the agriculture consultancy, says Vreba-Hoff and its Dutch customers are the victims of economic turmoil and low milk prices.

Nearly a dozen of the Dutch farmers have been forced to file bankruptcy or defend themselves against foreclosure suits brought by lenders.

And Wauseon's Vreba-Hoff Development LLC, an agricultural consultant that recruited 65 Dutch dairy farmers to the tri-state region since the late 1990s, is at the center of a controversy over its business practices and size of fees charged to develop dairy operations for recruits.

The firm, founded by a family with deep ties to Holland, denies wrongdoing.

But, in a lawsuit pending in Fulton County Common Pleas Court in Wauseon, dairy farmers Peter Van Der Burg and his wife, Antoinette Van De Burg-Baars, accuse Vreba-Hoff, partner Willy Van Bakel, and affiliated firms of engaging in a “scheme.”

“Defendants regularly target and solicit dairy farmers with established dairy farms in the Netherlands,” the Van Der Burgs allege in the suit filed last May. “Defendants offer to purchase the dairy farmers' farms in the Netherlands in return for defendant's promises to construct local dairy farms in Ohio, Indiana, or Michigan. … Defendants … include [profit] figures and estimates which defendants know or should know to be untrue, unrealistic, and/or inflated.”

The Van De Burgs say that they turned over $2.6 million to Vreba-Hoff in 2005 and then unsuccessfully waited four years for the firm to build them a farm in northwest Ohio. Last week, a for-sale sign and snow-covered walks marked the tidy two-story yellow house in Woodville that they purchased for $300,000 in 2007.

The Van De Burgs returned to Holland last summer, according to neighbors in Woodville. They could not be reached for comment.

Vreba-Hoff's office is in a drab strip center in Wauseon. Its name is not displayed on the front of the space, although there is no mistaking its line of business. A white silhouette of a cow's head marks the door. Signs in the windows state, “No dirty boots” and “Got Milk?”

A receptionist said that Mr. Van Bakel would not comment on the situation and referred questions to spokesman Cecelia Conway, who is one of six siblings of the Vander Hoff family who operate Vreba-Hoff in partnership with Mr. Van Bakel and two of his siblings.

Their parents immigrated to the United States from Holland in the 1960s.

Ms. Conway denies there is a scheme.

Vreba-Hoff and its Dutch customers are the victims of low milk prices and the economic turmoil of the past two years, she added.

“No one could have predicted the economic meltdown that happened,” she said.

Before milk prices fell, dairy farming in the United States appealed to dairy operators in the Netherlands because land was cheaper, regulations were limited, and profits were higher.

But the occupation became more difficult in recent years as milk prices plunged to 1970s levels.

AgStar Financial Services, a lending cooperative in Mankato, Minn., that specializes in agriculture, cut off Vreba-Hoff's credit and named it in a number of lawsuits, including a $5 million suit in U.S. District Court in Toledo regarding overdue mortgages on farms in Paulding and Van Wert counties.

Vreba-Hoff is exploring alternative sources of funding but has nailed down no new loans yet, Ms. Conway said.

The company holds millions of dollars in down payments from clients awaiting construction of dairy farms.

“We are fully committed to meeting our obligations,” Ms. Conway said.

The controversy has begun to attract attention outside the region.

The Royal Dutch TV program NOVA is looking into events, and problems have been widely reported in Dutch publications geared to farming.

Vreba-Hoff is no stranger to controversy. Officials promote huge dairy farms, often consisting of 1,000 cows or more. Such farms were mostly unknown to the region before the 1990s. Neighbors who branded the operations megafarms complained about odors and environmental problems created by animal waste.

The transplants to northwest Ohio were part of a new wave of immigration to the United States and Canada in recent years by Dutch dairy farmers. But unlike earlier immigrants from Holland, few were poor.

Often their bank accounts held several million dollars from the sale of dairy farms in their homeland. They were drawn to northwest Ohio and nearby areas by ample acreage and land prices that were much lower than in the Netherlands.

Among the first farmers drawn to the tri-state region by Vreba-Hoff were Evert and Heidi Greving and his brother, who hired the firm to develop a dairy farm in Huntington, Ind., near Fort Wayne, in 2000.

Mrs. Greving said they learned about Vreba-Hoff in an advertisement in an online farming magazine. In the ads, the firm offers to oversee not only site selection and farm construction but also immigration matters and other issues.

Mr. Greving declined to say what she and her husband paid Vreba-Hoff to develop their farm, but contended that fees were double the going rates.

“There was sufficient money to do what we wanted to do,” said Mr. Greving, 41.

Development costs were so high that “we started out with little money in our operating account” he added. “We were a skinned cat. We don't have problems with them making money. But they have a moral obligation to make sure we do as well.”

The Grevings lost their farm last year after filing for bankruptcy in 2008.

Many farmers who dealt with Vreba-Hoff are in similar straits, Mr. Greving said.

“A lot of these people keep their mouths shut,” he added. “If you go bankrupt here in the states, it's socially accepted. In Europe, it's not. They feel ashamed. They'd like to crawl under a rock.”

Reached at his home in Pleasant Township, Mr. Oenema declined to comment on the bankruptcy of his dairy farm.

But court documents filed last year listed the businesses' assets at $5.1 million and its debts at $7.1 million. The value of the farm, not including livestock, was listed at $2 million. It sold for $1.4 million.

The Van Der Burgs, who signed up with Vreba-Hoff in 2005, were successful dairy farmers in Ijsselstein, a Dutch town in the province of Utrecht dating from the 14th century.

Their court complaint states that they sold their farm through a Dutch firm controlled by Vreba-Hoff for $4.2 million. They paid off a mortgage and turned over $3 million to the Wauseon firm for a farm in northwest Ohio, according to the complaint.

Vreba-Hoff later returned $492,000 but still holds the remainder, it states.

“Although four years have passed … defendants have failed or refused to obtain construction financing, and acknowledged that such financing cannot be obtained,” the complaint continues.

The Van Der Burgs said they unsuccessfully demanded the return of the money last April.

Two Dutch firms named in the complaint that handled the sale of the couple's farm in the Netherlands have demanded to be dismissed from the suit.

Van Bakel Onroerend Goed BV and Vremelkvee BV deny that they are part of Vreba-Hoff and say they are outside the jurisdiction of Ohio courts under the terms of an international treaty known as the Hague Convention.

The case in Fulton County is scheduled to be heard by a jury Nov. 3.

Contact Gary Pakulski at:gpakulski@theblade.comor 419-724-6082.