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The reason inflation is so high is largely due to rising food prices. However, if one pays more attention to fairness and the environment, food must actually cost more.
Dairy farmer Matthias Pitzer doesn’t have many cows. On his farm in Bad Endbach in Hesse, he has 50 dairy cows and several beef cattle. He produces milk according to organic standards. There is fresh green grass to eat in the pasture, and the living space of the cows is relatively large. But that doesn’t do him much good in the price war over milk prices: “There’s a lot of price pressure. Everything is getting more expensive for us. On the other hand, consumers are trying to save.”
“Prices are totally opaque”
After all: Pitzer is part of the “You’re the Boss Here” initiative. He is one of those farmers whose income and retail price of milk is determined by a group of consumers. Farmers often don’t know this in advance, said Nicolas Barthelmé, head of the initiative. Often, it’s the dairies and retailers who set the price: “The price is completely opaque to the consumer. They don’t know where the money is going. That’s the problem.”
As far as the milk in “You are the boss here” is concerned, the initiative decided on a price of 1.59 euros per liter. Farmers should keep 0.63 EUR. The average is 0.50 euros. The problem here is not the consumer, but the retail industry, says Barthelmé: “Billions in sales come from the food industry. The money is just misallocated.” Also: animal and nature conservation is not free. Farmers are currently not getting enough food.
The corresponding cost to society
However, according to scientists at the University of Greifswald, simply paying farmers fairly will never lead to the prices that actually have to be paid in shops. Environmental economist Amelie Mischalke studies the so-called “true cost” of food. These “true prices” are the costs of products “generated externally but paid for by our society”.
In short: when consumers pay for things like apples or clothes, there are other “real costs” behind the real costs we share as a society. This includes, for example, collateral damage to our environment or a consequence of climate change if high emissions occur during food production or groundwater is polluted. Health costs are also taken into account, eg due to poor working conditions – or the impact of food on human health.
Especially the meat will be much more expensive
The researchers at the University of Greifswald calculated: If, for example, all of the above factors were included in the case of minced meat, the current average price in discount stores is 8 euros per kilo, the real cost would be almost more 175% – then minced meat is no longer 8 euros, but less than 22 euros per kilo. For milk, at the current average price of €1.15, a surcharge of 112% would be required – which would result in a price of €2.44 per liter. For a kilo of apples – currently at €1.96 – the “true cost” surcharge is still relatively low at 8%, but also leads to a price of €2.12.
Applying such a concept is not easy. However, the idea is that the cost is mainly borne by the manufacturers in the supply chain. For example, a fertilizer that is harmful to the environment becomes more expensive, as does the end product. “The idea is that supply and demand will eventually shift over the long term.”
What about those with social needs?
This is where the critique starts: what about those who already find themselves unable to afford groceries? “I think it is absolutely questionable to solve social difficulties with an ecological and sustainable way of life,” said Yasmin Alinaghi, governor of the Hesse Equal Welfare Association. The problem is not that prices should be higher, but that interest rates – like citizen income – are too low for the precarious.
It is too early to consider implementing the “true cost” concept. Environmental economist Amelie Mischalke said it was more about keeping the discussion going. Implementation must be preceded by a significant political process. In Germany alone, the concept would be difficult to implement without international cooperation due to its reliance on global trade. Still: “The pricing clearly shows what’s wrong with our food production,” Mischalke said.
Everyone lends a hand on the farm
Dairy farmer Matthias Pitzer might agree. Currently, he has hardly any problems with his milk production. He can keep production costs low because the whole family is involved. Holidays, he said, often come by the wayside. However, he also sees that things may be more difficult elsewhere. The rising price of his milk means he can invest in animal welfare.
In the end, he had a simple question: “Are you farming for nature and the farm, or do you just want to mass produce?”