01/27/2023
Seeing Sustainability in the January Slump
Dear readers,
January is the month when prices for canned tomatoes fall by as much as half. Large retailers offer special sales promotions throughout the year, of course, but in January they are particularly noticeable. Cash flow slumps in January. And consumers are encouraged to go out bargain-hunting. We also see this when it comes to fruit and vegetables. Suddenly ubiquitous veggies like leek are cheaper and promotions tempt us to buy Brussels sprouts.
This is, of course, anecdotal, and it only reflects part of the global reality. The World Bank expects global food prices to remain high. One reason for this is the high price of fertilizer. It remains an obstacle to easing the situation, as does the fact that states are banning exports of agricultural goods in order to keep them available for their own populations. This is a serious issue with regard to the global food situation. And the World Bank thus warns in its sobering and bleak report that the high prices for food worldwide will negatively impact the health of children in their early years.
If food prices are too high, a segment of the population simply cannot afford a sufficient and healthy diet. Jakob Kern, a Swiss national from the UN's World Food Program, pointed this out in an interview with the Tages-Anzeiger newspaper in early January. Hunger occurs not only when food is unavailable, but especially when people cannot afford to buy food. That's why, for example, in Somalia, the World Food Program provides financial support to 75 percent of the people rather than food aid.
Price is the decisive factor for supply. What applies at the international level also applies to richer countries. In Germany, inflation has been fueled in the past year primarily by rising prices for food and energy. “Exploding costs of livestock feed and energy are making milk products in particular more and more expensive,” reports the German business magazine Capital. Especially prices for organic milk have increased dramatically. Consumers have reacted very sensitively to this development. A 30 percent drop in organic milk sales was the result. Hence, affordability is clearly an important factor determining consumer demand.
In the meantime, the tide has turned in Germany. The prices of organic and conventional milk are converging. For organic farmers, however, this price convergence is painful. After all, the premium charged for organic milk is disappearing. The fact that the organic sector is in the midst of a “race to the bottom” is also indicated by the insolvency of the Müller organic grocery chain in Switzerland. Organic has become a victim of its own success, comments the Basler Zeitung. But this also means: Consumer success can be maintained only if the price is right.
And this brings us to the heart of the issue: Sustainability also has a social dimension. And an economic one – price is an integral part of sustainability. In other words: Comprehensive sustainability also takes into account the affordability of products. In Switzerland, the vote on the agricultural initiatives in 2021 showed that the voters reject the increase in the cost of regional production through the abandonment of plant protection products. And as opinion surveys show, price is also an important factor for the acceptance of new breeding methods. Sixty-nine percent of survey respondents are in favor of new breeding methods if genome-edited plants make regional vegetables and fruit more affordable.
Productive agriculture always relies on the best available technologies for each area of application. As Andreas Hierstein writes in the NZZ am Sonntag: “Many life cycle assessments confirm that glyphosate is often the most environmentally friendly method of controlling weeds.” He also points to the enormous losses suffered by tea growers in Sri Lanka as a result of the activist-driven ban on glyphosate. But the situation deteriorated even further: The country slid into famine because of the ban there on pesticides and fertilizers. According to the World Bank report cited above, annual consumer price inflation for food in Sri Lanka was 64.4 percent in December 2022. The government was forced to backpedal. Demonizing technologies is a road to nowhere.
The worldwide market share of organic food products today is two percent. “People should be prepared to pay more for products that are more sustainable” – these words are commonly heard, but the argument is not a valid one. After all, only what is also affordable can be sustainable. There is an element of sustainability in the “January slump” and the attention it brings to the price of agricultural products. Something is really only sustainable if it is sustainable for everyone. Comprehensive sustainability takes into consideration the relevant ecological, economic, and social dimensions, while trying to balance the sometimes conflicting goals of this triumvirate. And being sustainable has to do with more than just the environment. Just as resource efficiency encompasses not only natural resources, but also energy, labor, and finance.
Sustainability that is comprehensive can only be guaranteed by an agricultural sector that minimizes ecological impacts, without losing sight of productivity. It uses the most efficient technologies. For example, good use of data promotes the efficiency of agricultural production. Data also creates transparency. It allows us to see what has truly been produced sustainably. And it enables one thing that will become key in the future of the food sector: “More data, less woke”.
The swiss-food editorial team
