Most Dutch consumers are unwilling to pay higher prices for organic food and this is the main obstacle to creating a more sustainable agricultural sector, according to a new study by the Consumer and Markets Authority ACM.
The research, carried out on behalf of the Ministry of Agriculture, examined the price formation in the organic food chain and found that the additional costs incurred by farmers to produce sustainable food are covered by the prices they receive. . In addition, “in most cases, supermarkets make lower net profits on organic products,” the ACM said.
Yet although a small group of consumers are willing to pay a higher price for organic food, more consumers will have to join them if the supply of organic food is to be increased, as the government intends.
The ACM has made a number of recommendations to address this barrier to growing organic food sales. He suggests introducing subsidies or lowering the value added tax, which is currently 9% on food.
He also suggests that increased cooperation between certification labels at EU level “will make it easier for producers to charge higher prices for these products abroad as well”.
Nevertheless, measures to stimulate demand are unlikely to be enough, according to the ACM.
“Measures to restrict production may also be necessary, such as agreements between farmers on higher sustainability standards, raising minimum regulatory requirements for sustainability, voluntary buyouts of farmers who use farming methods. regular production and are not able to change, or even expropriation of land, ”says ACM.
“Such measures obviously have far-reaching consequences for the agricultural sector, which will need to be studied in more detail.”
ACM chief Martijn Snoep told the Volkskrant in an interview that only 5% of Dutch farmland is currently used for organic farming and that figure is much lower than the rest of the EU.
“With the current growth rate, we will not meet the EU target of 25% organic farming by 2030,” he said.
Organic farming industry association Bionext said last month that organic produce is slowly gaining popularity in Dutch supermarkets, with sales rising nearly 13% last year. Milk, yogurt and eggs are the best-selling items, along with products with a longer shelf life, an increase possibly caused by coronavirus-related storage.
The reason the Netherlands is slow to catch up with its neighbors is the continued focus of supermarkets on prices, retail expert Paul Moers told Bionext.
“The emphasis on price has a lot to do with our culture. We Dutch are eternal traders and the emphasis is on paying as little as possible, ”he said. “If we want to stimulate the organic market, we need to discuss other aspects besides the price, and supermarkets should take more responsibility in this regard.”
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