ACM: sustain­able farming requires better compensa­tion

Farmers who adopt more sustainable practices are not guaranteed to recoup their additional costs. The fifth Agro-Nutri Monitor again highlights the same bottlenecks in the food supply chain. The Netherlands Authority for Consumers and Markets (ACM) warns that, without further action, the agricultural sustainability targets for 2030 will slip out of reach. The regulator is calling on the Ministry of Agriculture, Fisheries, Food Security and Nature (LVVN) to take a comprehensive approach. Demand for certified products and the distribution of costs and revenues are central to that approach.

Compensation for organic products falls short

For many farmers, the additional costs in 2024 exceeded the price premiums they received. On average, the premiums for the organic products studied were insufficient to cover those additional costs. This applies to organic potatoes, green beans, red cabbage, and carrots. Compensation also fell short for organic milk, cheese, and pork.

The picture is more positive for the other sustainability labels mentioned. Farmers certified under Beter voor Natuur & Boer receive a price premium that, on average, covers their additional costs. The same applies to On the Way to PlanetProof and Beter Leven 1 star. Even so, some of these farmers consider the compensation insufficient.

Sustainability labels often unfamiliar in export markets

Dutch sustainability labels are not always known or recognized abroad. As a result, certified products are often exported at the lower price paid for conventional products. Consumers abroad also often choose local products carrying their own certification labels.

The ACM recommends making Dutch sustainability performance easier to recognize and compare. Comparable Dutch certification labels could be brought together under a single label for exports. The ACM also recommends support with applications for European promotional funding. This support is intended for producer organizations and industry associations.

Narrower price gaps and more cooperation

Consumers value sustainability but are generally unwilling to pay a higher price. This remains the case as long as a cheaper conventional product is available. The ACM therefore recommends reducing the price gap on a lasting basis. Incorporating environmental and societal costs into consumer prices can help achieve this.

According to the ACM, cooperation between producers can also reduce costs. Examples include sharing machinery and coordinating logistics, processing, and knowledge sharing. Smaller producers in particular can benefit from economies of scale in this way. The cost savings can translate into lower retail prices for consumers.

Cooperation can also strengthen producers’ bargaining position with major buyers. This can contribute to a more favorable distribution of costs, revenues, and margins throughout the supply chain.

Acm.nl