The economic crisis also cuts oxygen to organic food

Kuznets was right, and we refer you to the end for the full explanation. In France, BIO producers are trembling. As Le Monde reports, the crisis has hit us hard, so much so that many consortia and companies that produce BIO, such as Bretagne Viande Bio (BVB), have had to limit production and the association of new operators because there is no demand for an ecological product at a higher cost. Indeed there have been cases of producers forced to abandon organic certification.

This example illustrates the serious crisis facing organic farming, in the context of the sharp slowdown in French consumption and greater price sensitivity. If the signs of a slowdown were already perceptible in 2021, they became more pronounced in 2022. “Almost 600 million euros have evaporated within a year and the organic market has dropped to 12.076 billion euros,” says Laure Verdeau, director of Agence Bio, the public body responsible for coordinating the organic ecosystem. “As a result, the percentage of French people who consume organic food has dropped from 6.4% to 6%”.

According to data published on Thursday 1 June by the Agence bio, the French have put fewer organic-certified products in their supermarket carts. Sales in supermarkets fell by 4.6%. However, supermarkets remain the main channel for marketing organic products, accounting for 53% of total sales.

A return to “Normal” products

Loyal customers of specialty stores like Biocoop and La Vie claire also tried to keep money in their wallets. In these stores they paid 8.6% less. More bad news is that the share of organic foods in the restaurant industry, already reduced to a tiny fraction, has decreased further from 2% to 1%. The only positive points, highlighted by Agence bio in its annual report, are the good performance of direct sales, up by 3.9%, and the gain in market shares in collective catering, with an increase of 18%. But this is not enough to compensate for the market downturn.

This sudden slowdown, which will be particularly evident in 2022, after years of double-digit growth, has taken all players in the organic sector by surprise. All sectors – eggs, milk, pork, fruit and vegetables and cereals – have been thrown into turmoil. “We have gone from a production of 630 million liters of milk to 1.3 billion liters in five years,” says Nathalie Delagnes, an Aveyron farmer with 50 dairy cows and president of the Biolait cooperative, which collects milk nationwide.

Households have to deal with inflation

France was one of the European countries least affected by inflation, above all due to the energy policy which forcibly contained the fallout of costs on bills, but inflation was in any case higher than 5%. The increase in nominal wages has not managed to follow prices, even if there have been increases, and therefore families have to choose where to cut their consumption. Bio, evidently seen as a luxury, was the first sector to be set aside.

Kuznets was right

The application of the Kuznets curve hypothesis to the nature conservation sector explains the current situation and should make political leaders judge differently.

Kuznets in the 1950s and 1960s hypothesized that increasing per capita income would improve its distribution. Applied to the environment we have the theory that at a certain point, as per capita income increases, we can see an improvement in environmental protection. A society that is richer on an individual level, having satisfied its primary needs, can afford to protect the environment, eat organic foods, etc. Kuznets lived in a world of growing personal incomes, but the curve can also work the other way around: less income, less bio, less environmental protection.

This is why a governor should deal with people's incomes and not with carbon "ambitious goals" …

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The article The economic crisis cuts oxygen to organic food too comes from Scenari Economici .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-crisi-economica-taglia-lossigeno-anche-al-cibo-bio/ on Sun, 04 Jun 2023 08:24:45 +0000.