When we buy an orange or pineapple in the supermarket, we imagine that the price shown reflects the costs involved in producing it. This logic leads us to believe that intensively farmed and low-welfare food items are cheaper to put on the shelf. However, new research from organic trading company Eosta, Soil & More, and financial consultants EY and, co-sponsored by Triodos Bank, reveals that the social and environmental implications of production make the ‘true cost’ of food much higher than you may think.
The study, titled ‘True Cost Accounting in Farming and Finance’ and released in June 2017, considered the impact on health and society, as well as the detriments and negative impacts on our climate, biodiversity, water use and soils. By considering these six elements, the researchers were able to build a broader picture of how food systems operate in the wider context of production.
“Providing a measure of what these costs are and their social and environmental consequences would equip consumers with enough information to make informed decisions that reflect their values”
For example, while organic and non-organic apples were found to be broadly similar on many facets, the difference in impact on health was dramatic. This difference is attributed to the heavy use of pesticides, particularly at a late stage of growing, having negative health consequences for pickers during harvest. From these stats, Eosta were able to calculate that buying organic apples would save 27 sick days, per hectare per year, meaning a 17 pence (19 euro cents) per kilo advantage for organic apples. They also identified some other surprising impacts in their research, including:
- Buy one organic pineapple and save 125 litres of greenhouse gases
- Buy organic pears and save 6m3 of fertile soil (per 1000sqm and year)
- Buy organic grapes and save 14.708 litres of water (per 100sqm and year)
Long-term organic advocate HRH Prince Charles welcomed the study, highlighting that a concentration on the financial bottom line would only derail efforts to maintain and improve our agricultural land to provide sustainability and food security. As Eosta CEO Volkert Engelsman pointed out, “The report makes clear that organic food is not too expensive, but rather conventional food is too cheap.”
Providing a measure of what these costs are and their social and environmental consequences would equip consumers with enough information to make informed decisions that reflect their values. This is a major step in empowering the consumer by providing transparency and reflects our own commitments to providing full transparency around where our customers’ savings and investments are lent.
When it comes to food and farming, Triodos Bank recognises the impact that certain food systems can have on our planet and the people who are part of the production cycle. For this reason, we only invest in organic, sustainable farming as we believe it recognises the relationship between our environment, our health and the food we eat. Organic farming avoids the use of pesticides and chemical fertilisers and maintains the highest standards of animal welfare which, ultimately, means less strain on the ecology of our planet.
In the future, the true cost of products should be on clear display. As consumers we vote on the world we want to see through the daily purchases we make. By making hidden costs transparent and informing the customer, we can allow people to make an informed decision and spend or save their money in a way that reflects their values.
The full report, ‘True Cost Accounting in Farming and Finance’, can be found here.
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