New plan launched in Brussels for EU food price reform
Consumer backs EU-initiative: higher prices for animal based proteins and lower for plant based food
New structure solves various issues at once without raising consumer expenses
Around 60% of German, French and Dutch consumers are willing to pay a higher price for regular meat and dairy in order to reduce prices of plant based or organically produced food. This was concluded in a representative Ipsos report commissioned by the True Animal Protein Price (TAPP) Coalition. These results form a direct endorsement for the European Parliament that already adopted an amendment to differentiate VATs to create this new true pricing structure. A carefully balanced implementation plan, based on a report commissioned by TAPP Coalition -that is now backed by public majority- was presented in Brussels and handed over today to Wim Debeuckelaere from the EU Commission (DG Health Unit Farm to Fork Strategy).
Confirming figures
In this plan of the TAPP Coalition, policy options are suggested to implement the necessary food pricing restructure. The new structure can be formed by applying a VAT up to 21% on meat, dairy and eggs by 2025. Due to this rate prices will slightly increase. For example in Germany the consumer price of a liter of milk will be raised by 10 eurocents while a pound of chicken will be 30 eurocents extra in the true pricing structure. Consumers would be compensated by recycling this ‘true price’ tax increase by a new 0% VAT on vegetables, fruit, bread, grains, organic food and meat and dairy alternatives. As a result of this plan a well-filled shopping basket will remain the same price: the price increases on some products are evened out by the price decreases on many other products. Tax rates can thus steer towards more realistic, true pricing with benefits for health, climate, animal welfare and quality farming; themes that matter to consumers according to Ipsos.
Research agency CE Delft validated and calculated the plan and deems it realistic and feasible. Their calculations show that the wish for food changes of the majority of the German, French and Dutch can indeed be implemented. The new plan is one way to introduce the true pricing principle for food in Europe.
True Pricing
True pricing is about including all real, societal costs – such as biodiversity loss, greenhouse gas emissions and healthcare costs - in the price. The quality of meat and meat production, as well as a fair income for farmers make part of the reasoning behind true pricing.
Jeroom Remmers, director of the TAPP Coalition: “Currently the external societal costs of the animal based products on our daily menus are not paid for. People know that this is not the best way to preserve our piece of meat or dairy product and make it future proof. We all know that the European Union can be more progressive than its member states, so the fact that there is broad support in key member states is a clear signal. It’s our firm belief that plenty more member states will follow us on this journey to fair prices.
According to report of CE Delft (with scientific support from Egologic institute / I4CE) the new true pricing structure will reduce greenhouse gas emissions and increase demand for plant based and organic food, enabling farmers to switch to organic and sustainable farming methods and have a better income.
The EU Green Deal for Food (Farm to Fork strategy) wrote in 2020 that ‘EU tax systems should also aim to ensure that the price of different foods reflects their real costs in terms of use of finite natural resources, pollution, GHG emissions and other environmental externalities’. The EU Commissioned allowed a 0% VAT rate on sustainable or healthy food products. The Framework for Sustainable Food Systems, to be published this autumn, is a next step to implement the Farm to Fork Strategy.
Consumer benefits
The plan of the coalition helps to increase healthy food consumption and reduce red and processed meat consumption which will boost public health and reduce healthcare costs. Overall the consumer will not pay more for his groceries the calculations show. As an extra, the government can opt for a calculated and proved method that will decrease food expenses overall. This can be achieved by following the example of countries like the UK giving consumers food vouchers of up to 200 UK pound (Healthy Start Food Vouchers) to reduce food expenses and boost healthier buying. This governmental add-on will even further increase the positive effects of the core plan. It will boost the purchasing power of consumers and stimulate a healthy intake of fruit and vegetables; results that will help achieve the set governmental plans for the coming years.
“One of the misconceptions about true pricing is that it will make animal based protein les attainable, especially to lower income groups. This is once again debunked by this research: everybody is still very much able to buy what they fancy. In fact we are solving an issue that has been around for decades; healthy food will become more affordable for everyone, states Gerben-Jan Gerbrandy, former MEP and advisory board member of the TAPP Coalition.
TAPP Coalition
TAPP is a Dutch coalition of different but likeminded businesses, farmers, scientists and NGOs across the whole political spectrum, they agree on one thing: the importance of introducing true prices for meat and dairy. In the Netherlands the coalition has successfully put true pricing on the political agenda: 63% supports a true and slightly higher meat price provided the funds are used for the benefit of the consumer and the farmer. This has led to various responsible Dutch ministers backing the plan and further investigating it for implementation.
Link to CE Delft report 'Pay as you eat dairy, eggs and meat', the Powerpoint Presentation event 23rd March, the link to the Ipsos report and the top-10 priorities for the EU Framework for Sustainable Food Systems.
Proveg wrote this article about the Ipsos survey and TAPP Coalition proposals.
Media coverage:
POLITICO Pro Morning Agri and Food 23rd March (Sustainability news by B. BRZEZIŃSKI
with D. DE LORENZO, S.A. AARUP and L. GUILLOT)
Enquête : Les Européens sont favorables à une TVA de 0 % sur les aliments sains et durables et à une augmentation du prix de la viande - vegconomist - le magazine de l'économie végane
Survey: Europeans Support 0% VAT on Healthy, Sustainable Foods & Raising Meat Prices - NXTaltfoods
In short the TAPP Coalition proposal
0% VAT on fruit and vegetables and healthy/ sustainable food
The proposal entails that the VAT on fruit and vegetables is reduced to 0%. This rate will also apply to plant-based meat and dairy substitutes, nuts, bread, whole wheat products and organic food)
A fair, slightly higher price on meat including all costs
This can be realized with applying a fair meat price in 2030 with all environmental costs like CO2 being incorporated into the meat price. As a result, in 2030 chicken meat will become 20 eurocents more expensive per 100 gram and beef and pork will become 57 and 45 eurocents more expensive per 100 gram (numbers for the Netherlands). For France: As a result, in 2030 chicken meat will become 15 eurocents more expensive per 100 gram and beef and pork will become 81 and 17 eurocents per 100 gram more expensive. For Germany: As a result, in 2030 chicken meat will become 14 eurocents more expensive per 100 gram and beef and pork will become 88 and 18 eurocents per 100 gram more expensive. This can be implemented by a new consumer tax. Applying the normal (highest) VAT rate is another option with a lower price increase compared to the previous option.
Financial compensation for low income groups
For low-income households (20% lowest income groups) compensation is given, to make sure all consumers, poor or rich, can still afford to buy meat for its true price. This equals to 120 euro per year per capita for the 20% lowest income groups. This could be money or free food vouchers for healthy, sustainable food.
Subsidies for farmers
Livestock farmers receive at least 10.000 euro extra per year for producing with higher standards for animal welfare and/or sustainability. This amount compensates for the increasingly higher costs they have to incur to produce in a more animal friendly or environmentally friendly way (e.g., reduce CO2 emissions, or for reducing animals per stable for better animal welfare and reducing pollution).