“Germany Bonus”: Consumers should pay more for local food

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The farmers' association wants to make its idea palatable to consumers to pay a premium for goods with guaranteed German origin.

At the start of the Green Week in Berlin, Farmer President Joachim Rukwied brought up a “Germany Bonus” for butter, schnitzel and salad from Germany on Wednesday.

“The farmers need their work to be valued, but in the end they also need to be valued in the form of higher prices,” he said.

Agricultural products from the inland offer "more sustainability", which has to be paid for.

It remains to be seen whether such a concept can be implemented in practice.

It raises questions in terms of antitrust and European law.

Above all, however, Rukwied needs allies - above all supermarkets and discounters.

They are not fundamentally averse, but still see plenty of need for clarification in agriculture itself.

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The farmers, so critics, wanted on the one hand to participate in world markets and thus accepted the corresponding production conditions, on the other hand they wanted to take advantage of the domestic market.

"We shake hands", said a spokesman for the Federal Association of the German Grocery Trade (BVLH) about Rukwied's proposal - and at the same time made it clear that there are currently "no negotiations or discussions" on the subject between the major grocery retailers and the BVLH.

However, there is a model.

The Tierwohl Initiative could serve as a blueprint for the construction of a possible Germany bonus.

In order to improve the conditions for keeping animals for slaughter, the associations of farmers, processors and traders have joined forces in a private initiative.

The trade adds a fee to the purchase price, currently 6.25 cents per kilo of meat sold.

This brings together over 130 million euros annually, which are distributed to the participating breeders and fatteners.

In return, these guarantee keeping conditions that go beyond the legal requirements - in different stages.

Consumers recognize goods from the participating businesses by a label.

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Analogous to this example, a Germany bonus could guarantee proof of origin and sustainability and finance the plus desired by many consumers without having to use state money.

In terms of competition law, however, the solution would be tricky.

The Bundeskartellamt has been keeping an eye on the animal welfare initiative for years.

Although the competition watchdogs have approved the construction in essence, they have repeatedly requested improvements, including more transparency for consumers.

250 tractors blocked Aldi for days

For the German Farmers' Association, traditionally the strongest lobby for farmers, the move is also about defending grassroots acceptance.

It is fermenting among the country folk.

Again and again, their displeasure takes air, in tractor demos in the big cities and blockades of distribution centers of the trade.

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It was not until the end of December that agrarians blocked an Aldi distribution warehouse in Hesel, Lower Saxony, with heavy equipment.

250 tractors did not let delivery trucks through for days.

Later some of the protesters drove on to Edeka.

Such spontaneous demos are usually organized by grassroots organizations apart from the farmers' association, such as “Land Creates Connection”.

They want to force the retail chains to end price wars and pay higher prices to the producers.

For milk, for example, the farmers are asking 15 cents more per liter - which would correspond to a whopping 45 percent surcharge based on current producer prices.

To make matters worse, only 30 percent of the sale of milk and dairy products such as yoghurt or cheese goes through the German food trade.

Around half of the goods produced are exported, another fifth to the processing industry, such as manufacturers of baby food or baked goods.

Should the required increase be financed solely through retail prices in Germany, retail prices would have to climb significantly.

Nevertheless, discussions are currently taking place between the large grocery chains and the federal board of "Land Creates Connection".

The pressure from the trekkers is obviously working.

Processors such as dairies and slaughterhouses, but also other organizations related to agriculture such as the Raiffeisenverband or Rukwieds Deutscher Bauernverband (DBV) should be brought to the table.

According to the dealers, "neutral moderation with a technical background" is necessary.

Rukwied waves it away: “We don't need a moderator to talk to the grocery trade,” he said at Green Week.

Instead, he emphasized conflicting interests with trade.

The four large retail companies - meaning Lidl, Aldi, Edeka and Rewe - are faced with a large number of small providers.

In order to improve their bargaining power, “provider alliances” would have to be made possible.

For this, "the support of politics and the Federal Cartel Office" is required, he demanded.

The Corona crisis underlined the importance of efficient domestic agriculture.

“Security of supply is a great, irreplaceable good.

It is the guarantor of social and political stability ”, said the farmer president.

He will repeatedly appeal to consumers to buy local goods in a targeted manner.

The demand for regional and local products is increasing.

It is important that "our high-quality products are not undermined by imports that do not meet our standards."

Pig jam due to Corona

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Conversely, German agriculture is very much export-oriented, and not just for milk.

Exports also play an important role in other foods.

According to figures from the International Trade Center (ITC), for example, Germany is the world's third largest exporter of pork, only a short distance behind the front-runners USA and Spain.

The German world market share is 15.3 percent (2019) and will only be slowed down somewhat by export bans from China, for example, after the occurrence of the African swine flu.

The result: producer prices are falling.

The situation for the producers is exacerbated by the "pig jam" as a result of the capacity bottlenecks at the slaughterhouses, said Rukwied.

After the corona outbreak in spring 2020, a number of companies were temporarily closed and the regulations for the working and living conditions of the staff were tightened.

A million animals that are actually ready for slaughter are still in the stables.

Only 1.19 euros for a kilo of pork is simply “far too little”.

Piglet breeders currently only receive 23 euros per animal, at a cost of 60 euros for rearing.

The Green Week, which has been taking place since 1926, is usually a lively marketplace and the showcase for agriculture and food processors.

Last year a total of 400,000 visitors came over the nine days of the fair.

This year there will be no scramble and snacks.

Because of Corona, the Green Week takes place exclusively digitally in the form of forums and lecture events, shortened to two days.

The farmer's president sincerely hopes for the return to the traditional format next year: "You have to be able to touch, smell and taste food."

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Source: WELT / Erdmann Hummel