Food Prices Continue to Rise - But Farmers Barely Profit

"The share of agricultural production in the final price is small – and continues to decrease," says Wifo agricultural expert Franz Sinabell. A key reason: The prices for agricultural raw materials are determined globally – and not on the domestic market.

How the Food Euro is Distributed

Out of 100 euros spent on food in Austria, about five euros go into processing. According to this, 14 euros flow into wholesale and retail, 13 into gastronomy, and 4 euros into the hotel industry. 9 out of 100 euros benefit the state as taxes. Less obviously, 5 euros go into real estate, financial, and insurance services, and the rest also includes brands or patents. Here, trade would often benefit a second time, for example through private labels or real estate transactions, write the "Salzburger Nachrichten".

A Third of Expenditure Goes Abroad

More than a third, 34 percent, of food expenditure ends up directly or indirectly abroad. However, this item includes not only food but also machinery for food production and energy imports. Part of the imports is accounted for by agricultural raw materials such as fruits and vegetables, so the total, even indirect, share of agricultural raw materials is slightly higher than 4 percent - but remains small, as Sinabell said in response to an APA inquiry.

Of the expenditure on food, 60 percent goes into the food trade, and 40 percent into gastronomy and hotels, according to calculations by the Austrian Institute of Economic Research in a self-initiated study presented for the first time at the annual meeting for agricultural economics. "Out-of-home consumption is often overlooked, and this distorts the picture of the actual price development in the food retail sector," explained Sinabell.

More Transparency in the Chain as a Solution

"In agriculture, you can earn just enough to get by, and you can earn well from agriculture," says Wifo expert Sinabell in the "Salzburger Nachrichten". As a solution, he primarily recommends more transparency along the entire value chain - from production to the shelf. "Only in this way can consumers make more informed decisions, politics act based on evidence, and farmers be adequately compensated."

(APA/Red)

This article has been automatically translated, read the original article here.