Automatically translated from Basque, translation may contain errors. More information here. Elhuyarren itzultzaile automatikoaren logoa

"In the global market the price of food is very fragile, more stable by buying it directly"

  • Why have food prices risen so much? How are the prices set? Juanma Intxaurrandieta is currently retired professor of economics at the University of Navarra and former INTIA manager. In his interview with Egonarria, Eli Pagola explains in ordinary language and with examples how demand and offers act, how speculation intervenes and warns of the existence of different leagues at global and local level. This globalised system or world league is very fragile, even in prices, and that is why it ensures that the strengthening of local food and its cultivators is a guarantee: for direct sale and in short circuits, prices are stable based on loyalty and worthy for both parties. This has been demonstrated by the experience of Laboren, the organic food consumption group of the Region of Pamplona to which it belongs.

03 April 2024 - 13:10
Last updated: 14:19
Zarata mediatikoz beteriko garai nahasiotan, merkatu logiketatik urrun eta irakurleengandik gertu dagoen kazetaritza beharrezkoa dela uste baduzu, ARGIA bultzatzera animatu nahi zaitugu. Geroz eta gehiago gara, jarrai dezagun txikitik eragiten.

Here you can see the complete interview of the food prices:

Here are some of the interview passages:

Eli Pagola asks about the foods that are listed on the world's stock exchanges. How does this market work? Juanma Intxaurrandieta has explained that "there is what is known worldwide as the market of the future". Harvests of the future are sold and bought, not yet manufactured. These commodities are very standardized products like wheat, soy, frozen orange juice -- other foods don't quote, fresh vegetables or fresh milk don't come into this world. If you're in the world of Merchtie, everyone who's cheaper produces that competition globally." Border taxes and those of Intxaurrandieta condition this competition a little worldwide, as explained by Sor are a way to transfer that competition to the framework territory: "We have creative brands of wine or cheese from Idiazabal... What do we do with it? Reducing our field of competence a great deal, why? Because only Idiazabal cheese can be produced here. An American can't compete if you make Idiazabal cheese. Worldwide competition to Euskal Herria. The same with the asparagus of Navarra: will the asparagus come out? Yes, it will come. And are you going to compete? No doubt. But it's another league: one has the seal that it's Navarra's asparagus and the other doesn't. In a way, you differentiate the product and differences in which league you play or in which competition you enter."

Another option within the Basque league is direct selling: "If you get a loyalty with those who buy you, then competition is communication between you and the buyer. Certainly, the producer must choose the competition to which he wants to compete. If you're small and you work with your consumers, you'll never make a lot of money. If you play the world league and you're very good, you might get rich."

What happened to the price of oil? Depending on where you buy...

Eli Pagola asks for oil: "In Spain for two years production has been very low, prices have risen greatly and have indicated that the Basque producers themselves have not had such a bad harvest or that they have not been so bad compared to Spain. However, their increase has also influenced their prices." Response from Intxaurrandieta: "That's surfing. No? When there's a big wave, we're all going to surf." In the oil of Navarra it has differentiated its production size: "In Navarra there is a great producer, one of the largest in the Spanish state. Do you make this oil with Navarra olives? A small part does, but most of it works with olives coming from other places. So, without a doubt, if there is little olives, there may be an increase because the raw material is also more expensive for them."

He explains that in 2022 there was also a huge drought in Navarre, but that 59% of the hectares of indigenous olive trees are irrigated and in principle production does not decrease. "Have these oil companies surfaced the wave of high prices? I've noticed, I'm also a member of Landa. Plant is the organic consumer association of the County of Pamplona". And what conclusions has Intxaurrandieta drawn from oil price observation? "Three or four brands of organic olive oil from Navarra del Campo are sold, more expensive than conventional oil. If the conventional oil was 5 euros, the vegetable oil was 9-10 euros, because it is organic, etc. Now is this time of increase and conventional olive oil has risen to 11-12 euros per litre... vegetable oil is at roughly equal prices, between 11 and 12 euros. So if you're playing in very global markets, you're playing that fragility of prices, problems and markets nearby. If harvests at some point decrease, prices will be higher, and if harvests are very large, prices will probably be lower. If you play in that trafficking world that you have in very direct contact with, I think there's a loyalty, and what do we get in these kinds of partnerships? Much greater price stability for both farmers and consumers. In oil, where you buy, prices don't change that much."

How do you set prices in the Association of Plant Consumers?

Intxaurraga explained that "While Landa struggles with middlemen prices, with farmers we accept the price they put. And then Landa gives her a margin to cover the expenses. You know that in agricultural products 75-80% of the price is directly for farmers. This is very difficult in hypermarkets, where the maximum percentage of farmers is 25-30%. Normally, in a conventional market and with many intermediaries prices are multiplied by 2.5 by 3 or by 5, in some cases by 9! ".

It reports on the recent research comparing the prices of organic foods we have in Landa with the prices of conventional foods that can be purchased in hypermarkets. "And there we've seen, on the one hand, that our farmers charge more, they make ecological and they charge more. But on the other hand, we have seen that we buy some cheaper products. That is, fresh produce, tomato, lettuce, zucchini, bell pepper -- our prices are for the buyer cheaper than conventional foods in hypermarkets. Others are not: livestock products are no cheaper, as the use of organic feed and cereals greatly increases the production process compared to intensive farmers. But vegetables, for example, can be bought cheaper. What is often heard, organic products are only for rich! It doesn't have to be why. In fact, if you take out intermediaries and make a relationship between producers and consumers, then you can get very interesting things for both sides."

Why have food been increased in recent years?

Intxaurrandieta explains that over the past two years food prices have risen more than the CPI, due to the dramatic increase in food production costs. "Among Ukrainian, wars and other stories, the price of nitrogen skyrocketed. In some way this makes the fertilization process more expensive, followed by an increase in all prices. Milk and meat did not grow at the same time, but they have also increased since then. In the prices we have now, speculation can certainly be, but the costs have also risen greatly."

Will future food prices be more expensive? Pagola asks. Intxaurrandieta's answer: "If we take them globally, in the situation we are in, I would say yes. I don't want to be pessimistic, but climate change will cause droughts, floods… that doesn't help farmers' production to be stable." He also raised the issue of shipping: "The magic that has existed so far in this global system has been that logistics and shipping were very cheap. With the containers, very cheap logistics were achieved for the shipment of food from one end to the next. If this is no longer so simple (think of the Red Sea upheavals), so cheap, surely the food coming from outside will become more expensive."

Food dependence stops us

Intxaurraga referred to the famous activist José Bové: “If we ever get angry with the Americans, European livestock farming has a survival of three months because of our dependence on soy”. In fact, the protein used in Europe comes from America; in the Spanish case, 65% comes from Brazil, where 3,000 million kilos of soy are brought each year, especially for cattle. Intxaurrandieta concludes, "What causes this? Very fragile system. In the past, they weren't wonderful things, but well, somehow cattle grazed with the resources that were there. Now we depend. And certainly, in the face of any incident, costs will rise and prices will rise. That is clear. We are in a very fragile system, we are very dependent on some raw materials, and that is why I believe we must insist that we value our resources, our farmers, our food and our short chains, to guarantee everything."


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