May the best farmer win!

How does the true price of organic agriculture differ from conventional agriculture?

Adrian de Groot Ruiz gave an interview about organic versus conventional agriculture on Business News Radio (in Dutch). You can listen to the whole interview, in response to a statement of Louise Fresco, the President of Wageningen University and Research. (His part starts at 22 minutes) here.

Read a summary of the questions and answers below:

Interview on BNR Duurzaam

Adrian de Groot Ruiz as an expert on this statement:
“Organic agriculture is less productive than conventional agriculture”

Journalist Frederique Mol is the interviewer.

The real costs are not included in the price consumers pay. Who pays for these?
Society pays. For example, when CO2 emissions go up, there will be more floods. We will need to build more dams and the productivity of agriculture will go down. These are costs which are real, but the person enjoying the piece of chocolate does not pay for it.

Which information do you need to judge the statement?
Environment is the most interesting, because the advantage is that organic agriculture is better per hectare. There is less use of pesticides and herbicides, there is less loss of soil quality and less CO2 emissions per hectare. The disadvantage is there is less produce per hectare.

How do you calculate the real price?
Multiply the costs per hectare with efficiency. With the use of pesticides and herbicides, you determine the loss of species and value the different species. With CO2 you take the societal costs. We calculate 110 euros for a ton of CO2.

Does organic agriculture perform better than conventional agriculture?
The most leading studies show that the yield is about 20 percent lower.

That sounds like bad news for organic agriculture. Can we put a price on it?
No, and that is the interesting part. This is what we should measure, but it differs per continent and per product. To be fair, we don’t know. So it’s important that everyone measures and reports their true price. For example, an organic trader, Eosta, reports their costs per hectare, but we would like to see the costs per product and then: may the best farmer win!

“Alignment value creation shareholders and society”

“The value creation of shareholders and society are becoming more aligned.” This was the main message of Adrian de Groot Ruiz, Executive Director of True Price, in his key-note speech at the Global Compact Netherlands meeting in The Hague on June 2nd  (link in Dutch).

The meeting was set up to bring together key-stakeholders of Global Compact in the Netherlands. The theme of the meeting was “True Value, Dignitiy and Dignity and Clearity”.

The stressed that the collective interests of the many stakeholders facing relentless environmental and social challenges, make it inevitable that current externalities will ultimately be internalized by organizations and markets. Costs and benefits to society become costs and benefits of companies.

Combined with increasing demands for transparency, this poses both risks and opportunities. Companies face a tipping point; they must invest in business models that foster integrated long term value creation, but their actions are still not trusted by stakeholders. This is why measuring, monetizing and managing externalities is becoming increasingly important.

Against this backdrop, the True Value of business activities is becoming an increasingly important concept. True Value refers to the value that companies create considering not only the financial costs and benefits, but also costs and benefits for social, environmental and human capital.

Herman Mulder announces winner Inclusive Business Award

Herman Mulder, chairman of True Price, was honoured to announce the winner of the Inclusive Business Award in London. The award was part of the Tranformational Business Conference, held in London on June 11.

Mulder: “The Chinese company UnionPay won the award. The summit in London gathered policy-makers, business leaders and strategists from around the world. Like True Price, these actors are in the business of tackling key challenges facing economies and societies.”

This year’s programme marked a decade of collaboration between FT and IFC on global awards initiatives that have highlighted ground-breaking, commercially viable solutions to today’s development challenges. For 2015, special attention was given to initiatives that address pressing structural needs in rapidly growing urban areas. A total of 191 entries were received from 167 organisations involving projects in 140 countries.

More information about the event can be found here.

True pricing reaches 400k Dutch readers

In the ‘Consumentengids’ of July 2014 you can read the article ‘cheap food has a price’ (‘Goedkoop eten heeft een prijs’, in Dutch). Through this interesting article, True Price has reached 400.000 Dutch readers. Adrian de Groot Ruiz explains that True Price aims to make the hidden effects visible which are not incorporated in the price of a product. By making costs measurable (i.e. the costs of the environment or poor working conditions), True Price wants to stimulate companies to address the hidden effects by, for example, working in a more environmentally friendly way or paying a fair wage.