Valuation Framework for True Price Assessment of Agri-food Products
In the Dutch agri-food sector there is a need for a methodology to account for the external costs of societal impacts in the value chain of an agricultural product. Using quantitative sustainability indicators for food products can, amongst other things, help the management of such impacts and the improvement of their sustainability. The true price is one of these indicators that can contribute to more sustainable production and consumption.
This document provided definitions and a framework for developing monetisation factors for societal impacts of food- and agri-products in a structured and consistent way. It contains the core ideas of a true pricing valuation framework: principles and a justification for selecting social and environmental impacts to take into account in a true price assessment and the basis for the development of monetisation factors for these impacts.
True pricing starts with the acknowledgement of basic rights, Human Rights, labour rights and other generally accepted rights, for current and future generations, their link to sustainability, and the corresponding responsibility of economic actors (businesses, consumers, investors, government) to respect these rights. The true price is based on this right-based approach. The true price gap is the sum of social and environmental costs as the consequence of violations of basic rights. These are called unsustainable externalities. So the true price gap is zero if a product is sustainable from a rights perspective.
This true price assessment module was developed by True Price and Wageningen Economic Research within the PPS AF18051/ TU18104 ‘True and Fair Price for Sustainable Products’. This project received financial support from the Topsector Agri & Food and the Topsector Tuinbouw & Uitgangsmaterialen.
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