Friday, 7 April 2017

Ukraine looks to France to understand food markets and pricing

Ukraine’s Ministry of Agrarian Policy and Food met with French experts who shared their experiences in commodity market research, pricing and margins in the food sector.

"It is important to understand all the pricing link [between] fields to store shelves and margins for producers, processors and sellers. This understanding allows you to find a reasonable balance between all market participants and the need to provide affordable and quality food” said Ukraine’s Deputy Minister Elena Kovaleva demonstrating a clear lack of understanding how markets work in the real world.

If the retail price food was determined by the cost of production plus a “reasonable” margin then we wouldn’t have dirt poor farmers going out of business every day of the year or only functioning because of huge state handouts.

I’m not entirely sure the French or any EU country dependent on massive state handouts to subsidies farmers and food production are the best people to talk to when looking for examples of good agri-economic food pricing practice. 

My advice would be to talk to New Zealand, they have some experience of operating an agricultural policy without subsidies; tell them you're interested in buying beef livers and I reckon there'll be a delegation on the first available flight.

The long term solution to food pricing, in my opinion, is to increase the retail price of food and educate people to understand that soil has more value than gold and good food comes at a cost and takes precedent over cigarettes, magazines, booze and the latest ultimately disappointing must have piece of crap technology.

OK, maybe not booze, booze is still made out of food.