Morpeth Rotary Club
Chris Ritson, Emeritus Professor of Agricultural Marketing at Newcastle University, talked to Morpeth Rotary Club about food consumers and food prices.
He has been a member of food related advisory committees for many years, including for the Food Standards Agency. He is a member of the FSA Advisory Committee on Novel Foods and Processes, is involved in projects in Mediterranean countries, mainly in Cyprus and Greece, and has an interest in European agricultural policy, food marketing, eco and consumer behaviours, and more recently, food ethics.
He began by talking about EU food market interventions, for example the French apple mountain. In 1991, twice the number of apples were produced than the year before so they decided to take large numbers out of the market to keep the price steady. A man from Brussels had to certify that the apples were of a high enough quality to destroy.
Mr Ritson thought it always a great sin to destroy food. In fact, for basic food commodities, people are inflexible in the quantities they buy, in spite of a price change up or down.
There was a butter mountain, but butter can be frozen and kept at a reasonable quality for years. In 1987 there was free butter for pensioners, but it made virtually no difference to the amount of butter consumed.
From 1974 there has been a substantial fall in the real price of food. There was a second big fall in 2006. The temptation was to introduce food subsidies, but subsidies don’t work because of the inflexibility of the market. Apart from cheese, all of the main foods are bought more by the poor than the rich so a food subsidy is really a wage subsidy.
World food prices can be too high or too low. There has been a great increase in population and there has always been a battle between growth of population and the growth in food supply through the development of agriculture. Supply generally outpaces demand. As a consequence prices tend to shoot down and over the years there have mainly been very low prices.
They were low until 2006, then went very high. They went up in 2007 and have been bouncing along at a level twice as high as they were, although they are beginning to come down now.
It looks as though we may have entered a frightening new era where demand outpaces supply. There used to be a two to three per cent increase in crop production every year, which no longer applies. A completely new demand for crops started 12 years ago with the move to bio-fuels. Half of the US maize crop is used for bio-fuel now. Most important is the rise in incomes in China, with a greatly increased demand for pigs and poultry, which use three to four times the resources of growing grain.
The demand for dairy products was very high in 2008, with a 200 per cent increase. It has gone right down now, but if the Chinese economy goes up again it will rise.
Mr Ritson’s research on whether there is such a thing as a standard food consumer suggests they are all different. A project at Newcastle looked at the behaviour of people as consumers during the BSE, ‘mad cow disease’ scare. For a few years beef dropped from the menu.
One university professor of psychology soon called on the caterers to have beef back as it was so cheap. Research showed behaviour varied from those who wanted to avoid all beef, to those who wanted to reduce the quantity eaten, and those who wanted the usual amount, but to go for higher quality. Some did not change their eating habits at all, and some bought more because it was cheap.
There is a similar picture for genetically modified food. There are people who would not touch it, some who are very enthusiastic, and some who are undecided.
There is a variation of diets throughout Europe and a belief in national stereotypes. People eat things for cultural, traditional, and religion reasons, or because of ethnicity. Certain people are known for buying fresh fish at the market every day, Italians buy spaghetti, Germans have sausages, Greeks have octopus.
A European project covering France, Germany, Italy, Switzerland, Denmark and Greece saw 1,000 people surveyed in each country and asked how important the quality indicators for eggs, tomatoes, bread and yoghurt were. There were no differences between countries on the quality characteristics, which refutes the idea of stereotypes.
To finish on a lighter note, food labelling can be troublesome, especially if people always believe what they read on the packaging. Mr Ritson has seen a number of unlikely statements, including ‘rice with herpes’, ‘child shredded wheat’, and see-through bags labelled ‘maize’ that were full of onions. On a visit to a Cyprus winery, visitors drank wine labelled 1993. They were challenged by a wine-taster who said it was not 1993. Management said they knew that, but they had lots of labels left from the year before.
There were questions on the effectiveness of marketing boards. The Milk Marketing Board had been very skilful and successful. They had a pooled price for the farmer, which was a mixture of local prices with some sold on the world market. The egg marketing board was different as it only really did advertising.
Finally, Greece once buried lemons to keep the price high. A lot of cheap lemons suddenly appeared at local markets, but looked as though they had been covered in soil.