"Pressure in the value chain is passed downwards"
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by Raphael Pierro
What about justice in organic farming? Raphael Pierro, trainee in the Organic Food and Farming programme talked about this with Jan Plagge. In the interview, the president of Bioland and IFOAM Organics Europe explains why value chains are only fair if there is a balance between all partners.
Raphael Pierro: What do you understand by justice in organic farming?
Jan Plagge: I associate justice in organic agriculture with the claim that economic activity should be subordinated to the overall good and that the well-being of the individual should be taken into account without discrimination. This is particularly important in the organic sector because our practices are oriented towards protecting and rebuilding our livelihoods. Equity also includes providing access to organic food for all and not developing organic products as an exclusive market.
Where do you see areas of conflict within the entire value chain?
Grievances arise in all parts of the value chain when there is an imbalance of power between the partners. Without a corrective, a permanent imbalance that is incompatible with our principles in the organic sector can be established. A fictitious but realistic example: As a large dairy, I have a great deal of purchasing power in a market with many small dairy farms.
As an individual dairy farm, you are almost powerless to influence your own situation in this constellation - especially if you are not organised through producer groups or associations. On the other hand, dairies with large traders may themselves be in a power imbalance.
If these imbalances are ignored, what we are currently seeing frequently will happen: Small partners in the chain can no longer cover their costs - farms are dying. This automatically leads to a downward spiral in terms of quality, ecology and social responsibility. The pressure in the value chain is passed downwards and individual farmers find themselves in the weakest position at the bottom.
What are the biggest challenges for associations?
At Bioland, we have recognised as the biggest challenge that we have to hold everyone accountable. Mere accusations and blame do not change anything in the system, and neither do we. In order to be able to describe areas of conflict at all, we have to accomplish a more transparent situation between partners along the entire value chain and look behind the mechanisms. This leads to the attempt to introduce jointly defined rules across the chain, which everyone has to sign and adhere to, as well as the creation of a corrective in the form of a control and complaints authority.
A current challenge is also the question of how to bring fair producer and manufacturer prices to the trader without creating unfair consumer prices. We have had and continue to have this debate in the context of our cooperation with Lidl and other market partners: We want to promote long-term contracts, alternative pricing systems and cost transparency by advising, supporting and monitoring fair-play rules, and we have developed action mechanisms for this.
What would be concrete approaches or proposals for solutions?
As an association, we always represent our values and principles to our partners and enter into dialogue if these are not adhered to. The biggest challenge is to build long-term contractual relationships that can at the same time react flexibly to fluctuations. This can only work through collectives. As a collective, we can then also decide on the consequences. The strength of such collective brands, such as Demeter, Naturland or Bioland, is very pronounced in Germany compared to other countries in Europe.
At IFOAM, we have mainly focused on legislative lobbying on regulations or laws, such as the recent Unfair Trading Practices Directive. We also promote the exchange of experiences to encourage regions and actors to improve their organisation and cooperation. In Eastern Europe, we still have a long way to go, as the structures are not yet as developed as here. In Southern Europe, on the other hand, there are large collectives, but they are not market-oriented.
Through cross-border exchange, we can create transparency and dynamics and thus counteract an imbalance of power. In Germany, we are already very far along in comparison, as the farmers in our country are well organised and implement a market policy in the value chains through associations, which ensures more fairness and equality. This is also reflected in significantly higher producer prices.
So, does the diversity of associations in Germany contribute to fairness?
Certainly. The competition between the associations is also a competition on the merits. Farmers choose the association where they see the highest added value for themselves. As an individual, justice cannot work because it is always very much dependent on my own arbitrariness and situation. Therefore, the issue must be transferred to a collective.
How can the organic sector lead the way for other forms of economy?
The principle of ecology has been translated into rules, especially in cultivation guidelines – less so in guidelines for production and trade. In the area of animal health, we have already come quite far. In the area of justice, there are approaches, for example the establishment of various "fair labels". However, a pioneering role can only be taken if these approaches are developed further and, for example, fair price mechanisms are organised along the entire value chain.
What is the most important lever to change something? Does everything have to be regulated by law or what other ways can be used?
Only a minimum standard can be regulated by law, which is based on actual practice. One cannot leave the entire responsibility to the state. The organic pioneers, also in the Bioland association, have shown the way and have gone beyond the standards by developing their own collective rules. Not always waiting for the legislator, but creating one's own regulation gives the possibility to shape the further process oneself.
The interview was conducted as part of the joint project of the 17th Organic Agriculture and Food Management Trainee Programme. In the project, a team of five trainees (Raphael Pierro, Carla Proetzel, Cathrin Bardenheuer, Laura Kehl and Katharina Tietz) is dealing with the issue of justice in the organic sector. The background is the strong and rapid growth of the organic sector in recent years - from a niche to a considerable economic sector. Is the original idea of justice, as anchored in the IFOAM principles, still found in the sector despite the changes? In order to show different perspectives and the necessary need for action as well as to develop constructive proposals for solutions, the trainee team interviewed some actors from the different stages of the value chain. As an excerpt from the series, the interview with Jan Plagge is running on organic-market.info. The other interviews can be read in German language on BioHandel.de.