The true price of food: ILVO policy advice 2024.04

The concept of ‘true pricing’ involves reassessing the costs and benefits associated with environmental, social, health, and economic externalities, incorporating these true costs into the price of commodities or services within the food system. The primary goal is to enable governments, businesses, investors, consumers, and other stakeholders to make
more informed economic decisions, promoting the transition to a more sustainable and inclusive food system.

However, challenges remain in implementing true pricing, from developing the right methodology to determining accurate pricing. This policy brief outlines key considerations for a true pricing strategy, emphasizing the need for engagement with citizens and policymakers, fair distribution of risks, investments, and costs, and a rebalancing of
power along the agri-food chain. Additionally, a comprehensive European policy framework is essential to ensure consistency.

In cases where price increases occur, solidarity mechanisms should be considered to address accessibility issues for vulnerable groups. Interdisciplinary research is critical to refining methodologies and managing the complexities involved. The success of a true pricing initiative in the Flemish agri-food system will depend on integrating it with
complementary instruments to ensure fair burden-sharing, prevent competitive disadvantages, and facilitate the internalization of externalities across the entire value chain.