True cost accounting in agri-food networks: a German case study on informational campaigning and responsible implementation

Abstract

AbstractThere is broad scientific consensus that current food systems are neither sustainable nor resilient: many agricultural practices are very resource-intensive and responsible for a large share of global emissions and loss of biodiversity. Consequently, current systems put large pressure on planetary boundaries. According to economic theory, food prices form when there is a balance between supply and demand. Yet, due to the neglect of negative external effects, effective prices are often far from representing the ‘true costs’. Current studies show that especially animal-based foodstuff entails vast external costs that currently stay unaccounted for in market prices. Against this background, we explore how informational campaigning on agricultural externalities can contribute to consumer awareness and tolerance of this matter. Further, we investigate the socially just design of monetary incentives and their implementation potentials and challenges. This study builds on the informational campaign of a German supermarket displaying products with two price tags: one of the current market price and the other displaying the ‘true’ price, which includes several environmental externalities calculated with True Cost Accounting (TCA). Based on interpretations of a consumer survey and a number of expert interviews, in this article we approach the potentials and obstacles of TCA as a communication tool and the challenges of its factual implementation in agri-food networks. Our results show that consumers are generally interested in the topic of true food pricing and would to a certain extent be willing to pay ‘true prices’ of the inquired foods. However, insufficient transparency and unjust distribution of wealth are feared to bring about communication and social justice concerns in the implementation of TCA. When introducing TCA into current discourse, it is therefore important to develop measures that are socially cautious and backed by relevant legal framework conditions. This poses the chance to create a fair playing (‘polluter pays’) with a clear assignment of responsibilities to policy makers, and practitioners in addition to customers.