Low food prices on the menu at Berlin′s Green Week | Business| Economy and finance news from a German perspective | DW | 16.01.2015
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Low food prices on the menu at Berlin's Green Week

Berlin International Green Week, the world's biggest food and agriculture industry trade fair, is taking place for the 80th time this year. Low food prices caused by abundant supplies are putting pressure on producers.

The Green Week is still going strong. This year marks the 80th time the event has taken place since its 1926 launch. This year, 1,658 exhibitors from 68 countries are taking part in the giant trade fair, held annually in the German capital. From January 16 to 25, the public can mingle with the pros in 26 huge exhibition halls - all of them fully booked by food producers eager to showcase their wares.

Show kitchens sizzle and smoke with baked and roasted goods, tasty foods are piled high, and there's even a temporary farm to give folks a look-in to the business. Perhaps for authenticity's sake, two of the 26 halls are filled with bleating, grunting, cackling farm animals.

For all the prosperous bustle, many producers are weighed down by worries this year. The big problem is straightforward: Oversupply. Too much food, plenty of competition and consequent low prices are putting pressure on profitability.

German farmers have had a run of three good years, but now things are trending down - for producers, at least, not for consumers, who stand to benefit from low prices.

German Farmers' Association Joachim Rukwied says that meat products, especially pork, have been under sustained downward pressure for quite a while. Milk and grains have also seen price drops in the past half-year, as have sugar, fruit and vegetables, he said.

Joachim Rukwied (Photo: Rainer Jensen/dpa)

German Farmers' Association president Joachim Rukwied doesn't want US hormone-treated meat coming to Germany

Europe is drowning in apples

Good harvests are usually thought of as happy events for farmers. And this year has been a good year for apples. Unfortunately, a massive European apple harvest coincided with Russia's decision to ban agricultural imports from the EU as a riposte to economic sanctions the EU imposed on Russia for its role in the war in eastern Ukraine. That left a very large number of EU apples looking fruitlessly for a market.

Germany only sends around 25,000 tons of apples to Russia each year, but Poland exports about 600,000 tons. All those apples aren't headed east this year, and their desperate search for gainful employment has caused the price of standard grade apples to drop from 60 to 20 cents a kilogram.

"For juicing apples, we can't even really speak of a price any more at all at this point. The farmers get about two cents a kilogram for them," Rukwied said.

Russia is attending anyway

Despite geopolitical tensions, Russian firms occupy a big display area in Hall 2. Many EU fruit and vegetable producers are concerned the business relationships they've built up with Russia could wither away.

Christian Göke, CEO of Messe Berlin, the trade fair management company, says the Russians' presence is a token of the importance of Berlin's Green Week fair.

"It speaks of the high business and economic status this trade fair has, and what a strong significance in terms of agripolitics. And it's testimony to a key function the Green Week fair has had for decades - it's a focal point, a point of meeting and exchange between East and West. It has always been the most important platform for dialogue for the entire industry."

Berlin International Green Week is indeed the industry's big annual pow-wow. In addition to 100,000 professional visitors, about 150 politicians from around the world are expected at the fair this year. Three hundred conferences, workshops and seminars round out the program during the fair's ten days - along with the world's biggest meeting of ministers of agriculture.

European worries about hormones

A hot topic this year will be TTIP, the Transatlantic Trade and Investment Partnership, which is in preparation between the EU and US. European agricultural and food industries favor free trade. The industry relies on export markets. But Europeans want European quality and production standards to be upheld, Rukwied said.

"We don't want hormone-treated meats on European or German plates. We don't use hormones in our animal husbandry and we won't use them in future either."

In the US, hormone use is standard practice, and that brings cost advantages for American meat producers. Their animals grow faster. European farmers and environmentalists warn that cheaper meat imports from the US could displace European meats.

Small improvements in Germany's livestock industry

Processed foods

Early in every new year since 1926, the Green Week has showcased a vast array of food and agricultural products

German organic farmers are hoping for a boost following new subsidies in several German states. Organic farming constitutes only a small fraction of the total in Germany - covering a little over 6 percent of farmland.

A new voluntary industry initiative, "Aktion Tierwohl," or the Animal Welfare Initiative, is intended to help. Most of Germany's biggest food retailers came together with the farmers' and food producers' associations, and agreed to apply a small levy of four euro cents per kilogram of meat sold at retail. The proceeds will be collected in a fund to which farmers can apply for special subsidies, in exchange for making voluntary improvements in their treatment of farm animals, above the standards required by law. Eighty-five million euros will be made available in the first year of the initiative.

However, the animal welfare activist group "Grüne Woche demaskieren!" (Unmask Green Week!) describes Aktion Tierwohl as a "mere public relations campaign and advertising gimmick." The actual improvements in the life quality of livestock under the program will be "minimal," the activists say.

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