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Why the price of healthy food rises faster than the price of unhealthy food

According to the Dutch Central Bureau of Statistics, prices rose by average with 2.7 per cent in 2017, this is the second highest increase in prices of food over the last decennium. More strikingly is the increase in prices of healthy foods over the last decade, fresh fruit increased with 28 per cent, eggs with 37 per cent and semi-skimmed milk with 60 per cent. These are products that are considered healthy  by the Dutch Nutrition Centre, the average increase of healthy food was 22 per cent. In comparison, unhealthy products like beer, wine, canned goods and junk food only increased with 13 per cent. Where does this increase come from and what to do about it?

A huge cause for the increase in prices of food is the climate change, due to the changing weather conditions many harvests fail. Think of the empty shelves of spinach last year, this will be something that will occur more often in the future. Furthermore, in long term different crops are probably grown on different locations due to the shift in temperatures. Another effect of the climate change is that governments and scientists are looking for other fuels than oil, namely bio fuel. One of the things they are trying out is the use of grains, corn and seeds. This increases the demand for this products even more and therefore heighten their price.

Another unexpected effect is the effect of speculators on the market. They are not the primarily cause of the increase in prices, but they can heighten the effect of price fluctuations. These speculators buy long term contracts on the food market, in these contracts a specific amount of food needs to be delivered on a specific date in the future. Which is odd, because most of these contracts are made up before the harvest is done. Here lies the value of these contracts, these speculators hope that these contracts increase  in value so they can sell them with a profit.

But these things mostly explain the overall increase in the prices of food, not specifically the major increase in unhealthy food. But we should look at it the other way, not as if healthy food increased more, but that unhealthy food increased less. The biggest cause for this is the decrease in price of sugar. In comparison with 2007, sugar became 10 per cent cheaper. Because sugar is the main ingredient of most unhealthy products, this partly explains why these products did not increase as much the healthy products. Another explanation is that unhealthy food is mostly produced in factories. Think of sauces, canned food, bags of crisps, an increase in production is not that costly. These reasons explain why prices of unhealthy food do not rise as fast as the prices of healthy food.

The effects of these price differences are not surprising. Because unhealthy food is cheaper than healthy food, families with low incomes buy more often unhealthy food instead of fresh fruit or vegetables. When more people buy unhealthy food due to the huge price difference evne more problems arise. Healthcare costs increase due to the many health problems caused by obesity, think of diabetes and vascular diseases. Other negative effects of obesity on society are the costs of employees being absent due to sickness and the costs of permanent incapacity to work. Because the difference in price increases between unhealthy food and healthy food causes so many problems something needs to change.

A possible solution is a tax on unhealthy and junk food. This increases the price of unhealthy food to the same level of healthy food. Therefore the price will not affect the decision about what to eat. For example, in Denmark there was a tax on food that contained more than 2.3 per cent fat. This tax on fat was only enforced between 2011 and 2013, but the effects were good. According to a research observing 2500 households, done by the University of Copenhagen and Oxford University, the consumption of foods containing this amount of fat decreased with 4 per cent. Whereas this does not seem much, their calculations show that due the reduction in fat intake the number of people dying from vascular diseases shrunk with 123 persons. Side notes of the researchers were that this tax was solely on fat, so people still ate too much salt and too less fresh fruit. Also people living near the German border would probably buy their groceries in Germany.

Personally, I think a tax on unhealthy food is a good idea. When prices of unhealthy food  and healthy food are the same, more people will decide to buy the healthy option. Which is not only good for their own health, but also for society in the long run. Furthermore, the money obtained by these taxes should be put in subsidies for healthy food. So healthy food becomes cheaper in comparison to unhealthy food. This is of course very difficult to achieve, many companies will fight this or stop producing because of too little profit. But I do hope that in the future an arrangement like this will happen. The health of people should not be caused by huge prices differences forcing them to make unhealthy choices, this has to change.


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