Germany: Penny pays farmers higher prices for ‘conversion’ product

Sales of organic food exceeded the ten billion euro mark in Germany last year. For farmers, it pays to switch to organic farming, but not in the first few years: Because during the so-called conversion phase, they must produce according to strict organic criteria, but may not sell the products as "organic". At this point PENNY starts with the Naturgut Junior-Helden and pays producers a reasonable extra charge for the conversion products. This increases the financial scope and the incentive to produce organic produce. The higher purchase prices paid by PENNY is only partly reflected in their selling prices. With this step, PENNY would also like to underpin the attractiveness of the Junior-Helden. To start things off, PENNY markets apples from the Elbe fruit grower community and, for seasonal reasons, lemons from Spain.

The Naturgut Junior-Helden Apples are available from Monday (09-04) for the price of 2.99 euros (1kg) in the PENNY stores in all states (except Thuringia, Saxony and Saxony-Anhalt).

"To put it simply, in organic agriculture the efforts are greater and the yields are smaller. We always hear how farmers want to switch from conventional to organic farming, but are afraid of the financial risks. With the Naturgut Junior-Helden we now create a concrete, additional incentive. Because we pay the farmers a higher price for the conversion products. A price that is higher than that of the comparable conventional product, but lower than the organic commodity. For apples, it is 26 percent more than for the conventional alternative.

However, we only pass on a small part of this premium to our customers, to further increase the attractiveness of Naturgut Junior-Helden. The product has organic quality, but is priced in the range of conventional goods. We hope to expand organic farming in the long term, especially in Germany," says Patricia Brunn, PENNY’s Head of Ultra-fresh Fruit, Vegetables, Flowers, Plants. With the international orientation of the concept of Naturgut Junior-Helden, PENNY also wants to give an impulse to sustainable organic farming abroad.

"Organic farming in part means manual labor. We also have far fewer options with regard to pests. Some people shy away from their personal agricultural turnaround. Especially if, during the changeover phase, someone produces 100 percent organic produce for several years, but is not allowed to market his product as organic. That's where the Junior-Helden come in. A higher purchase price helps financially, but also shows the appreciation for the products," says Ulrich Beckmann from Altländer Obsthof. That's why he decided to join the Naturgut Junior-Helden programme.

Source: Rewe / Penny