Which is cheaper: Spanish tomatoes imported to Belgium during the winter or those grown in Belgium, itself? Ellen Peeters (Applied Economic Sciences, Business Administration, 2019) researched this in her master's thesis.
In her study on the effects on tomato imports, Ellen considered both the economic as well as the corporate costs. Corporate costs are the costs carried by the company (congestion, air and noise pollution, and climate change). These costs are, therefore, for the consumer.
Spain was chosen as the reference country. That country exports 12 million tons of fresh fruit and vegetables annually. This makes Spain the highest producing and exporting country in the EU. In 2017, it exported 93% of its own production.
“When it comes to cultivating tomatoes in Belgium, these costs are made up mainly of CO2 emissions. However, this accounts for only two percent of the total cost," explains Ellen.
“The remainder is production costs. This consists of energy (31%) and labor (20%). This is because a lot of lighting and heat is needed to grow greenhouse tomatoes in the winter in Belgium. That quickly pushes up the price of this Belgian product."
When tomatoes are imported from Spain, their production costs are generally lower. The external cost, however, is much higher. This makes up about 15% of the total. "These costs are mostly incurred by transportation between Spain and Belgium. This costs EUR0.10 per kg for tomatoes transported by truck and EUR0.01 when transported by train," says Ellen.
Comparative advantage
“To compare the two countries, we look at the break-even price. This is the minimum price a grower needs to cover his costs," Ellen continues. "When you look at purely the economic aspect, Spain has an advantage over Belgium. This Southern European country can cultivate tomatoes more cheaply."
The external, corporate costs are, however, not included. The story changes once you take these extra costs into account. Moreover, Belgian farmers can work in a more sustainable, ecological way. This is thanks to the innovative techniques they use.
Using combined heat and power (CHP) ensures an energy saving of no less than 20%. CHF is used instead of standard warming. It uses a gas engine that produces not only heat but also electricity and CO2.
“This makes the total per kg cost price of Belgian tomatoes lower than when this product is imported from overseas. However, as soon as a more sustainable mode of transport is chosen, such as the train, the Spanish cost price drops again. With a difference of 16%, it is below the Belgian level," Ellen says.
Conclusion: Growing tomatoes locally is Belgian is more beneficial than importing them, bu truck, from Spain. This is, however, only if the latest cultivation methods are used. Good to know - currently, 89% of these Spanish products are transported by road.
Source: U Antwerpen
