Food cheaper today than in the past

A more effective agriculture sector is one of the reasons why prices, taking inflation into account, are cheaper today than in 1980

Despite the fact that Danish food prices are 39 percent more expensive than the average prices of the other 28 EU member states, food products are actually cheaper today that they were in 1980, according to an analysis by the Danish agriculture and food council, Landbrug & Fødevarer. Taking inflation into account, prices on food staples are eight percent cheaper than three decades ago.

The development is down to a more effective agricultural sector and a re-organisation of national farm subsidies, according to Svend Friis Bach, the head of market analysis at Landbrug & Fødevarer.

“We have seen Danish agriculture become dramatically more effective since the 1980s, which means that farmers can produce more using equal or fewer resources,” Bach said in a press release. “Sales prices have not kept up with inflation because of international price competition which has resulted in cheaper food products for the consumers.”

European agriculture policies, including the elimination of minimum prices for certain agricultural products, have strongly influenced the price levels of food products. And with the change to farm subsidies, Danish farmers now receive agricultural support corresponding to the amount of land and animals they keep.

“The market forces are freer in this model, which again has contributed to food products becoming cheaper,” Bach said.

The analysis also revealed, however, that energy prices are 32 percent higher than they were back in 1980.