Over the past few weeks I have written a number of posts sharing my concerns about the future of the farming sector in Australia. I am concerned because I am finding our best farmers are feeling demoralised and physically pushed to the limit by the supermarket prices wars which show no sign of ending and our farmers are questioning why they bother to farm in this hostile environment
Most people have no idea that food has never been cheaper. The graph below puts this into perspective by showing the cost of food as a percentage of income over the last 100 years. That’s a whopping 80% drop and who has funded that drop – farmers that’s who
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This extract from an essay by Julian Cribb explores the issues further. What it also does is provide 8 big ideas solution options that will ensure Australian families can continue to enjoy affordable, nutritious, ethically produced food from Australian family farms. What I would love to know is what you the reader thinks is the appropriate option/s? I look forward to your feed back
Why Farmers Need a Pay Rise…( Extract)
by JULIAN CRIBB on 22 SEPTEMBER 2010
A Culture of Waste
Food is now so cheap that developed societies such as the US, Britain and Australia throw away nearly half, while developing countries lose nearly half post-harvest. (source: vii)
Societies that pay their farmers such low returns, have found they can afford to send nearly half of the farmers’ efforts to landfill. Or burn in an recreational vehicle enough grain as biofuel in one week to feed a poor person for a year.
In short, the modern food system has established a culture of absolute and utter waste, sustained only by the mining of energy and nutrients (from rock or soil), which will eventually run out or become unaffordable to most farmers.
This situation cannot persist more than a few decades. We will need to recycle and invest in new systems – but for that to occur, farm incomes and the incentive to invest in food production must rise and the economic signal to invest in agriculture must change.
An Unhealthy Situation
Cheap food is at the root of a pandemic of disease and death larger in the developed world than any other single cause of human mortality, and spreading like wildfire in the newly-industrialised world. Cheap, abundant processed food is a driver for obesity, which now affects two in five humans, and plays a significant role in the society-wide increase in cancers, heart disease, diabetes, stroke and bowel disorders.
Cheap food, in other words, is an economic invitation to consumers – including millions of children – to kill themselves prematurely through overindulgence.
Cheap food is the chief economic driver of the greatest budget blow-out in all western democracies: healthcare.
Solving the Food Challenge
The purpose of this essay is to call attention to the effect a never-ending reduction in farmers’ incomes will have on world food security at a time of rising physical constraints to production, including scarcities of land, water, energy, nutrients, technology, fish and stable climates.
At the very time when most experts agree we should be seeking ways to double food output sustainably over the coming half-century, the ruling economic signal to farmers is: “don’t do it”.
Of course, we can simply obey the economic signal and allow agricultural shortfalls to occur – but that will expose 8 or 10 billion consumers to massive unheralded price spikes, of the sort experienced in 2008, which have a dire impact on the poor, start wars and topple governments – and will not benefit farmers as much as a stable, steady increase in their incomes.
Most of the world’s poorest people are farmers, and it follows that one of the most effective remedies for world poverty is to increase the returns to agriculture. True, this will involve raising food prices for the urban poor but they are less numerous and can more easily be assisted by other government measures. At present rural poverty is maintained throughout the world largely by the economic policy of providing affluent city consumers with cheap food.
It is necessary to state this essay does not advocate a return to agrarian socialism, protectionism, commodity cartels or an end to free markets. In fact, we probably need to move much faster and further towards totally free trade in agricultural products in order to encourage efficient producers – large and small – around the world.
But it does hold up a warning flag about the universal dangers of underinvestment, negative signals and sentiment, resource destruction and rural dislocation caused by the undervaluing of the one commodity humanity absolutely cannot do without, as we approach the greatest demand for food in all of history.
There are numerous ways this issue might be addressed. Here are a few:
1. Price: through an educated “community consensus” that results in willingness on the part of consumers, supermarkets and food processors to pay more for food so as to protect the resource base and enable farmers to invest in new technologies (source: viii)
2. Subsidy: by the payment of a social wage to farmers by governments for their stewardship on behalf of society of soil, water, atmosphere and biodiversity, separate from their commercial food production
3. Regulation: by limiting by law those practices or technologies which degrade the food resource base and rewarding by grant those which improve it
4. Taxation: by levying a resource tax on all food which reflects its true cost to the environment to produce, and by reinvesting the proceeds in more sustainable farming systems, R&D, rural adjustment and enhanced resource management.
5. Market solutions: by establishing markets for key farm resources (eg carbon or water) that result in higher returns for farmers from wise and sustainable use.
6. Public education about how to eat more sustainably;
7. Industry education about sustainability standards and techniques.
8. A combination of several of the above measures.
The technical solutions to most of the world’s food problems are well-known and well understood – but they are not being implemented as widely as they should because of a market failure which prevents their adoption. To avoid grave consequences, affecting billions of people, this failure needs correction.
It also needs correcting because, as long as world food production remains an undervalued activity, then so too will investing in the research essential to overcome future shortages –crop yields, water use, landscape sustainability, alternative energy, the recycling of nutrients and the reduction of post-harvest losses. To satisfy a doubling in demand for food over the coming half century calls for at least $160 billion in worldwide agricultural R&D activity a year – equal to a tenth of the global weapons budget. However this would leave the world both more peaceful – and better fed.
It is not the purpose of this essay to solve the issue of how to deliver fairer incomes to farmers worldwide, but rather to foster debate among thoughtful farmers, policymakers and researchers and consumers about how we should go about it.
However it does question whether some of the ‘old truths’ of the 20th century still apply in the 21st, or whether the era of globalisation and resource scarcity has changed the ground rules.
It also asks whether the unstinted application of overwhelming market force against farmers is the act of a sapient species – or a mob of lemmings?
Over to the sapient ones among you.
–– Julian Cribb FTSE
Julian Cribb is Founding Editor of Science Alert, and is the principal of Julian Cribb & Associates, specialists in science communication. He is a fellow of the Australian Academy of Technological Sciences and Engineering.