Friday, September 30, 2011

Organic farming as a strategy for a new economy

This paper explores the evolution of the modern agri-food system and in particular, how it has been shaped by the market economy, industrialisation and cheap fossil fuel. It concludes that some of the principles of organic farming are incompatible with the logic of the market economy and the industrial society. Therefore, the organic movement should look for strategies that challenge the prevailing paradigms, and build alternative economies.

Farming has been shaped by cheap fossil fuel and the market economy.
Farming systems are largely shaped by the ecological and social conditions under which they develop; they also influence these conditions. It was the shift from a hunter and gather society to an agrarian society that lead to the initial stratification of society in rulers and oppressed, to private property and to the city and the state. The simple agrarian equation was always that farmers must produce more energy as food than the energy they spent on it. They must produce energy for themselves, for young (reproducing the labour force), old and sick dependants, for some other tradesmen and for the rulers, who offered protection against taxes or forced work. For a long time this energy equation remained the same. Gradually, through technical innovations, productivity could increase and new lands could be tilled, thereby allowing a slow increase in population. All in all productivity per worker didn't increase so much; slash and burn farming, almost without tools, is mostly as productive as farming with oxen and a plough[1]. Three things, all linked to each other, changed this dramatically: the emergence of the (capitalist) market economy, industrialisation and fossil energy.

Industrialism caused a fundamental change in social relations where the family unit ceased to be a unit of organised production and becomes a unit of organised consumption. Industrialism was also a way to largely expand exploitation of labour and nature. Through the combination of the market economy and industrialism, externalisation of environmental and social costs in time and place was possible - and profitable. This lead to that producers which internalised costs, simply could not compete, be it peasant farmers, artisans or corner shops. This was further augmented by that industrialism also brought in fossil fuel and thereby, seemingly, broke the ecological limits of the economy. The power in society shifted from those that controlled solar collection on the ground (landlords) and human masses (the state and landlords together) to those that controlled the new energy sources (fossil fuel) and put them into work for trade or industrial production - the industrial capitalist. It lead to the emergence of the modern society where more and more aspects of life is regulated by markets; where "growth" is seen as something inherently good or essential; where world population has exploded, where nature is merely seen as a dumping ground and a store of raw materials; and where one's wealth is built on exploitation of fellow humans and nature.

Markets existed since a long time, but up to some hundred years ago, societies were not "market economies". Ancient elites didn't earn their money from markets but from conquest (robbery) rents and taxes. The role of markets for distribution of goods was not dominant, very little food was bought or sold, and there were no markets for land or labour. Farmers were largely shielded from competition in the modern sense. Grain didn’t become a fully tradable commodity until the end of the 19th century in Asia. The big shake up came with the introduction of fossil fuel and industrialisation. Improvements in transportation technology, in particular steamships and rail-roads were both a driver and prerequisite for increased trade. In 1870, a bushel of wheat cost 60 cents in Chicago and the double in London. By the end of the century transport costs, and thereby the price difference, had shrunk to 10 cents. Somewhat later, and in particular after WWII, fossil fuel was also applied in the farm sector itself by the introduction of threshers, pumps for irrigation, tractors and last but not least fertilizers, adapting to the ways of the factory.

The introduction of markets affected every aspect of the farm sector. Now, village life, culture and religion, which earlier both controlled and assisted in farming, became "obstacles to development", because they stood in the way of the market logic. Land, water and forests were gradually transformed from commons to tradable commodities. Farmers are no longer reproducing their production system. They buy seeds and breeds in the market; they don't have to take care of the reproduction of the soil, because they can compensate that with buying chemical fertilisers. They don't have to take care of the balance between nature and what humans take away. The total biological productivity per hectare remains much the same, but we take a higher and higher share of that production, e.g. by transforming grains to have less roots and straw and more kernel; by exterminating weeds and wildlife in the fields and by not allowing the soil to naturally regenerate.

The production per agriculture worker in the most advanced economies have reached 2,000 tons of grain per man year, while in historical times it was just a few tons; an increase in labour productivity by thousand times. But in many parts of the world, the labour productivity is largely the same as it was hundred years ago, while the price of food has decreased tremendously[2]. The average value produced by a farm worker is just above 100 dollars per year in the poorest countries and some 40,000 dollars per year in France. And the gap in productivity between the rich and the poor is widening
Table 1 Agricultural labour productivity, US dollar per man-year

Agriculture as share of GDP
Low income countries
Middle income countries
High income countries
Source: World Bank, World Development Report 2008

Labour productivity in modern farming can largely be explained with the command of energy resources. The modern farmer is de facto commanding a mass army of "energy slaves"; a barrel of oil represents the energy of 25,000 hours of human toil i.e. 14 persons working a year with normal Western labour standards. The energy efficiency in modern farming is considerably lower than in pre-industrial farming systems. Our ancestors would have starved to death if they had had as bad energy ratios as our food system; in industrial countries between 10 and 15 times more energy is used in the food system than what is contained in the food we end up eating.

With cheap global transports and a rather liberalised trade, farmers in developing countries, having access to almost no energy resources, are supposed to compete with colleagues in the developed countries that use energy resources corresponding to hundreds of labourers. Through perverse subsidies and various trade and food policies, economics and rules are bent in favour of the farmers in rich countries. Despite a few selected success stories with high value crops (horticulture) or other premium products, such as organic, most farmers in developing countries are losing out in the competition. Many of the least developed countries have gone from food exporters to food importers in a few decades as a result of these unfair relationships. The same development affects many small farms in developed countries, who can only survive by going into “niches” such as artisan food production or services such as educational farms. There are other troubling aspects of our food system after the farm gate, such as the dominance of a few supermarkets, enormous waste and the deterioration of food quality. These are also linked to the depicted development.

We are in the stage of peak-oil; our wasteful farming system and the use of fossil fuels cause climate change; water resources are depleted; global population has exploded and our ecological footprint is considerably bigger than the planet (and growing by the day). And still, farming is shaped as if labour was the main limiting factor and nature is for free. People in high income countries consume up to 10 times more natural resources than those in the poorest countries. 884 million people lack access to clean drinking water and 2.6 billion people do not have access to running water (UNEP 2010). The differences between rich and poor are increasing over the years;  the richest 2 percent of adult individuals own more than half of all global wealth, with the richest 1 percent alone accounting for 40 percent. Most of the poorest are involved in farming. 
How can anyone claim that our development model is successful, when it fails on so many accounts?

Discussion and Conclusions
There are several features of organic farming that is in contradiction to this development. Most importantly organic farming:
- is based on as closed cycles of nutrients as possible, something that is impossible to maintain with large scale international trade, and in general difficult in a commoditized food system
- builds on natural systems to regulate pests and weed and supply crops with nutrients and is therefore not in favour of system relying on the purchasing of inputs.
- is in principle against the use of finite resources, e.g. fossil fuel and mineral fertilizers
- is committed to fairness, while market imperatives such as competition, rent-seeking and economies of scale are everything but fair, instead they lead to ever increasing gaps between rich and poor.
Organic farming is essentially in opposition, not only to the use of agro-chemicals, but to the whole system that is based on exploitation of nature and of fellow humans. People like myself, have seen it as urgent to transform the farming system into a more benign system without necessarily challenging the prevailing paradigm. A vehicle for doing this has been the "mainstreaming" of organic into mainstream (global) markets and into government policies. That is still a praiseworthy effort, but it comes with a price. I have been a farmer myself and know how it works in the daily life. The power of the prevailing economic system and its ideology is overwhelming. Ultimately organic farmers have to survive, and to survive within the market economy requires submission to the logic of the market; it leads to increased use of inputs in production, externalisation of costs, corporate take-over and business-as-usual approaches. The farmers truest to organic principles are mainly small scale gardeners producing for themselves and lifestyle farmers. They can be true to the organic ideals not because of their moral superiority or higher skills, but because of their autonomy from the market forces.

In theory, full internalisation of costs (such as fees for nature resource use and waste) and compensation for ecosystem services (such as carbon credits or landscape payments) would allow organic farmers to compete "fairly" with non-organic. But the industrial model is based on externalisation of costs. This is also the reason for why there is such a resistance to internalisation of costs from those that profit from the system, be it internalisation of social costs or environmental costs. In a complex system such as farming, internalisation of all social and environmental costs and compensation for ecosystem services would only be possible with very extensive and detailed regulations. Just look at the EU agri-environmental programs which are just a very small step in that direction. Such a system would probably still be neither fair nor efficient, and would in many ways represent a control of farms more sever than under Soviet rule.

There are two strategies to follow: One is the strategy for individual autonomy in the same way as peasants have related to the market for centuries, by limiting their dependency of inputs for production and reproduction of the system, such as fertilizers, paid labour and credits. This "peasant strategy" is not only a feature in developing countries, but is also prominent in many farms in developed countries. It coincides with prominent aspects of organic farming, especially the idea that production shall be based on local resources. It is a strategy based on the understanding that a total integration in the market system will be devastating. While autonomy can be appealing, it also easily leads to isolation both mental and social. Therefore, pursuing individual autonomy has limited ability to change the bigger picture.

Another strategy is based on building new economic relations, which gradually can replace the capitalist market economy. I am proposing systems in the tradition of cooperatives, communities and villages; self-organised local and global societies. Models that break free from the dichotomy between state and the market, which represents a false choice we are supposed to make. It is about lifting autonomy to another level, from a personal strategy to a local and global community strategy. In the same way as the capitalist society developed parallel to, and sometimes in violent opposition to, the feudal society, another society will have to grow, stealthily, beside the market logic. It has to be combined with a change in values and paradigm and aim at an economy where man's wealth does not result in nature's poverty and the poverty of other people. It is incumbent on the organic movement to actively research and test business models that can contribute to such a new social economic order.

[1]            Which is the reason for why farmers only abandon it when there is a shortage of land.
[2]            At this very moment we experience higher food prices, but the long term trend has been ever declining prices. 

Paper presented to the Organic World Congress 30 September 2011.

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