Friday, September 30, 2011

People, Planet and Prosperity-organic agriculture as a development concept

People, Planet and Prosperity-organic agriculture as a development concept[1]

Gunnar talking at the 17th organic world congress
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. The richest 2 percent of adult individuals own more than half of all global wealth. One billion people are starving, they are all poor. Most of the poor are involved in farming. How can anyone claim that the prevailing development model is successful, when it fails on so many accounts?

At this moment, the UN system is rallying around the concept of the Green Economy to be showcased at the Rio +20 conference in 2012. It is largely a repackaging of Sustainable Development, which was the buzz word of the Rio conference 1992. As we all know, political slogans get old and what sounded cool at one time sounds increasingly dated ten years later. The essential tenet of both the Green Economy and Sustainable Development is that it is possible to combine economic growth and a capitalist market economy with social improvements and environmental stewardship. Well, not only that it is possible but that it is the only way. This is presented in many different ways to citizens. Increasingly, it is presented as a business venture with ideas like Corporate Responsibility and the Global Compact or slogans like People, Planet and Profit. Stop a second and think about it: People, Planet and Profit. This means that you put profit at the same level as People and Planet, which is absurd. In the Green Economy context, profits are not seen as part of the problem but as part of the solution.

Solar energy, recycling, biogas but also an increased use of information technology, nano technologies and GMOs are presented as part of the new technologies that will enable us to continue on the path of a growth economy. Investments are the key. Organic agriculture fits well into the Green Economy. It tries to get more money out of the land, increase farmers income, while at the same time produce in a more environmentally friendly way. So far so good, I will say. In the same way as recycling is a lot better than no recycling and solar energy is better than nuclear or fossil, organic is better than conventional. Undoubtedly, it delivers more, with less destruction of nature. As such is deserves its rather prominent position in the Green Economy campaign. And we should be grateful for that several UN agencies, in particular UNEP and UNCTAD, are featuring organic agriculture in this context. Also, in the European Union and in many countries of the world, governments see the potential of organic for environment, for climate change, for rural development and for food security, and support it in various ways. Last but not least, we have convinced a lot of consumers so that they willingly and voluntarily support the detoxification of farming and the (well at least partial) liberation of animals by buying organic product, mostly paying a higher price.

Organic agriculture is one of the real showcases of the Green Economy, a smashing success of which we should be proud. We may be impatient and think we have failed, but for us with some, or perhaps mainly, grey hair it is easy to see that we came a long way already, a very long way indeed.

However, it is easy to forget that organic is exposed to the same pressures of the market that all other farms are. And that this influences organic farms in similar ways as non-organic farms, i.e. to introduce labour saving technologies, to specialise, to externalise costs etc. Organic farms are now in many countries bigger than non-organic farms. Organic cows in Scandinavia are milked by robots to a larger extent than non-organic cows. Organic farms are highly mechanised and use considerable quantities of fossil fuel. Organic farms follow the same business model as non-organic farms. Organic farms are profitable. And this is a great success for the organic movement. Huge multinationals buy up organic companies. Wasn’t this what we always wanted? If we say we want it to be profitable to farm organically or market organically, we also say that it will pay better to invest in organic than in non-organic, leading investors to the organic sector, investors asking for dividends.

There is no coincidence that many low income countries have developed from being net food exporters to net food importers. There are two ways a rural population can cope with population growth. One is by migration to the cities and further and one is by intensification. By intensifying production much more food can be produced per area unit. Typical strategies for intensification are irrigation, terracing, integration of livestock and plant production, integration of aquaculture and plant production, production of root crops and vegetables as opposed to grains etc. The agricultural intensification that is the normal response to increase in population is labour demanding. But in many developing countries, this intensification is not happening, despite there being so many people unemployed, why? Let’s look at the main drivers in this: the competitive global markets and cheap (fossil) energy.

Through the ease of transportation and storage (mainly driven by the fossil fuel economy), there is more or less a global market for grains, pulses and oil crops, with similar prices all over the world. Those prices are determined by those producers that can combine large areas with mechanisation, i.e. those than can use a lot of resources and a lot of external energy. The only dramatic increase in labour productivity we see in the farm sector is linked to the increased use of external energy sources, be it for pumping water, driving tractors or making chemical fertilisers. In one barrel of oil for 100 dollars, there is embedded energy corresponding to the annual work and toil of some 14 healthy workers, let’s call them our energy slaves. A smallholder in a developing country doesn’t even use that quantity for her farming; if she uses no artificial fertilisers, the total energy consumption in the farming system is more or less negligible. Compare that to a mechanised broad acre farmer in France or America. He command energy resources corresponding to hundreds barrels of oil or more, i.e. he uses a thousand energy slaves for his production, and, as a result of this (there is no magic at all) he produces thousand times more food than his colleague in Africa. Each one of these energy slaves costs just some ten dollars per year, which forms a benchmark against which food prices and ultimately hourly wages of a farmer or farm labourer in a developing country have to compete. The mechanism of comparative advantage by low labour costs is totally out of play when labour is pressed down far below its level of sustenance not to speak about reproduction, that is, raising a family. That the farmer in rich countries, in addition, also get subsidies add harm to injury.

This result in that food crops are grown for self consumption in the country side and the local markets in cities is supplied by imports. For some labour intensive crops, the situation is different and cheap labour is still a strong competitive factor. For those, mainly export crops, investments, such as protected structure and irrigation can be profitable, which is why we see such investments in the export crop sector but not in food crops. But, by and large, a lot of people have no future in agriculture. Unfortunately, they also have no future in manufacturing or services in the least developed countries. This demonstrates quite clearly how limited development opportunities are for farmers in the poorest countries[2]. They are just too far below on the ladder for ever being able to climb. Well, they don’t have a ladder at all.    
I was asked by Markus Arbenz (IFOAM Executive Director) to reflect on if there are things we need to change in order to be a “realistic alternative”. “Realistic” often seems to mean something that is easy to “sell” to the existing power groups or the public opinion. But it is this kind of realism that got the whole planet into a mess. I believe it is time to be unreasonable and time to be unrealistic. For organic to be an interesting alternative it needs to de-couple from the obsession with standards as being the main tool for development. Big parts of the movement has a misconception of the role of organic standards, they believe that organic standards define what is organic, and therefore, they insist on loading all possible and impossible things into the standards. Sure, there are standards there that can maintain organic as a better proposition, but those can only work within the prevailing economic paradigm, which is, by and large, ruled by a competitive market and rent and profit-seeking. Within that framework, you can change technologies quite easily; e.g. there is no problem to use an organic fertiliser instead of a non-organic, you can use mechanical weeding instead of chemicals. But if you start to regulate the things that go beyond the conditions of the competitive market, you just drive organic operators out of business, because the truth is that the competitive market is not compatible with the organic principles. Therefore, some of the suggestions for increasingly stricter standards are counterproductive, and will neither change the world nor organic farms to the better.  

Don’t misunderstand me, there is a room for organic standards and for a premium organic market and we can improve organic standards, make them better and smarter, within those operating conditions. But, in parallel, we must also respond to those bigger challenges that are not solved by asking consumers to voluntarily pay a higher price for good products. We must engage much more with the operating conditions that shapes the farm sector at large. And there are many such conditions. Some of them are made by government policy, but by far the most powerful drivers of the farm sector are the market and the use of cheap energy. If you ask a farmer, why she uses a certain method or technology that is no good and not another one which is better for animal welfare, for the environment or for the workers, you will almost uniquely get the response that it is because of prices, because of competition, or “demands from the market”. I believe it is high time that the organic sector takes on these operating conditions, which are not only about the output market (the buyers and consumers), but also about the input market, the labour market, the land market, access to nature resources and also the market for knowledge or intellectual property as it is called today.

We also tend to forget that agriculture activities dominates more than 50% of the land area, and almost two thirds of the biological primary production (bio mass) takes place in the farmed landscapes. Because of this, farming is not only a way of producing food and fibre, it is also a management system for the planet. And I don’t think anybody believes that the management of the planet should be delegated to “the market”,

We need to change the game. The game changer is a new development paradigm, a paradigm that goes far beyond Sustainable Development or the Green Economy. In that new development paradigm, regenerating nature resources, regenerating communities with a regenerative economy and not an extractive economy. We will not speak about People, Planet and Profit; we will speak about People, Planet and Prosperity. It is only within a regenerative economy we will be able to farm fully according to the four principles oforganic as beautifully formulated by IFOAM; the principles of care, health, ecology and fairness

[1] Gunnar Rundgren, Key Note Speech, Organic World Congress in South Korea, September 2011
[2] The same competition factors have already driven most small farmer away from farming in developed countries, the difference is that, in  most cases, there was an industry there wanting their labour.

Gunnar Rundgren, Key Note Speech, Organic World Congress in South Korea, 30 September 2011

First posted 26 September

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