Friday, August 30, 2013

Top five

We have now reached 70,000 page views on this blog. I am glad someone is reading my mix of general society rants and agriculture perspectives. I can also announce that I work on a new book which will be on the interface between agriculture, food processing and food.

The top five post are:

Can we shop our way to a better world?, 26 Apr 2013, 2260 views
Money does grow on trees, 10 Mar 2013, 1221 views

Wednesday, August 28, 2013

Chicken and fertilizers

Dolly Partons sings:
We've got chicken every Sunday and the preacher comes around
And every Saturday morning daddy takes us all to town

Today "Sunday Chicken" is no institution. Chicken is everywhere and in all shapes. And it is dead cheap. 

We eat chicken because of chemical fertilizers. Let me explain how & why. And why it might not be such a bargain in the end...

Historically livestock was fed on grass, silage and hay, all crops that can’t be eaten by humans. Small quantities of pigs and chicken, who largely eat the same as humans and don’t grow well on grass could be raised on waste products or seek their own feed in the farmer’s yard or manure heap – a very popular place for chicken. Historically this meant that pork and chicken were expensive. The tradition of “Sunday chicken” is an expression of this. Expensive and rare foods were eaten on the Sunday. 

With the introduction of chemical fertilizers, farmers could specialize in grain production and the proportion of land in grain as well as the yields increased a lot. This in turn allowed for even more mechanization, so that grain production use very little labor. The essence of this is that grain now has become very, very cheap in a historical perspective. And it is in light of this we should see that chicken consumption has increased five times in hundred years in the USA and ten times in Sweden, while beef consumption is more or less stable[i].

Nitrogen fertilizers give a tremendous boost to growth. According to the European Nitrogen Assessment[iii], synthetic N fertilizer has been estimated to sustain nearly 50% of the world’s population, but its use comes with a very big prize tag. The report states that the increased level of reactive Nitrogen in the biosphere might represent the greatest single experiment in global geoengineering ever made. 

In one of the most influential scientific articles last decade, ‘Planetary boundaries: Exploring the safe operating space for humanity, professor Johan Rockström and colleagues identify the nitrogen cycle as one of three areas - together with climate regulation and biological diversity - where human beings have surpassed a threshold for stable development. The quantity of biologically active nitrogen released annually into the biosphere has increased ninefold in 100 years, and it is projected to continue from 165 million tons in 2000 to 270 million tons in 2050 (MEA 2005). 

From the perspective of the individual farmer the use of Nitrogen fertilizer is profitable. The return of one euro invested in nitrogen fertilizer is estimated to between two and five euro. But someone else pays a bigger bill. Without knowing it, if you are a European, you might bear costs of over €500 per year for farmers’ use of Nitrogen fertilizers. “Environmental damage related to Nitrogen effects from agriculture in the EU-27 was estimated at €20–€150 billion per year. This can be compared with a benefit of N-fertilizer for farmers of €10–€100 billion per year, with considerable uncertainty about long-term N-benefits for crop yield”  says the European Nitrogen Assessment.

Overuse of nitrogen fertilizer is no European specialty; it is the same or worse in many places. In the US the Mississippi, the Columbia, and the Susquehanna rivers together discharge approximately 1 million tons of nitrogen in the form of nitrate per year to coastal waters according to a report from H. John Heinz III Center – this corresponds to about one tenth of the total quantity of nitrogen applied[iv]. In Rwanda, erosion causes loss of almost 1 million tons of organic matter, some 40,000 tons of nitrogen, 280 tons of phosphorus and 3000 tons of potassium—more than the total use of chemical fertilizers according to the Ministry of Agriculture. 


Thursday, August 22, 2013

Growing out of poverty or grow poverty?

The poorest farmers in the world are unlikely to farm themselves out of poverty. They simply lack resources to invest in agriculture, and paradoxically they often even lack the labor needed as they are busy earning money with other trades than farming. To try to ease their predicament by introduction of GMOs or chemical fertilizers is a counterproductive strategy. 

A recent doctoral thesis, From Betterment to Bt Maize: Agricultural Development and the Introduction of Genetically Modified Maize to South African Smallholders by Klara Jacobson, Uppsala reinforce this understanding through a study of the Massive Food Production Programme (MFPP), an agricultural development program aiming to reduce poverty by raising agricultural production in Eastern Cape Province, South Africa. Introduction of Bt maize (a GM crop) was a main component in this program. The Bt maize variety introduced was not adapted to smallholders' farming environments. It was input-demanding and sensitive to environmental dynamics, and it was promoted for planting in monoculture.

The results also reveal that the program was not properly designed to support the improvement of smallholders' livelihoods through agriculture. The program disregarded the long-term marginalisation of smallholders, and the associated need for substantial advisory, infrastructure and credit support to increase agricultural productivity.

The program also, like so many similar programs, failed to recognize the heterogeneity of poverty, resulting in a bias towards the better-off smallholders. Many may believe that poor farmers would have ample access to labor, from themselves and their families, but the study show that the poorer were more labor constrained than those better off. For example they had to do manual hand-hoeing of their fields instead of using oxen and they had to offer their labor to others for money or food. The wealthier, in contrast could use the labor of the poorer to increase their productivity. 

I have written a number of posts on this, and associated topics earlier, e.g.
The road to food security: What works and what doesn’t?
The hunger, the people and the land
If you don't have cash you don't get to eat
Rich people are not starving – can markets help?
Millennium Villages: the Great Experiment

Ultimately, this analysis can be drawn much further. There are similar issues to consider if we want to understand why commercialization of small holder farming may not work out as well as many believe.
Most farmers will simply not survive in this process. If they did, there would be enormous over-production of agriculture commodities. After the introduction of cross-Atlantic steamships, European farms had difficulties to cope with competition from North America. The response was to introduce protectionist measures. Still the pressure of competition was a lot lower for them than it is for poor farmers in developing countries today. To believe that they could compete with their manual labor, their muscles, with tractors driven by fossil fuel is simply not at all realistic, and the result of this is seen everywhere.

In addition, because of the productivity gains in developed countries, agricultural prices dropped with some 60 percent in the period 1960 to 2000 (Dorward et al 2002). As the productivity, and energy use, of the poorest farmers remained much the same, it is obvious that they lose out. At current prices, it would require one life of labor for a manual farmer to acquire a pair of oxen and small animal drawn equipment, and ten generations of labor to buy a small tractor (Mazoyer and Roudart 2006). The productivity gap has widened over the last decades, both relatively and in absolute numbers (see table below). 

Agricultural labour productivity, dollar per man-year
Agriculture as share of GDP
Low income countries
Middle income countries
High income countries
United Kingdom
Source: World Bank 2007

You can read more on this here: Agriculture: How cheap energy (and capitalism) increased the gaps between rich and poor

Monday, August 5, 2013

The world after money

Blindness to the impact of non-economic factors on economic processes, belief in the infallibility of free markets and the reliance on irrelevant statistics such as the GDP worked reasonably well during the economic expansion that reached its peak in the late twentieth century. But the end of cheap energy, which doubtless is a reality, means that the challenge is no longer in managing abundance but in managing the end of abundance. That is the key message in Archdruid John Michael Greer’s* The Wealth of Nature: Economics as if Survival Mattered, New Society Publishers. 

Greer discusses economics from a no-nonsense perspective and links it to its original meaning of householding: labour, land, pins, baskets and bags of wheat. He discerns three layers of the economy. The real primary economy is the natural resources we utilize in what we normally see as economic processes in factories, mines and fields. In Small is Beautiful, British economist Eli F Schumacher points out that the primary economy must always come first because it constitutes the foundation of production of secondary goods.

In the secondary economy, it is usually possible to substitute one set of goods for another if the supply of the second set of goods runs short or the price gets too high. This forms the basis of economic theories. But it is an assumption that does not apply to natural or primary goods. Greer says, “A failure to distinguish between primary and secondary goods is at the root of a great deal of today’s economic nonsense.”

The production and exchange of goods and services among human beings is a subset, a fairly small one, of a much larger economy that embraces the entire natural world. But in today’s “economy”, instead of adjusting to that the secondary economy has been dwarfed by yet another layer – the financial economy. This is supposed to be worth many times more than the value of all the actual goods and services in the world. Ironically, this third layer was originally just a small off-shoot of the secondary economy; it was a tool for improving the operations of the secondary economy.

Though the growth of the tertiary economy is based on debt, this debt is all but real. Our real debt is to the future generations and to Nature; it is neither the paper debt issued by the government nor the digital debt issued by the banks. In this way, we have turned the economy upside down. The virtual, tertiary economy built on abstractions is referred to as “the market”. It dictates the rules of the secondary economy and ignores the preconditions of the real primary economy.

All attention to date – and the debate between left and right and between neo liberals and social democrats – is about the arrangements evolved to address the relationship within and between the secondary and tertiary economies. The primary economy of Nature, the base of the entire structure, has essentially no place in the economic policy of today’s industrial nations; “it means that mismatches between the primary economy and the other two economies not only won’t be addressed — they won’t even be noticed,” says Greer.

One important reason why this could happen is the use of fossil fuels. We have unleashed natural assets (the primary economy) on a scale never dreamed about before. Therefore, as Schumacher says, “Energy cannot be treated as one commodity among many, without reducing economics to gibberish, because energy is the gateway resource that gives access to all other resources.” The link between GDP and use of energy is more or less self-evident with this view. Energy extraction and economic growth interacts in a positive feedback loop, i.e., a loop where the components reinforce each other. But as Donella Meadows points out in Leverage Points: Places to Intervene in a System, positive feedback loops are mostly self-destructive.

This can’t go on forever. The whole industrial age can be seen as the “mother of all bubbles” driven by the fantasy of infinite economic growth on a finite planet. This mega bubble has spawned a second bubble of financial speculation, for which the main vehicle is money.

According to Greer, there are at least three problems with the money economy. The first is its dominating power. This means that almost all economic exchange is driven towards monetary exchange; the creation of an economic monoculture. The second distinctive feature is that it makes it harder, not easier, to value certain very large classes of goods and services. Prominent among these are Nature’s values and the social values of our communities, culture and society. The third is that money functions as a good in its own right, and the right to use it functions as a service. The entire world of finance, from savings accounts and installment loans up through the dizzying abstractions of today’s derivative markets, unfolds from this third property of money.

Greer sees a strong link between bubbles and distribution of wealth: “It’s not an accident that the most devastating speculative bubbles happen in places and times where the distribution of wealth is unusually lopsided.” When wealth is better distributed, more of it will circulate in the productive economy of wages and consumer purchases. He also sees a more global side of this inequality: “One important consequence of the industrial system was a massive distortion of patterns of exchange in favor of the major industrial nations,” i.e., the poverty of the Third World countries is an integral part of the prevailing global system. Greer also points to the role of money and the tertiary economy in the distribution of wealth. I find those three observations very interesting and plausible. I would have appreciated if the Wealth of Nature had analysed them more and if they could have been more clearly addressed in the final chapters.

There are a number of flaws in economic theory. For instance, in theory, the production and price of a commodity are entirely determined by the balance between the desire of consumers to buy it and the desire of producers to make a profit from producing it. That is actually only valid when either supply or demand is not constrained by factors outside the economic sphere. Very often there are such constraints – not only natural limits but also limits of a political or technical nature. After all, many brilliant ideas never materialize for a number of non-economic reasons. Greer also shows how cut-throat competition in a laissez-faire market doesn’t always produce improved access to better and cheaper goods and services, as Smith argued it would. Instead, it is one of the main driving forces for the concentration of shops and suppliers, so much so that now one needs a car and has to live in a city to access services that were available everywhere fifty years earlier.

Greer is deep into the “collapse narrative”. He stands for a “long descent” version and not a chaotic, rapid, dog-eat-dog descent, according to the established typology in the peak-oil, end-of-growth sphere. He even wrote a book titled The Long Descent. At times he may still sound like one of the end-of-the-world doomsayers: “A decade from now, let’s say, when half the American workforce has no steady work, decaying suburbs have mutated into squalid shantytowns and domestic insurgencies flare across the south and the mountain west....” For me that is hardly an example of a “long descent”; it is, instead, a rather rapid collapse. The collapse will also be very deep according to Greer, and human population is bound to shrink “as malnutrition becomes common and public health collapses.” (I discuss the various collapse narratives in Chaotic collapse or long descent?).

He foresees a future in which the secondary economy suffers from chronic underinvestment, and collapsing infrastructure becomes a dominant factor in daily life. A growing fraction of our supplies of energy, resources and labor have to be used for bringing the energy that keeps the entire economy moving. This functions as a tax, in kind, on every productive economic activity.

Like many others, he refers to earlier collapses to make his case. In particular, he refers to the collapse of the Roman Empire, admittedly more relevant than the collapse of the culture of Easter Island or the lost Viking colonies of Greenland, as a case of the collapse of a complex global empire, which is what we can call the capitalist civilization. He builds heavily on Giambattista Vico’s Principles of a New Science Concerning the Common Nature of Nations and on Joseph Tainter’s Collapse of Complex Societies, which is perhaps better known than the former.

Apart from the main narrative about the three economies and the collapse, Greer also discusses our patterns of thinking. Our prevailing rational paradigm is based on “what exists is limited to what can be known; what can be known is limited to what can be measured; and what can be measured is treated as though it was identical to its measurements.” Because we can’t measure real wealth, we use money as a rough-and-ready way of sorting out the relative value of different kinds of wealth. Most economists talk about money when they think they’re talking about wealth. This confusion also blocks our minds in trying to find solutions for the situation. It makes our minds orientated to ways of finding money to invest in the green transition or to finance the welfare state. Even for our personal life, we look for economic security in the sense of having enough money to live a good life. But as he points out: “Over the longer term, it’s safe to assume that the vast majority of paper assets now in circulation, whatever the currency in which they’re denominated, will lose all their value”

In addition to money, our civilization is also obsessed with technological progress to a religious extent. “The faith in progress has drawn strength from the unquestionable fact that for the last three centuries those who believed in the possibilities of progress have generally been right.” People and societies, therefore, will cling to technology as the savior. New problems will be solved by technological remedies, and “shiny new machines” will doubtless push industrial civilization further into descent like an ancient Greek tragedy. “Put another way, a civilization that lives by the machine can expect to die by the machine as well.” Greer doesn’t put a lot of faith in discussions about the green economy. That thought relies on the modern religion of progress, a belief that the accumulation of technical knowledge is the main source of our wealth. But in reality, our wealth as well as our massive technical progress is driven by fossil fuel extraction. “The explosion of technical knowledge was a consequence of that, not a cause.”

Many of those that agree there will be a big turnaround still believe we can pick and choose the technologies we like and bring them with us to the future. In particular, the Internet is one of those technologies which is claimed to be useful. Greer is not convinced: ”Very few people realize just how extravagant a supply of resources goes to maintain the information economy.... each one of the big server farms that keep today’s social websites up and running use as much electricity as a midsized city.”

That it may not be possible to maintain the Internet has to do with what he calls the Economics of Contraction. This contraction will pose an additional challenge to the future, as most of our technologies displaced older technologies that provided the same services on a more sustainable basis. As the industrial age winds down, human muscle will again be the main source of wealth and it will make no sense to use scarce resources to do things that human labor can do equally well. How much it costs to equip a worker to do any given job will become a central economic issue, rather than how much it will cost to equip a machine with an operator.

While he is convinced of the need for change and the inevitability of change, considering the dwindling energy supplies, Greer doesn’t advocate a radical revolution. “The evidence of history suggests that with societies, as with other natural systems, change happens most successfully by way of simple mutations rather than complete reshapings.” He puts his faith in a mix of reform politics, monasteries (!) and, I believe, in the laws of contraction acting as a new environmental factor giving us humans quick – and harsh – feedback on the ways we chose.

As I grapple with these questions, I am taking a special interest in the concluding chapters. However, I find that many of the prescriptions fall short of adequately addressing a predicament of the magnitude Greer explains. He uses the USA of the 1950s as an example of something that worked: very strict regulation of the “tertiary” economy, but a laissez-faire attitude for the material economy. It did work, certainly; but it worked not as much by the virtue of the policies, as by the fact that it was the upgoing period of the mega bubble. He suggests we should increasingly pay for our use of Nature; a thought shared by most ecological economists, and increasingly by liberal mainstream economists as well. He doesn’t discuss the possible drawbacks of this way of monetizing Nature, and how it could affect power relations in society. Corporations should be treated more like natural persons, i.e. held accountable by law. But he fails to address that most of the evil-doing by corporations is perfectly legal; not only legal but mandated by law to maximize profits from the activities. Greer suggests that all taxes would be on the primary economy and the tertiary economy. This works well for one of the two main roles of the tax system, rewarding some behaviour and discouraging others. But I fail to see how we could build a sustainable public sector based on a tax system like this. The more successful the policies are the less taxes will be gained.

Greer points out that those who are most vehemently in favour of a free market are often those that argue for privatization of the commons, overlooking the fact that the market itself is a prime example of a commons. Perhaps the future of money itself could be to transfer it into a common good?

Greer advocates monasticism, i.e. preserving culture within the monasteries. His argument is about those monasteries carrying culture from one glorious period to the following one, through a period of decline, for example, from the Roman Empire to the Renaissance. However, it seems a little difficult to see the relevance of those as a survival strategy for humanity. Most people didn’t survive the Middle Ages in the monasteries, and the Arabs, I believe, did more for carrying the culture of ancient Greece to the Renaissance, than others. We don’t even know if the Middle Ages were so bad, do we?

While I have reservations about some of his proposed measures, I am quite convinced about the trajectory that Greer describes – a trajectory of reduced complexity and relocalization. These are driven by hard factors and not political whims. On the contrary, politics still tries to address the failures of our civilization with more of the same.

The current drive for local food and self-sufficiency is more than a fad or a political project. It is a natural response to economic contraction, collapse in complexity and dwindling energy. It is also about individual survival. Many will move towards direct production of goods and services for their own use, using local resources. This is both a step towards the “world that will emerge after money” and a safe bet for the individual. Just as our society, fossil fuel, the religion of progress, extreme division of labour and our consumerism are all part and parcel of the same process, any future change will also have to be coherent between individual choice, prevailing ideologies and the big societal processes.

The Wealth of Nature provides many insights which are useful for this future.

*John Michael Greer (born 1962) is an American author who lives in Cumberland, Maryland. He currently serves as the Grand Archdruid of the Ancient Order of Druids in America, a position he has held since 2002.

He blogs on