There is no neutral market

People are gradually accepting that a healthy body requires healthy food produced in a regenerative farming system. But most tend to forget that this healthy relationship needs to be expressed through regenerative relationships between producers and consumers.

In the dominating narrative, The market is a neutral and disinterested institution where consumers meet producers and demand meet supply. In this view, the market can be filled with any content as long as there is a demand from consumers. If consumers want high quality regional food, or organic, or halal, or fairly traded it will in some way materialize and be supplied. Or conversely, if you are a small scale producer with diversified production, there is always an opportunity there in the market place. If you fail, it is just because you weren’t ingenious enough.

So the story goes. But is this really a correct description of The market? 

Banana market in Samoa

Of course not, the market is neither neutral nor disengaged. To begin with there is normally not one market, there are many different markets which fulfil different needs.  At the same time that there is a large wholesale market for food, servicing major food retailers, there can be a smaller market for farmers selling directly to small shops and yet another one for farmers who sell directly to consumers.  And each one of these markets serves different needs both on the supply and the demand side.

If you have a large farm with one or two crops you will not sell your crops with direct marketing but will be bound to large wholesale markets or being a supplier to a food, feed or biofuel industry. This also means that you will fine-tune your production according to that buyer’s demand. This will direct your choice of variety, the fertilization strategy, the time of sowing and harvesting. All in all there is a need for strict coherence between your production and the kind of market you are aiming at.

In a similar way, if you have a diverse farm with a mix of animals and plants it is highly unlikely that you can be a successful supplier to the same kind of markets. Your quantities are too small for shipping, you lack the right seed cleaner or packing technology for each of the crops, or your quality is another than demanded. So you are de facto locked out from the main market. If your farm is located close to a population center you might be able to sell your produce to affluent consumers directly or to a shop targeting those. But, even here, you will constantly be driven towards less diversity and more standardization. Your best bet if you want to keep the diversity is to become an educational farm or some kind of community supported farm. This can also be observed in all affluent countries.

If we bring the discussion even further, if you farm primarily to produce food for your family and only try to sell a surplus you will find that you are not a very interesting partner in any markets. Your supply is inconsistent, your priority is the food of the family and not of the client, and you don’t have the logistic machinery for bringing your stuff to the market. Therefore if you at all can sell, it is most likely to a middleman of some sort, who will pay you very badly. This can also be observed in most developing countries today.

The globalized food market with increasing dominance of a few retailers, a handful of food industries and wholesalers and very few input suppliers is not conducive for many kinds of producers, regardless of if there is a theoretical or potential consumer demand for their produce.

This makes it apparent that “markets” in no way are neutral towards producers and consumers. On contrary, they are based on certain types of production (and producers) and and certain types of consumption (and consumers). It is simply not true that “consumer demand” will create markets for organic, high quality, artisan regional food within the dominant market structures. Or if they do, the market will pervert the production and consumption to fit in.

This makes it quite easy to understand why the “market forces” are pushing also organic farmers in to larger scale and less diversity. As I write in Global Eating Disorder:

A study of ten organic farms in Denmark show that they too have to focus excessively on short term profits and ever-changing market requirements and have little time, energy or money to develop their farming system into a more ecologically sound system…. This experience is echoed in England and Germany. A German organic farmer explains: ‘in the beginning I carried out experimental cultivation of heritage grain varieties. But then I gave up everything that didn’t bring in money, because when the business is in the red it doesn’t make much sense’.

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This insight makes it pertinent to discuss which kind of market that is conducive for which kind of production and vice versa. An attempt to do just that was made by the FAO in a seminar in Rome 8-9 June 2016, Sustainable value chains for sustainable food systems. The workshop report contains a lot of interesting papers on various form of “marketing”, including a paper on food self-provisioning in Hungary, i.e. clearly a non-market solution.

The paper What types of markets to support agroecology, by Maryam Rahmanian, Jimena Gomez, Lorenzo Banno and Alexandre Meybeck describes four types of solutions; producer organizations, public procurement programmes, participatory guarantee systems (PGS) and community supported agriculture (CSA). The paper questions if formal global markets can support the ecological, social and economic conditions needed for an ecological production system.

The authors also note that there is a need to consider how consumer diets are affected by the market system. I believe this is a very important conclusion. There are many observations on how our modern food system has changed the diet of the population. For instance, it is gradually recognized how the diversity in soils and farms might be reflected in the gut, and how the lack of that diversity makes people sick. 

People are gradually accepting that a healthy body requires healthy food produced in a regenerative farming system. But most tend to forget that this healthy relationship needs to be expressed through regenerative relationships between producers and consumers. Some of those relationships will perhaps be new forms of markets, but I think most of them will be non-market relationships. 

While I still don't have the full "theory" developed it seems to me that any form of "market" will be based on competition and division between producers and a certain degree of exploitation. None of these are conducive for sustainable and regenerative relationships.