If It’s Profitable, Is It Really Sustainable?

That an economic activity has to be profitable is considered a truism, something taken for granted and not reflected upon. But what if the opposite is the case?

When I first took up small-scale organic farming in the 1970s, I spent a lot of energy in developing new methods and machinery to increase efficiency in production. The early organic advocates went a long way to assure other growers, farmers, businesses and politicians that organic farming could be profitable, even within the prevailing economic system. Even more so, if externalities would be factored into the price (which they still are not). I see a similar discourse surrounding regenerative agriculture, permaculture, market gardening or artisanal bakery. But perhaps this assurance of profitability was misguided all along. What if profit is not desirable? What if the pursuit of profit is at the core of the ills of society?

There is an ethical perspective on profit that questions if it is fair that capital owners get richer while workers don’t. That question is justified, and could be the subject of another essay, but fairness is outside of the scope of this article. My focus instead is on what implications profit has for the economy and the ever-growing use of resources.

Profit in the sustainability narrative

In the world of business, an enterprise is considered to be viable only if it is profitable. In the prevailing sustainability discourse, we are told that there is no contradiction between profitability and environmental or social progress. On the contrary, profitability is seen a prerequisite for sustainable development. Environmental politics is full of concepts such as “triple-bottom-line” and “people, planet, profit”. But, by and large, this is simply not correct. Profitability is incompatible with sustainability. Let me explain why.

Profit derives from a surplus created by economic activities, a surplus after the costs, including capital costs, have been paid. Profit can be generated in different ways, through trade, trough lending, through patents (and other forms of royalties) or through production of goods or services. Some profits created by trade or rents are essentially about redistribution of wealth. If I buy cheaply and sell dear, I can make a profit, but I have not created any additional value for the economy. My supplier and the buyer just paid me to facilitate their exchange (whether they need me or not is another story). Similarly, lending by banks redistributes capital from the borrower to the bank, which, in turn, share some of that capital (the rent or profit) with those that deposited their capital in their bank accounts (the borrower may or may not invest the money in some profit-making venture). My focus here is rather by the kind of profit generated in the production of goods or services.

On the floor of Chicago Board of Trade, photo: Gunnar Rundgren

Profit is not the same as making ends meet. It is quite apparent that you can’t run a business that is constantly losing money. Profit is also not about being able to maintain buildings and replace machinery that is worn out. Profit is about surplus, which will be invested in new enterprises and, consequently, generate new profits. Profit can, of course, also be used to increase consumption. But one person’s increase of consumption, means another person’s increase of production. If that other production also is profit-driven, ­it will lead to the same result.

Pyramids, feasts, war, investment or simply less work?

Clearly, we can’t shun “profit” altogether. An economic surplus has been a pre-condition of all kinds of desirable material progress of humanity. Through increased productivity in farming, more work could be invested in opening up new fields, making irrigation systems and developing other industries. Meanwhile, surpluses in societies were historically often directed into other purposes than increased production, such as the building of pyramids or cathedrals or expended in sacrifices, festivals, lavish parties or great works of art. The ultimate, and tragic, way to destroy accumulated surplus capital was by warfare.

The most tragic option is to destroy accumulated surplus capital in the act of war. Yet there is a far more peaceful alternative, too. If production is more efficient and productivity increases, it could simply result in less work instead of an economic surplus. It appears that this was a favored option in many egalitarian societies, while in hierarchical societies the elite will try to extract as much as possible from the dominated classes. The poor work ethics of the peasantry or colonized people often commented upon by their rulers was an expression of this propensity to work less rather than contributing to the accumulation of capital (mostly the capital of someone else).

Sorting tomatoes in the Netherlands, Photo: Gunnar Rundgren

The problem we face in the capitalist market economy—and a primary reason for its “success” as well—is that under the twin masters of profit and competition, increased productivity must be invested in ever increasing production. Because of competition, neither multinational firms nor little family farms have the option to turn increased productivity and profit into cultural expressions, less work or investment in machinery with the main purpose to make the work more pleasant instead of more productive.

Profit, then, is intrinsically linked to economic growth; there can be no economic growth without profit and there can be no profit without economic growth. This mirrors the finding that it takes research and development (R&D) to maintain profits, yet it takes profits to maintain R&D. In the aggregate, the total profit of all economic agents will be zero if there is no increase to the output of products and services. Economic growth, in turn, is intrinsically linked to ever increasing demands on natural resources. Therefore, in essence, profits equals increasing claims on natural resources. 

You can’t beat capitalism on its own turf

This also implies that the business sector cannot become sustainable through a process where “sustainable” businesses outcompete others in the capitalist market. Take, for example, the experiences of the cooperative movement. Many cooperatives, to avoid going out of business, have been forced to emulate the model of limited companies rather than changing the prevailing business model.

While it may be possible for profiting firms to exist in a steady state economy, it certainly couldn’t be the norm. Furthermore, at any given time, the profiting of some firms would have to be countervailed by the demise of others.

Instead of pursuing “sustainable” business models dependent on profits, we need to establish alternative markets and networks where consumers and producers are motivated by socially beneficial purposes. The choice of what to do with surplus (if any), then, is determined according to the needs, values, and priorities of those involved. Such networks should not be forced to or try to compete with capitalist firms, but gradually replace the profit-laced capitalist turf with new playing fields.

There are many such initiatives already. Some are based on individual lifestyle changes, where people opt to live through simplicity and self-sufficiency. Others are based on co-production and shared interests instead of the producer-consumer divide. Community-supported agriculture, housing cooperatives, and many civil society institutions operate more or less outside the capitalist market.

Obviously, political action and regulations will play a major role for paving the way for such models, while simultaneously reigning in the worst excesses of capitalism. Redistribution of wealth, reduced maximum working hours and environmental and social regulations already play important roles in this respect. Not privatizing public services and extending public services (or civil society services) into new domains keeps big parts of our lives and necessities outside of the logic of the market. Legislation should be passed to define and facilitate other ways organizing human cooperation, such as the ones discussed above. 

First published in the Steady State Herald 20 May 2021, the version above is slightly different. 

 

Further reading on the link between growth and profit:

A not-for-profit world beyond capitalism and economic growth? Organizing for the post-growth economy by Jennifer Hinton and Donnie Maclurcan

Profit and Economic Growth by Gennady Bilych

We can't all live on grass-fed beef - but we can eat more of it

Those that claim that grazing animals can only make a marginal contribution to human nutrition are mistaken. Those that claim that we can feed the global population with grass-fed beef are equally wrong.

It certainly not possible to sustain the global population on a diet that is dominated by products from grazed animals, but grazing ruminants make a very significant contribution to human nutrition.

It is not likely that current total meat consumption (i.e. including also poultry and pork) could be sustained just from grazed animals.

It is likely possible to substantially increase global production of meat and milk from grazing animals to reach a quantity similar to the current consumption of beef and milk.

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Those of you that follow my writings have probably noted that I question the opinion that veganism is superior from an environmental and agronomic perspective. I will not repeat what I have written in many articles (here and here are two examples). Here, I will, however, partly turn my attention to a much smaller, but still very vocal group of “carnivores” who see a meat-heavy or total animal diet as the best possible, for the body and for the human environment. This is often coupled to the promotion of regenerative grazing. I will not enter into the discussion of the health benefits of various diets (my own humble opinion is that humans seem to be a very adaptable species when it comes to diet, ranging from largely vegetarian diets to animal heavy diets).

I think it is quite obvious that livestock can be raised in a very sustainable way, of which well adapted grazing is one of the best examples. It is equally obvious that today livestock is often not raised in an environmentally sustainable way, not to speak about the ethical aspects of livestock rearing. Instead my focus here is on the possibility (regardless if it is desirable or not) of supplying a human population of 8 billion (which will be reached in a few years) with livestock products from (regenerative) grazing on a scale that would allow a diet dominated by meat and milk.

Let’s first establish some baselines. The human body needs some 2100 calories of energy per day as well as some 50-100 g of protein and some 50-80 g of fat according to most nutritional guidelines. I will here stick to the lower numbers for protein and fat, recognizing that the actual protein consumption in many countries is way higher. Animal sourced food contributes around 18% of the calories, 40% of the protein and 45% of the fat in the global human diet. Notably, the production of meat from poultry and pork is almost three times higher than the production of meat from the grazing animals. Average per capita consumption is 11 kg of cattle, buffalo, camel, sheep and goat meat together, 16 kg of pork, 15 kg of chicken and 90 liter of milk.

Because of the dominance of cattle (including buffalo) among the grazers I will focus on beef as the meat source and milk from cows. Whenever relevant, my calculations will include other animals that are predominantly grazing. The dietary composition of beef carcass varies much depending on race, age, sex and feed. Here I use 18 % protein and 10% fat and 1600 kcal per kg of carcass. Retail cuts will have considerably lower fat content as quite a lot of the tallow will not be present in the cuts and protein content will be higher as most of the bones and some of the fat are not included in the cuts. From a nutritional perspective I think it is best to keep to the carcass composition assuming that all the fat and more of the bones are actually integrated in the food chain. Carcass weight doesn’t include offal, head, and other parts of the body of which some could be used as food. On the other hand, in rich countries consumers eat only part of the carcass weight (in Sweden estimated to only 60%), so it seems like a reasonable limitation. The composition of milk also varies, but not as much as it does from meat. Here I use 1 liter of milk with 4.5 % fat and 3.5% protein and 700 kcal of energy.

Comparing the protein and energy values of beef and milk with human needs:

	protein	Energy (kcal)
Annual total need  per person	18 kg	766,000
Quantity needed for total supply: Beef	100 kg	470 kg
Quantity needed for total supply: Milk	514 kg	1094 kg

 

As can be noticed, there is a huge gap between the possibility for beef to supply us with protein and the ability to sustain us with energy. Globally, milk is a more important protein source than beef and milk is even more important as a source of energy and fat. This needs to be kept in mind, as the debate often is stuck with meat.

Many of the grazing animals are not grazing anymore or get only part of their ration from grass. According to the FAO GLEAM database pure grassland systems produce around one third of the combined protein production from cattle. Most production is in mixed systems where cattle graze to some extent and get additional feed. Even though not well reflected in this classification I would venture that there is a substantial production of milk which is quite similar to the feedlot system, where cows never graze and get a high share grains and protein feed. Nevertheless, grazing is estimated to contribute 55 % of ruminant feed  according to Mottet et al 2017.

If we look into the grasslands and meat production of the ten countries having most grasslands in the world according to FAO statistics we see that the average production of meat per hectare of grasslands is between 2 and 60 kg per hectare and year. But, in many of these countries feedlots, with farmed crops provide a large share of the meat produced. I would say that among the countries listed only Mongolia, Kazakhstan and Saudi Arabia have a production that is totally dominated by grazing. Feed lots, on the other hand, are often linked to cow-calf operations where mother cows are kept on grass and their offspring is brought to feed lots at the age of 6-9 months. This means that also in the USA, the homeland of the feed lots, grazing still plays an important role. 

Grasslands and production of beef, mutton and camel 2018
	million hectare	million kg cw	kg/ha
China, mainland	393	6462	16
Australia	328	3000	9
United States of America	245	12300	50
Kazakhstan	186	654	4
Brazil	173	10027	58
Saudi Arabia	170	268	2
Mongolia	112	372	3
Argentina	108	3122	29
Russian Federation	92	1832	20

These ten countries have almost half of the grasslands of the world and they produce around half of the total quantity of meat from the species that are adapted to grazing. The average production is 21 kg of meat per hectare. According to estimates around 55% of the total feed of ruminants originates from grasslands.* If we use the FAO figure of 3.6 billion hectares and multiply that with 12 kg per hectare we will get some 5,5 kg (cw) of beef per hectare. Making a similar exercise for milk, but a lower share of grazing we will get some 40 liters of milk from grasslands. This adds up to just around 2,4 kg protein per year, or 6-7 grams per person and day, or 12%-14% of protein needs. This is a valuable contribution to the protein supply, but very far from making it possible to “feed” humans with meat and milk from the world’s grasslands. Counted on an energy basis (calories) livestock products from grasslands contribute only 5% of the calories needed – no wonder that Mongolian herders complement their animal heavy diet with potatoes and wheat.

Even with (heroic) assumptions of double productivity with improved grazing methods, such as AMP or holistic grazing, we are very far from “feeding the world”. However, such improvements would make it possible to produce beef and milk on current consumption levels from grasslands only. While I am a fan of regenerative grazing, I believe there are far too many open questions for us to assume that a doubling of productivity is possible, but I also don’t think there is a basis for ruling it out.

Notably, figures on global grasslands are very variable. A recent article in Nature by Jinfeng Chang and colleagues estimates that there is almost 5 billion hectares of grasslands in the world, but that only 1.6 billion hectares are grazed by domestic animals (i.e. only half of the area in the calculations above, but presumably the grasslands used are those most productive). In addition, the same study estimates that the grazing intensity, expressed as how big share of the above ground net primary production that is actually consumed by livestock is around 16 %, indicating a potential for increased production even without other productivity increasing management interventions. In Europe, Russia and USA utilization of grasslands have shrunk considerably the last two decades.

We should, of course, keep space for wild life in grasslands as well, so even if we could increase productivity and increase area of utilized grassland we can’t assume that we can use all that productivity for our domestic grazers. Even though the grazing of sheep or cattle in many cases has led to the extermination of wildlife (both other grazers and even more so predators), there are many examples of relatively peaceful co-existence between grazing animals and wild life. In our own small farm, deer, hare, foxes, voles, badgers, mice, flocks of geese and other birds, the occasional moose, lynx and many species of predatory birds also feed on our grasslands, not to speak about all the insects. Increased stocks of wild animals could also make a significant contribution to human diet as well (this depends mostly on how much ecological space grant wolves, cheetahs and lions).

But what if we also used arable land for grazing?  Most grasslands of the world have very low productivity. In part it is because of management but mostly it is an effect of a climate that is too dry or to cold and sometimes because of very poor soils. Arable land is mostly developed where the conditions are much better and where one can expect yields which are much, much higher than from permanent grasslands. In addition, arable land is often irrigated and fertilized. Let us further assume that we would take half of the current arable land and use it for grazing. Let us also assume that we can produce 250 kg of beef (cw) per hectare on those 0.75 billion hectares land. It is certainly possible in many cases to produce even more, but also there are many places where such a yield would be out of reach, especially if we envision a production without chemical fertilizers and no import of nutrients via feed. In such a scenario, we would get another 24 kg of beef per person contributing one fourth of annual protein need. If the production was oriented to milk its contribution to human nutrition could be even higher. There would be little land available for growing pig or chicken feed in this scenario, so the total contribution of livestock to human nutrition would not increase compared to the current situation. In some situations, grazing animals on arable lands may not infringe on the production of crops as animals can graze stubble, cover crops etc. To integrate grazing livestock in many crop farming systems would have many other benefits as witnessed by many practitioners.

The overall conclusion is that it is not possible to “feed the world” with a diet dominated by meat and milk from grazed animals. However, meat and milk from grazed animals make a substantial contribution to human nutrition and it is very likely that it could increase substantially, through better grassland management and increased grazing in crop farming systems, without jeopardizing human food supply. Having said that, it is essential to understand that these kinds of global averages are not a good guide for local food systems, neither for production not consumption. Food systems should be adapted to the local conditions and the possible role of ruminants (and other livestock) varies and should vary depending on the local conditions.

*

Finally, my apologies to chicken and pigs. They can also graze and they should be allowed to roam outside. There are many examples of pigs that are fed almost entirely on grazing and eating nuts and roots. Pigs are also particularly well adapted to the conversion of left-overs and both chicken and pigs can convert waste to valuable food. They have a role to play in most agro-food-systems apart from pure pastoralism, and under some conditions they are even more important than the ruminants. This is also well reflected in traditional diets.

 

 

*The nutritional quality of grass is often lower than many of the other feed stuffs, so the estimate is probably giving a bit too high weight for the contribution of grasses, in particular in milk production, which is more dependent on high quality feed.