Why that little table is so important

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Last week I wrote about a table of figures I find highly interesting, and earlier this week I found a way to publish the table itself. At first glance, the numbers bring into question the almost universally supposed efficiency of modern agricultural practices and — especially for those of us with active imaginations — perhaps the supposed efficiency of modern industrial methods in general.

But all of that’s on the surface and, like most of the good things in life, this little table yields its true value only after a bit of contemplation. To my mind, its real value is that it demonstrates the extent to which social, economic and environmental sustainability are inherently interrelated — none of them in a privileged position with regard to the others, because each contains the other two within itself.

To try to clarify, let me pose a simple question — given that agricultural land is in limited supply (always has been), whyever would a society (e.g., our society) move from minimally mechanized methods to heavily mechanized — industrialized — methods that yield less than one-third as much food per acre? (OK, the table says “hectare”, but the difference in productivity applies regardless of unit size.) Why would a farmer consciously give up over two-thirds of (typically) his productivity? (For those of you who’ve never met a farmer, let me just point out that we’re highly attuned to land and its use. A common saying is “I’m not greedy, all I want in life is the land that borders mine”. It’s only partly a joke.)

For more money or a more secure income? Perhaps. But median farm incomes have hardly risen over the period of agricultural industrialization (roughly, since the end of World War II). In fact, more and more families have had to sell their farms or at least take on jobs “away” to supplement (even subsidize) their farming operations. The farming crisis of the 1980’s pretty much presaged the housing/investment/financial crisis of 2007-08. Indeed, the farm crisis is instructive. The most common story was that a farm family borrowed against its real property in order to expand operations, the quickest way to expand operations was large-scale mechanization, large-scale mechanization increased yields enough to allow the family to make the monthly payments until . . . until . . . until the market in whatever crop the farm produced took a downturn. Which agricultural commodity markets always do, sooner or later. Always have, always will if left to their own devices. Low prices mean low farm incomes mean reduced (eventually, negative) ability to service loans, which leads a few farmers to have to sell their property which (if it happens to enough farmers at the same time) drives down the value of agricultural land, which reduces the collateral every neighboring farmer has committed, which can get even “performing” loans called for insufficient collateral, which can in turn force more sales until the whole local economy is in trouble.

So why did farmers borrow and invest? Remember that farm incomes have been basically flat (broad generalization, I know — there are certainly exceptions) for decades. But consumer prices haven’t been, and so farm families were easily attracted by visions of larger operations leading to larger incomes. Who painted those visions? Equipment manufacturers, pesticide and fertilizer manufacturers, lenders, agribusinesses and — sad to say — agricultural extension agents. “Get big or get out” was the word of the day. Somehow, nobody talked much about “the bigger they are, the harder they fall.”

Look at the table of energy accounts in food production. Industrialized agriculture requires huge amounts of equipment (virtually all of it financed), fertilizer, pesticides. All that consumption means large, regular profits for equipment manufacturers and servicers, chemical companies and financiers. (It certainly doesn’t mean large, regular income for most farmers.) To answer the question of why something happened, it’s often useful to ask who benefits. At least the older surviving farmers around me remember who benefited, whose profits drove their neighbors out of business. As a result, most of us have been actively looking for, if not non-industrialized ways of working the land, at least less-industrialized ways.

One possible implication of the numbers in the table is that farming as we know it is not organized to benefit farmers. Nor is it necessarily organized to benefit food consumers, who would likely be better off if agricultural yields were increased. (One common argument against non-industrial farming is that the crops it produces are too expensive. But the same people making that argument are quick to cite the “law of supply and demand” — if supplies go up, prices to down. And wouldn’t an increase of over 200% in the yield of a significant portion of agricultural land likely cause supplies of agricultural products to go up?) As with so many industrial systems, it’s organized to benefit industrialists. It demands a lot of working capital, so it benefits those who earn their living by lending funds. (Indeed, I recently read that in 1970 profits of the financial sector made up 17% of GDP; by 2007 that share had risen to 42%. Family farm incomes may be flat, but financial firm incomes clearly are not.)

So changes in agricultural production which benefited a relatively small number of people laid waste to farming society, and to the agricultural economy which had supported this nation since its founding. The few benefited, the many suffered. (Kind of reminds you of the overall financial picture since 2007, doesn’t it?) The economic health of the nation and the world suffered, as more non-renewable resources (primarily petroleum) were consumed to produce (compared to the alternative) relatively little food. Petroleum reserves were drawn down (driving the price of oil up and thus benefiting the oil companies who are often also chemical companies). Pollution was increased. Greenhouse gas emissions were increased. Chemical runoff into rivers, lakes and the oceans was increased. But dollars were being made. Lots of them. Just not by farmers.

Those societies which are most stable — like American society prior to about 1970 — are characterized by large middle classes and relatively small ratios between top and bottom earners. Only slightly below the surface of the table of energy accounts in food production is the story of how American (and increasingly, global) agriculture changed, with major negative impacts on social, economic and environmental stability. Recognize that pretty much the same story could be told of any industry that depends — directly or indirectly — on a steady stream of resource inputs and a steady demand from economically secure consumers. Recognize that the same story has recently played out in the US housing (which is to say, the global housing finance) market.

Economy, society, environment. They’re all healthy or, sooner or later, they’re all not.

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