I’m Craig Sams and I’ll
begin by telling you a bit about me as my background mirrors
some of the things I’ll discuss today.
My great great grandfather Lars Dugstad emigrated to America
in 1842 from Norway. He lived in a dugout cave for 15 years
while he cleared 80 acres of virgin Koshkonong Prairie land
in Wisconsin. Meanwhile the US Army cleared the Indian victims
of broken treaties to territories further west. His was the
typical pioneer experience. His son Ole, my great grandfather,
took a covered wagon to Nebraska in 1887 and broke the prairie
sod on 160 acres of land in Dakota County. His son Lewis, my
grandfather farmed that land until I was born there in 1944.
His only son, my Uncle Floyd, sold it and went on to become
one of the first beef feedlot operators on the farm he bought
across the Missouri River in Iowa. Floyd offered me a chance
to start out with 625 acres in 1966, but I was worried by the
idea of implanting diethylstilbestrol hormones behind the ears
of cattle and I made the fateful decision to come to London
instead and open a macrobiotic restaurant. That led on to a
career in retail, manufacturing and marketing of organic foods
that included Whole Earth Foods, Green & Black’s chocolate
and also my work with the Soil Association. Uncle Floyd’s
son, my cousin Daniel, now farms those 625 acres as part of
an expanded total of 1600 acres that he farms, with one assistant.
Last year he lost $40,000 dollars on sales of $300,000 but ended
up with a net farm income of $110,000 dollars, thanks to a hefty
$150,000 subsidy from the US Government. He farms better land
and is a good farmer. Others claim more in 'crop insurance'
and other welfare schemes.
So from Thomas Jefferson’s dream of a rural democracy
where every self-sufficient and prosperous family had 40 acres
and a mule we reached, in 3 generations a corporate state where
a viable family farmer needs 1600 acres and a lot of machinery
and GM crops and still operates at a huge annual loss that has
to be made up by subsidies. I will try to track this progress,
if progress is the term to describe it, during the course of
this talk.
The world has never seen surpluses of food such as those that
emerged in the past two centuries and it’s worth examining,
simplistically, the economics of agriculture to see what has
been happening. My argument is that agriculture, like much of
our civilisation, has suffered from what the Club of Rome in
their Limits to Growth report in 1972 called Overshoot and Collapse.
I hope to end on an optimistic note, pointing a way forward
where agriculture can play as significant a role in achieving
a soft landing as it has played in supporting the overshoot.
I also do not apologise for using American examples as the US
has been the main driver of the process that I describe.
To get a feel for what has happened to agriculture, let’s
look at Ireland, an early example of rural depopulation. Most
Irish peasants worked on large English-owned landholdings.
100 acres economics Without
Potatoes
Oats for horses: 20 acres
Oats and barley for Irish: 20 acres
Wheat for England: 60 acres
100 acres economics With Potatoes
Oats for horses: 20 acres
Potatoes for Irish: 5 acres
Wheat for England: 75 acres - up 25%
By 1700 the economics of an Irish estate were well-established:
on every 100 acres you’d grow 20 acres of oats to feed
the horses, another 20 acres of oats and barley to feed the
peasants and your profit came from the 60 acres of wheat that
you shipped to millers in Britain. Then the potato came along
and improved the numbers. Instead of needing 20 acres to grow
oats for your peasants, you could feed them potatoes from 5
acres, thereby freeing up 15 acres to plant with wheat. 15 acres
on top of 60 acres is a 25% increase in the income from an estate,
so every owner did it. Supply went up, but inevitably prices
went down. Irish peasants could also grow potatoes on their
smallholdings as the leaves were poisonous to pigs and rabbits,
so the population boomed. When potato blight hit in 1845, again
in 1846 and again in 1848 the population of Ireland was 8 million.
IRISH HEDGE DWELLERS
A million died, a million left for America, those who remained
in abject poverty provided a pool of desperate, starving and
incredibly cheap labour that fed the stream of Irish workers
that built canals, roads and railways and did the washing and
cleaning in Britain and its colonies.
This depopulation of the countryside to provide cheap industrial
labour set a pattern that was to be repeated in Europe and the
rest of the world again and again and continues apace.
LOUISIANA PURCHASE
In the United States the Louisiana Purchase in 1803, followed
by the Lewis and Clark Expedition of 1804 began the process
of opening up the vast American Midwest. Initially much Louisiana
Purchase land was a dumping ground for Indian tribes displaced
from lands to the east, but agricultural settlement expanded
westwards. In Nebraska, the Dakota County Historical Society
records the names of the first pioneers, who came in the 1850s
and they were all Quinns, Murphys, O’Connors, McDoneughs
and Connollys. The German and Scandinavian farmers came a few
decades later. Many of those Irish refugees from the potato
famine had escaped being navvies or factory fodder and broke
the prairie soils on the new frontier.
In 1846 the Corn Laws had been repealed, which opened up Britain
to grain imports and created a free trade in agricultural products
across Europe.
By the 1870s the long agricultural depression caused by excessive
food surpluses was well under way. Cheap beef from the ranges
of the Midwest and cheap wheat from Canada and the US drove
down grain prices and land values in Europe and Britain but
fed the industrial masses cheaply, which helped keep wages down
and manufacturing profits up. Displaced farmers worked hard
for long hours for money to buy food that was cheaper than ever
before. The industrial population boomed on the back of cheap
food to such an extent that even the slaughter of World War
1 didn’t represent much of a drag on industry. The world
was awash with food and prices reflected it.
After World War 1 the technology of tank manufacture was readily
adapted to tractor production and during the 1920s and 1930s
tractors replaced horses on the world’s larger farms.
TRACTORISATION
Nebraska - 100 acres economics With Horses
Oats for horses: 20 acres
Food for family : 10 acres
Cash crop income: 70 acres
Nebraska - 100 acres economics With Tractors
Oats for horses: 0 acres
Food for family : 10 acres
Cash crop income: 90 acres - up 28%
Revisiting the Irish example earlier, we can see that the replacement
of horses by tractors added another 20% to the land that contributed
crops for cash sale. Tractors needed gasoline, which, with oil
prices at 10¢ a barrel in the early 1930s, was a lot cheaper
than oats. Refineries in nearby Texas and Oklahoma fuelled the
deep ploughing that enabled farmers to mine the humus-rich fertility
that had been built up in the prairies over the 25 millennia
since the end of the Wisconsin glaciation when the ice sheets
retreated northwards.
As Wendell Berry put it:
"We ploughed
the prairie and never knew what we were doing because we did
not know what we were undoing."
By the 1930s the structure of the soil, compacted by tractors
with steel wheels and churned by deep ploughing, turned to dust
in the dry summer months and filled the air with particles of
once-fertile soil. The silt washed down the Mississippi but
the humus was lost. The carbon dioxide contribution of humus
decomposition in the past 150 years represents 1/3 of the contribution
from fossil fuel use.
Thus a major contribution to global warming has occurred as
a result of opening up the prairies and the subsequent tractorisation
of agriculture worldwide.
25% of TOTAL CO2 INCREASE IN PAST 150 YEARS CAME FROM
AGRICULTURE
(PgC = Gigatonne or
1 billion tonnes Carbon)
The annual carbon release from farming now has more than doubled
from the annual level of the 1930s. Total agricultural carbon
emissions from 1850 t0 1970 exceeded that of fossil fuels. (130
PgC from agriculture, 124 PgC from fossil fuels totalling 254
billion tonnes.
All this food didn’t make much difference to industry,
after the crash of 1929 people didn’t put their money
in banks and the financial system couldn’t get back on
its feet. The Great Depression was a global economic slump.
Then came salvation in the unlikely form of Adolf Hitler.
World War 2 pulled the world out of economic depression. Faced
with labour shortages and huge demand, agricultural wages shot
up from 10¢ an hour to $1 an hour. Industry profits doubled
between 1940 and 1944.
With unlimited demand from
Europe, the farmers of Canada and America found ready outlets
for their surpluses and turned on full scale production that
mirrored that of their unbombed factories.
In 1944 Charles Erwin Wilson, President of General Motors and
Director of the War Production Board called for a Permanent
War Economy to prevent a post war return to the Great Depression.
"America needs a permanent
war economy"
Charles E. Wilson, President General
Motors, 1944
The permanent war economy in giving birth to the military industrial
complex, also gave birth to the military agricultural complex.
Both operated on the same principle – if the free market
wouldn’t take every thing that was produced, the government
would take up the slack, keeping the economy humming. The same
companies that made tanks could make tractors and pickup trucks,
The same companies that made nitroglycerine explosives could
make nitrogen fertilisers. The same companies that made nerve
gas could make pesticides. It was state-controlled conversion
of swords into ploughshares.
Seed Magazine No. 7 May 1972
The problem was that farmers weren’t up for it. Either
a command economy or false economic signals were needed to force
them to industrialise and adopt chemical inputs. The Soil Association
was lobbying hard for a sustainable post war agriculture based
around rural communities and the avoidance of chemical fertilisers.
ICI lobbied hard for increased nitrate use and eventually, with
the Agriculture Act of 1947, ICI won the argument and the British
government fell in line with the policy of its Continental and
American counterparts by introducing a direct cash subsidy,
Ten shillings a bag, on nitrate fertiliser. This made all the
difference to farm economics and once nitrates were in use,
weeds thrived on the extra nutrients and created a market for
herbicides, fungal infections proliferated on the densely packed
plants and created a market for fungicides and the elimination
of fertility-building rotations created a market for insecticides
to deal with the inevitable buildup of pest populations. CO2
emissions from the soil escalated as humus and soil structure
collapsed under the onslaught of chemical fertilisers.
Subsidies set land prices and farm incomes from then on. Agriculture
had, in effect, been nationalised and was part of the Permanent
War Economy that has been the economic model of the West and
of Russia ever since. In Britain much of industry was nationalised.
Farmers are too diffuse to be nationalised, but the mechanism
to control their incomes existed in subsidies. In the US farmers
saw what was coming and formed leagues where they all faithfully
promised each other never to accept subsidies. But once some
farmers took the subsidy, they could sell their crops cheaper
and then the rest had to follow suit if they were to be competitive.
This marked the end of market forces for farmers and the beginning
of their decline. The inherent bias of government policy towards
larger producers led to the steady extinction of small farms.
The same thing happened in industry. The US Government pays
out $167 billion dollars a year to support America’s largest
corporations. In 1950 25 per cent of US tax income came from
corporations. That figure is now 10 per cent.
EISENHOWER
In 1960, when President Eisenhower
handed over power to John Kennedy, he warned against yielding
to pressure for wasteful public funding of agriculture and applied
research. He warned that, "In the councils of government,
we must guard against the acquisition of unwarranted influence
by the military-industrial complex. The potential for the disastrous
rise of misplaced power exists and will persist".
Last year the
US Govt paid out more than $30 billion in direct payments to US
farmers and an estimated further $150 billion in indirect subsidies
including tax breaks on fuel and equipment, tariffs, protective
pricing, drought loss payments and purchasing surpluses.
“Every major US cabinet department
has become a conduit for government funding of private industry”
Stephen
Moore, Economist
The Cato Institute
Halliburton, Monsanto, ADM, Cargill, General
Dynamics, Brown Root, Tyson, Smithfield, Dupont, Dow,
Lockheed, Boeing, Exxon, Merck, Florida Crystals
The biggest recipients
of this support are the largest corporate farmers in the USA,
most with registered offices in Brooklyn New York, as well as
commodity giants like Cargill and ADM, agrichemical and seed suppliers
like Monsanto and Dupont and huge producers such as the Fanjul
family’s Florida Crystals sugar empire and meat producers
Tyson and Smithfield. The real damage from this subsidy policy
is not just the financial cost to the American economy, though
the numbers are significant. The real cost is to the health of
the global economy, to the stability of our climate and to human
health.
The cost to the health of the American people has been spelled
out by such authorities as the Harvard School of Public Health.
The fast food industry has contributed directly to the epidemic
of obesity, diabetes, heart disease and osteoporosis. These degenerative
diseases threaten the future capacity of developed economies to
finance the health care time bomb that is on the horizon. If subsidies
on corn and soybeans alone were removed the cost of a hamburger
would be forced up from $1.00 to the more realistic price of $3.00.
This would directly affect rates of junk food consumption. If
the subsidised rangeland that supports the production of cheap
calves was charged at a market price and if the externalised costs
of the beef industry such as unsustainable levels of water use
and water pollution, environmental degradation and greenhouse
gas production were taken into account a hamburger would cost
closer to $5 or $6. At this level hamburger consumption would
be reduced to the healthier levels which public health authorities
urgently recommend. The cost of obesity to America is estimated
at $117 billion just in lost wages and work days and in additional
healthcare costs, a high price to pay for unfeasibly cheap burgers.
This is just a few billion less than the cost of the subsidies
that fund cheap meat, fat and sugar.
ECONOMIC DAMAGE
But the real harm of the subsidy system is to the global economy.
So how do American subsidies cause world poverty?
First of all, forget about export subsidies, which America has
promised to phase out by 2010. They’re relatively marginal.
The big beast is direct subsidies to farmers.
How
Subsidies Cause Poverty
Example: Maize (Corn)
Mexican farmer cost of production: 4¢ lb - US Farmer cost
of production: 6¢ lb (but US farmer gets 3¢ lb subsidy)
Chicago Board of Trade Price: 3¢ lb
Results:
- US exports corn
to Mexico
- 100,000 Mexican farmers abandon their farms and risk lives to
seek work in US or in maquilladora factories
- Heritage maize varieties GM contaminated
An American farmer grows maize at a cost of 6¢ lb. A farmer
in Mexico can grow maize at a cost of 4¢ lb. So you’d
think that Mexico would export corn to the US. But the world market
price is set at 3¢ lb on the Chicago Board of Trade on the
basis of subsidised American farmers. If the Mexican farmer seeks
to make a profit over his cost of 4 cents per lb, grain traders
will import or, more importantly, threaten to import American
corn in order to continue to purchase at a price of 3 cents. In
the cruel world of subsidised agriculture, the so-called 'inefficient'
Mexican farmer goes out of business trying to compete with truly
inefficient American farmers whose cost of production is really
6 cents per lb, but who have the mighty American taxpayer prepared
to subsidise their farm gate price down to 3 cents lb. 100,000
Mexican farmers have been driven off the lnd in recent years,
those who remain face contamination with genetically modified
corn that would never have been imported if NAFTA was a true free
trade area. Real trade justice would be to either abolish the
subsidies or allow farmers all around the world to get the same
handout from Uncle Sam.
Subsidies in the US determine the commodity prices quoted on the
Chicago Board of Trade, which are the benchmark for commodity
prices worldwide. It is not the actual exports as much as the
fact that a phony price is the global standard that causes the
damage.
The 4 main agricultural crop categories are feed grains, food
grains, oil seeds and textiles. The same principles apply to all
– the price is set in Chicago and this becomes the world’s
commodity price. All the US has to do is set the baseline prices
of corn, rice, soybeans and cotton – all the rest of the
commodities in those categories will follow.
Soy subsidies provide cheap hydrogenated oil which competes with
natural palm and coconut oil and the byproduct of soymeal makes
cheap animal feed.
It costs Texas cotton farmers 70¢ lb to grow cotton, but
they sell it at world price of 30¢, just low enough to keep
West African cotton growers on the breadline.
The subsidy is set at a level that makes American farming internationally
competitive despite the fact that it has become hopelessly uncompetitive
because of high fertiliser costs, high machinery costs, high transport
costs, high land costs, high pesticide costs and high environmental
costs.
In the UK production-based subsidies are on the way out. Farmers
no longer will automatically profit from planting prairies of
rape and barley or cramming fields with sheep. They will optimise
production and scale down their operations.
As a result of the changes in European subsidy policy, this is
now happening and record numbers of farmers are putting their
land into conversion to organic production or Countryside Stewardship
programmes. However, in the US production subsidies still rule
and the Conservation Reserve Programme is capped so that only
a lucky few succeed in land retirement and rehabilitiation.
Developing world farmers, if they were allowed to benefit from
their greater efficiency, would prosper, their countries would
prosper and problems of disease, overpopulation and poverty would
be greatly alleviated by the increased domestic and foreign income.
We also know that, as family income increases, family size decreases,
it’s the paradox of wealth but another good reason to liberate
food prices in order to non-coercively stabilise global population
growth.
So can we quantify the actual cost of subsidies to the world economy?
If All Else Were
Equal:
US & EU farm output value: $350 billion (at CBOT prices)
US & EU farm subsidies: $350 billion
“Real Cost” of US & EU output: $700 billion
US/EU % of global food output: 16% or 1/6th
$ Value of global food output: $2.4 trillion (5 x $350bn)
Value at “Real Cost”: $4.8 trillion
Annual Income gain 3rd World $2.4 trillion
(Third World debt: $1.3 trillion)
A simple calculation can be made on the basis of the US and EU
current subsidy levels. James Wolfensohn, the President of the
World Bank, sets the total subsidy spend at $350 billion - $1
billion a day. Subsidies now represent 50% of net farm income
in the US and the EU.
That means that, if subsidies were not in place, US farmers would
need to double their prices to make a living.
On the basis that the US and the EU represent 1/6 of the world’s
food production, we can assume that, if commodity prices doubled
worldwide the increased income for the developing world would
be $2.4 trillion per annum. Total foreign aid amounts to $50 billion,
or just 2% paid back to the victims of what amounts to global
theft from farmers outside the industrial countries that benefit
from the rigging of market prices.
That’s the theory. Let’s get back to reality. Because
the producers of the developing world operate on lower cost bases,
are more efficient and have a higher real productivity level,
the price of agricultural commodities would probably not double
as market forces would come into play at this stage.
American and EU production of cereals and oilseeds would fall
dramatically if faced by global competition and a level playing
field.
Supply would be reduced and this would lead to price increases,
but most likely not a doubling. The other impact would be that
the value of farmland in developing countries would go up and
the value of farmland in subsidised regions would fall, but I’ll
come on to reasons why it need not.
So what chance is there of stopping the great subsidy con? Recent
WTO decisions on sugar and cotton subsidies indicate that results
can be achieved through using the laws that were designed to promote
free trade. However, the US has done nothing on the cotton issues
and the EU is aiming for a phased adjustment of the sugar regime
over the next 10 years. When you realise that the sugar regime
has its roots in the Napoleonic Wars it’s hard to be optimistic
about imminent reform, but it does seem to be happening.
Of course, in the short term, massive amounts of aid would be
necessary to enable industrial agriculture to restructure and
find a new and viable equilibrium. One way is to buy the farm.
It’s interesting to speculate that if, in 1994, the governments
of the West had offered every farmer the total value of their
farm in exchange for removing them permanently from the subsidy
system that by now that payment would have been recovered in the
saving on subsidy payments and future subsidy costs would be zero.
But there is another factor that is stronger than government policy.
The price of oil is going up. It was $10 a barrel when Bush, an
oilman, seized control of American foreign and domestic policy.
It has reached a plateau of $65 barrel but will rise again. It
competes with and is substitutable for natural gas or coal. The
increase in the price of natural gas has already led to the closure
of half of North America’s fertiliser manufacturing capacity
in the past 4 years.
Demand for our diminishing reserves of natural gas for domestic
heating, cooking or as motor fuel will ensure that natural gas,
which generates tax income, will always be, as a priority, used
in those applications where it can bear the extra cost of being
taxed. This does not include fertiliser manufacture, where it
is already too expensive. People are prepared to pay a 300% tax
on petrol and diesel for their cars, which represents the real
value of personal transportation to consumers. When similar taxes
are imposed on bunker oil, aviation fuel, heating oil, natural
gas and power generation then people’s subsequent choices
will reflect the real cost of fossil fuels to climate change.
EROEI
Energy Returned on Energy Invested -
KiloCalories
• Man with hoe - 20:1
• Organic Farm - 1:5
• Industrial Farm - 1:15
Growing food needs energy too. To produce a calorie of food using
fossil fuel dependent industrial farming takes 15 calories of
energy input. To produce a calorie of food organically still uses
5 calories of energy input. A man with a hoe uses 1 calorie to
produce 20 calories of food. He is the most efficient, but the
least productive. From an EROEI point of view the organic farmer
is closest to optimising energy use and as energy prices increase,
the organic farmer, whose only fossil fuel use is in running tractors
and equipment, will have the economic advantage and will be most
likely to be able to afford fully taxed fuel. When the oil price
reaches $80-90 per barrel farmers will no longer be able to justify
the use of inputs such as fertilisers and pesticides. But that’s
just farm economics. On a global scale, the farmer who is virtuous
in carbon use is due for big rewards.
We’ve already seen that one quarter of the total CO2 increase
since 1850 has come from the opening up of the prairies, tractorisation,
irrigation and fertilisation.
Climate change is the most pressing issue of our time and the
market for carbon credits is emerging and looks set to take on
real significance. At the moment carbon trading is unwieldy and
inefficient because it is controlled via the United Nations. Now
it is moving into a more responsive market atmosphere as the volumes
traded make real markets possible and attract the interest of
commodity traders.
Carbon dioxide
isn’t the only greenhouse gas we get from agriculture.
Intensive cattle rearing also leads to increased methane (CH4)
emissions. Feeding a cow on corn and soybeans leads to an acid
rumen, incomplete digestion and methane emissions several times
those of cattle fed on forage such as grass and hay. When you
consider that the combined weight of cattle on this planet exceeds
that of human beings, that’s a lot of gas.
Agriculture also produces nitrous oxide (N2O) as a direct result
of nitrogen fertilisers.
NITROUS OXIDE
AND THE GREEN REVOLUTION
The Green Revolution was only marginally about new wheat and rice
varieties, it was mainly about using fossil fuels to increase
irrigation, tractorisation and nitrate fertilisation.
Nitrous oxide is 21 times more powerful as a greenhouse gas than
carbon dioxide. Nitrate fertilisers don’t just accelerate
carbon dioxide release from soil, they add nitrous oxide to the
burden.
During the 1980's, it was estimated that the world lost 240 billion
tons of topsoil in excess of new formation ; that is more than
half the amount found on all current US croplands combined
The magnitude of soil C
loss:
30-40 tonnes/ha
Agricultural soils now contain a lower SOC (Soil Organic Carbon)
pool than their potential, and thus have a Carbon sink capacity.
More topsoil
is lost each year in the US now than during the dust bowl years
in the 1930s.
Iowa prairie soils 150 years ago had about 12-16" of topsoil;
now they have only about 6-8" of topsoil. That is, they have
lost half their topsoil since they began being cultivated, and
loss there continues at 1-3 tonnes per year.
PUTTING CARBON BACK IN SOIL
In most soils it would take 30 years of active carbon sequestration
to reach a point of soil organic carbon equilibrium. The Rodale
Institute in Pennsylvania has operated test plots for the past
25 years and has recently published research showing that organic
farming methods including the use of green manures, minimal tillage
and composting can increase Soil Organic Carbon by 1 tonne per
hectare per year. But how much is carbon worth? Humus contains
nutrients and it holds water. Irrigation depends on fossil fuels
and there are diminishing water resources everywhere. So we need
soils that will retain water, which humus-rich soils do. In addition
humus contains nutrients that, at today’s fertiliser costs,
are worth about 20¢ a kilo. Therefore the rational price
for humus-rich soil should be $200 tonne.
If the market price for sequestered carbon was $200 tonne then
farmers using heavy equipment and nitrates would have to buy carbon
credits to balance their net carbon losses. The average industrial
farm in Iowa is still sending 3 tonnes of CO2 per year per hectare
into the atmosphere. The average organic farm is locking up 1
tonne of carbon per year in the form of humus and this represents
over 3 tonnes of CO2. Organic farmers would be selling them carbon
credits and making up to $200 per hectare per annum. Frankly,
$40 per hectare would make all the difference.
If carbon sequestration was rewarded farmers would only justify
the use of chemical fertilisers as a means to accelerate the humus-building
process, not to feed crop plants direct. They would be used to
build up capital so that future generations can live on the interest
of soil fertility. We owe it to them, having squandered the humus
we inherited from the 19th Century.
Once high energy costs and carbon-trading economics kick in subsidies
will be unnecessary. Prices will go up, land values in developing
world would go up and land values in the developed world would
go up if they adopted carbon sequestering practices. That’s
a better deal than arguing with government ministries and at the
WTO.
Farming on a small scale will become more attractive. Hobby farming,
where the farmer has other sources of income but uses their farmland
to augment that income, will expand. We will see more diversity
in the countryside, so that restaurants specialising in local
food won’t suffer the dilemma illustrated in this Honeysett
cartoon.
As oil prices go up and as the inherent efficiency of local producers
is realised, local and organic production will replace centralised
and industrialised production.
There will be a further benefit from localisation. The New Economics
Foundation has shown that when a consumer spends £1 at a
supermarket, that £1 has about £1.20 of value to the
local economy because only a small part of it is circulated locally.
When a consumer spends £1 at a local shop it has a value
of £2.80 because a larger part of it is circulated locally.
When a consumer spends £1 at a local shop that is selling
locally produced food that £1 has a value of £4 because
all of it is being circulated locally for longer.
We’ll all be a lot better off with local economies.
Seen from this perspective, the average 10% lower prices in a
supermarket with its headquarters in Arkansas selling food that
has travelled long distances seems like a pretty poor deal.
Add in the fuel cost of delivering the food, the fuel cost of
going shopping and the cost of refrigerating food that isn’t
fresh because it is bought to last for a week and more people
will shop locally and daily for local food.
It’s not the end of civilisation as we know it. In fact
the 20th Century, or the Century of Oil, may be seen as the bridge
to the beginning of civilization as we dreamed it might be.
The Permanent War Economy is nearing collapse. China and Japan
fund it to the tune of $400 billion a year of US Treasury borrowing,
enough to pay for subsidies and corporate welfare but not enough
to support the $1000 billion a year military budget. Fighting
for oil costs much more than finding alternative energy sources
or saving energy. The emergence of a carbon emissions trading
market will finally put a real value on the benefits of Soil Organic
Carbon sequestration that organic farmers have been doing for
free for the past several decades.
Agriculture could provide up to one third of the greenhouse gas
reductions necessary to stabilise our climate. Impending water
shortages will be alleviated too as water retaining humus builds
up in the soil. We may see a lot more horses in the years ahead
as the economics of farming adjust to current, rather than stored,
sunshine as a power source.
SOLAR POWER
MOWING SOLUTION
The great thing
is that it can happen in the marketplace. The market for carbon
may be immature, but it’s growing up fast.
I wish I could
say that it is the force of our arguments and persuasion that
has brought about this sea change. More truthfully, there is an
inevitability about it that springs from our understanding of
climate change and the final exhaustion of the great post war
boom of the past 60 years which, without cheap oil, would not
have been possible. Or at the very least it would have taken a
very different shape.
It was a great party in many respects, if you were on the rather
exclusive guest list.
But it’s getting late now and the trick for all of us is
to minimise the hangover.
© Craig
Sams
Martin Radcliffe Fellowship Lecture October 13 2005