May, 2008

Fruits of Thought

First Priority For Produce

Increasing food production is a key element of sustainability. It has to be. It is the prime directive when it comes to the social responsibility of the food industry. This point may yet startle environmentalists who soon will learn sustainable development is about the balance between environmental, financial and social responsibilities — and, sometimes, social responsibilities are going to come first.

Already we are seeing a backlash against biofuels, as it begins to sink in that all these government mandates and subsidies are designed to encourage farmers to switch from growing human food and animal feed to fuel — and that resources devoted to biofuels are not available to increase food production. One need not be a skeptic on global warming to realize it is unsustainable to divert food to fuel in a world still increasing in population and with many populations finally able to eat at a level above subsistence.

All over the world, food prices are going up. In rich countries, it is putting pressure on politicians. In poor countries, it is causing riots and threatening the progress of a generation in poverty reduction.

The solutions governments are promoting will mostly make the problem worse and ensure it continues. Among these “solutions”:

  1. Blocking exports — the reason farmers export is because someone will pay them more money than if they sold locally. To block exports is, by definition, to depress farmers’ returns. It is high returns that encourage increased plantings and the application of advanced technology to increase yields.
  2. Price controls — higher prices both provide higher returns to producers and encourage consumers to switch to alternative, lower priced foods. Price controls blunt both these incentives to produce more and consume less. As such, they encourage shortages rather than clearing markets.
  3. Criminalizing business and consumer behavior — laws against “hoarding” and earning “windfall profits” criminalize normal business activities and make the situation worse. The opportunity to earn a windfall profit is precisely what will motivate entrepreneurs to transfer food from where it is plentiful to where it is scarce — and letting government officials second-guess business decisions on appropriate inventory levels is a recipe for disrupted production.
  4. Subsidizing items — this encourages shortages by encouraging consumption at below-market prices. It is far better to give people money or food stamps and let them buy the best value rather than a priori decide to subsidize one item.

The real solutions are not obscure:

  1. Free trade in food and ag products — let product be produced where it can be produced most efficiently and used by those who value it the highest.
  2. Drop anti-GMO laws and regulations — it is perfectly clear that to produce the food we need, we have to increase yields. The alternative would be destroying countless thousands of acres of rainforest and woodland. To do this we need the best technology. We should be underwriting more GMO research rather than trying to choke off this new technology.
  3. Avoid giving away food as food aid — dumping food in a market serves to reduce the returns of local farmers. How can a local grower compete with free food? Better to give people resources so they can purchase food at market value. If we are dealing with a genuinely desperate situation such as famine, make sure the local production is all purchased at top dollar so as to insulate producers from the effects of free food on the market.
  4. Create finance operations to make sure credit is available to growers in poor countries so they can buy seed, fertilizer, etc., despite the global credit crunch.
  5. Invest more in ag research and ag extension to bring new technology to bear on this problem.

As farmers react to high prices by planting fence post to fence post and apply new technology, we will see this problem mitigate. Yet it is crucial to use this moment to remind the world and the non-governmental organizations about the purpose of our industry — to feed the world.

Cutting energy use, reducing our carbon footprint, etc., may all be great ideas — but only if we have first taken care of job one: feeding the world.

In Salinas, we are seeing actual reductions in acreage and production; in tree fruit and grapes, we see consolidation in packing and marketing, but, so far, the long-term nature of planting trees means we are not seeing any drops in production.

Yet with a growing population both in the United States and around the world — with more affluent people in places such as China and India clamoring for top-quality food, including fresh produce — it may well be very important to realize the enormous efforts we have made to get tiny improvements on food safety and the enormous expenditures made to measure carbon footprints and look at industry impact on the environment, even the massive efforts to score better pay and conditions for migrant workers, all these things and all the good they do will count for nothing if we can’t feed the world.

The industry has been in a defensive posture related to food safety, workers’ rights, GMOs and much more. Maybe it is time to turn the tables and point out that our real job is bringing the fruit of the earth to the people of the world. We do this job well, and we need to measure other things people would have us do against the way such proposals will contribute or detract from feeding the world.  pb

 

 

 

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