Sunday, June 19, 2016

Food: trading away our future - Part III



Because of productivity gains in developed countries, agriculture prices dropped by some 60% in the period 1960-2000. As the productivity of the poorest farmers remained much the same, it is obvious that they have lost out. Their value of production, regardless if they eat it themselves or sell it, has gone down considerably, making them poorer both in relative and absolute terms.

In two previous posts I discussed the impact of the rapid growth of international trade in food and agriculture commodities. This globalization of food commodities has led to, or enabled, an increasing disconnection between human populations and the land and water resources that support them through crop and livestock production. The increase in trade has big environmental repercussions as well as a big social and cultural impact. Trade is not only a response to market demand, it creates demand and therefore recreates the need for it; trade becomes its own justification.

In this post I will discuss the impact on producers from the global competition.

According to economic theory, poor countries should compete in trades that require a high labor input and have low capital require­ments. Histori­cally, agriculture has been such a sector. But today’s agriculture, in the rich countries at least, is characterized by a low labor input and very high capital input. Mechanization has crushed the comparative advantage of poor countries and poor producers. Poor farmers can only be competitive in crops which have not yet been successfully mechanized, such as coffee, tea, flowers, avocadoes and green beans. At the beginning of the 1960s developing countries had a trade surplus in agricultural produce of around US$7 billion, but by the beginning of the new millennium that balance had shifted to a deficit of around US$20 billion and, if we exclude Brazil this figure is much higher, at US$27 billion.[i] [ii] It is not only the money flow that has drastically changed direction, but also the flows of calories. In the late 1960s developed and developing countries were more or less producing their own calorific needs, but in 2009, many more develop­ing countries had become net importers of food. Sub-Saharan Africa went from a four­teen percent surplus of calories to a thirteen percent deficit.[iii]

In 2012, I visited two very different farmers; Bob Stewart in Illinois and Susan Mkandawire in Zambia. Bob farms in the Corn Belt, south of Chicago and Susan farms not far from the international airport in Zambia. They are both maize growers, and as farmers they shared worries over the weather, prices, access to labor and many other things. They were also very different, or at least they operate under very different conditions. Bob’s yields of maize are regularly more than 10,000 kg per hectare while Susan, in a good year, gets around 2,000 kg per hectare, i.e. Bob harvests more than five times as much per area unit. That is remarkable. But what is much more remarkable is how much land they farm; Bob’s farm is 3,200 hectares while Susan manages less than half a hectare.  

Bob grows maize in Pana, Illinois
Bob works the farm with a brother and three full time employees, their father and Bob’s wife are also involved in the operation. In peak season they have four more helpers; each person thus manages more than 400 hectares, i.e. they spend less than five hours of work to manage the total land area that Susan farms with her husband, Fred. Because they are very poor, Fred takes on other jobs outside the farm when he finds them; at the time of my visit he was occasionally working as a watchman. Apart from the maize they also grow vege­tables which are sold in the market in Zambia’s capital Lusaka. But let’s focus on the maize. Together they spend some 266 hours per year tending their 0.4 hectares of maize. They hire a team of oxen to do the land preparation; which saves them 120 hours on land prepara­tion by hand, still the dominant method in Sub-Saharan Africa. 
Susan grows maize in Zambia


Through the ease of transportation and storage (mainly driven by the fossil fuel economy), there is more or less a global market for grains, pulses and oil crops, with similar prices all over the world, tariffs or other government interventions being the only other factor of importance. These prices are determined by the producers who can combine large areas with mechanization, i.e. those than can use a lot of resources and a lot of external energy. The dramatic increase in labor productivity we have seen in the farm sector is linked to the increased use of external energy sources, be it for pumping water, driving tractors and combine harvesters or making chemical fertilizers. It is almost self-evident that Susan in Zambia has not a chance in hell of competing with Bob in Illinois. This example begs the question of whether global food markets really work to our advantage. Poor people and poor countries are supposed to get a comparative advan­tage from low labor costs. But this mechanism is totally broken when the cost for labor is depressed far below sustenance levels, not to speak about reproduction, that is raising a family. Because of productivity gains in developed countries, agriculture prices dropped by some 60% in the period 1960-2000. As the productivity of the poorest farmers remained much the same, it is obvious that they have lost out. Their value of production, regardless if they eat it themselves or sell it, has gone down considerably, making them poorer both in relative and absolute terms.

(this post is almost entirely drawn from my book Global Eating Disorder)



[i]                   Regmi, A. and M. Gehlhar (editors) 2005 ‘New Directions in Global Food Markets’, USDA Agriculture Information Bulletin Number 794.
[ii]                   FAO 2007 The State of Food and Agriculture 2007 Food and Agriculture Organization of the United Nations.
[iii]                  FAO 2012 Statistical Yearbook 2012. FAO Statistics Division Metalink: P2.HUN.FAO.TFS.SSCAL, p. 165
[iv]                  National Cotton Council of America 2013 US and World Cotton Outlook September 2013 NCCA.

Tuesday, May 31, 2016

Food: Trading away our future - part II



The increase in trade has big environmental repercussions as well as a big social and cultural impact. The increasing distance makes it easier for market actors to externalize costs and more difficult to citizens and the political system to influence the way things are produced. Trade is not only a response to market demand, it creates demand and therefore recreates the need for it; trade becomes its own justification.

In a previous post I demonstrated the rapid growth of international trade in food and agriculture commodities. Global food production increased with over 50% between 1986 and 2009. Meanwhile the trade in food for direct human consumption has increased from 15% of total production in 1986 to 23% in 2009, thus about one fourth of food production is traded.

This globalization of food commodities has led to, or enabled, an increasing disconnection between human populations and the land and water resources that support them through crop and livestock production. The graph of global agricultural trade below from Graham K. Macdonald et al 2015 (reproduced with permission), says more than thousand words. [1]
Click to view


















Trade has improved food access, but primarily for those that are rich. In 1965 insufficient domestic production meant insufficient food supply, but in recent years the deficit has been increasingly compensated by rising food imports.[2] Of course, you have to afford food in order to buy it in international markets; the average per cap GDP in countries that achieve sufficient food supply by imports was approximately tenfold compared to countries with insufficient food supply and production.[3]

*
But isn’t it more efficient that countries with good conditions produce food for those with less good conditions?

Perhaps, but this is really not driving trade. For example, Sweden has good conditions for arable farming and even better for livestock production. Despite this it imports almost 50% of its beef and a lot of other agriculture products it could grow. Meanwhile Sweden has let more than 1 million hectare of arable land and even larger areas of pasture revert to forest or lie idle. The reason that beef is imported is simply that it is cheaper to produce somewhere else.

As I showed in my previous post trade can very well go from places with scarcity of resources to places where these are abundant, as other economic factors (or government support programs or tariffs) will determine where production will be most competitive. The water use efficiency of food trade (i.e., food calories produced per unit volume of water used) has declined in the last few decades.[4]

The global food trade has also affected agricultural landscapes, fully in line with trade theory. Competition drives farmers in to more and more specialization and larger scale in order to cut costs. This first leads to that farms go into monocropping and, ultimately, economies of scale will make whole landscapes devoted to one or a few lines of production/commodities. The implication on bio-diversity is huge and ironically some of these bread baskets are increasingly becoming food deserts. 
*
Trade puts pressure towards harmonization of standards which has a number of non-desirable effects.
First, the development of international (harmonized) standards is dominated by the richer countries and as they are the main markets, exporters and exporting countries tend to go along with the standards demanded by main markets. This puts producers in exporting countries in a disadvantage as their needs are mostly not listened to. Other stakeholders in exporting countries, such as consumers or farm workers have even less say in the development of these standards.

Second, while some environmental problems are global (global warming), most are local or regional in scope. For example, in some countries, limiting erosion or water use in agriculture may be a primary objective, in others eutrophication or pesticide contamination of waterways might be central and in a third country with intensive agriculture the loss of bio-diversity in the agriculture landscape. It is highly unlikely that international standards can encapsulate all this. It is equally unlikely that the various social and cultural situations will be well reflected in international standards.

Third, there is a tendency for international standards to move towards lower standards. For example, the EU farm lobby in Copa & Cogeca requests that the license for glyphosate as a pesticide shall be renewed as a ban would “put us at an unfair  competitive disadvantage vis a vis non-EU countries who export to the EU.” Similar arguments can be heard in almost all countries. 

*
Trade can allow population densities larger than those that would prevail if these regions would have to rely solely on domestic supply. But the increasing distance between consumers and producers comes with a lot of problems. As Jeniffer Clapp[5] outlines in Distant agricultural landscapes,  ”…distance enables certain powerful actors to externalize ecological and social costs, which in turn makes it difficult to link specific global actors to particular biophysical and social impacts felt on local agricultural landscapes. Feedback mechanisms that normally would provide pressure for improved agricultural sustainability are weak because there is a lack of clarity regarding responsibility for outcomes.” Consumers are mostly unaware of the ecological and social consequences of their consumption choices and even if they wanted to it makes it hard for them to influence.

There is a similar effect on the political level. When the costs associated with a products are externalized onto other actors and landscapes that may be half way around the world, the politics of addressing those problems is fraught with challenges and governments in the country where the products are consumed have no jurisdiction in the places where it is produced. This is one of the drivers behind the efforts to use “the market” and “consumer choice” to favour sustainable production. But the ability of “consumer choice” to have a real influence on the production in distant places is very limited (I elaborate my arguments around this in the post Ethics for sale? and even more in my book Global Eating Disorder).

Trade can and is more often a means to sustain affluent lifestyles of wealthy nations, while reducing negative environmental impacts of crop production on their own territories, allowing them to shift burdens elsewhere.[6] Meanwhile, trade often perverts the consumption of the resource-poor. In the article Taking Political Ecology Global antropologist Richard Wilk shares his observations from the Kekchi in Belize: ”I watched mothers selling the eggs from their family’s chickens, to spend the money on Coca-Cola and candy, while their children clearly needed protein more than sugar. I saw men selling their pigs to get money for a boom box, or a carton of cigarettes, when they could have been sending their kids to school, or building a latrine, or improving their corn storage, or planting some cocoa.”[7]
*
Trade is not only a response to market demand, it creates demand and therefore recreates the need for it; trade becomes its own justification. The argument goes along these lines:
“Development makes people happy. Trade is good for development. We need free trade in order to promote more trade. Thus, free trade makes more people happy”



This post will be followed by two more on the trade theme, please stay tuned.

[1] Graham K. Macdonald et al 2015, Rethinking Agricultural Trade Relationships in an Era of Globalization http://bioscience.oxfordjournals.org
[2] Porkka M, Kummu M, Siebert S, Varis O (2013) From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability. PLoS ONE 8(12): e82714. doi:10.1371/journal.pone.0082714
[3] Porkka M, Kummu M, Siebert S, Varis O (2013) From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability. PLoS ONE 8(12): e82714. doi:10.1371/journal.pone.0082714
[4]  D’Odorico, P., J. A. Carr, F. Laio, L. Ridolfi, and S. Vandoni (2014), Feeding humanity through global food trade, Earth’s Future, 2, 458–469, doi:10.1002/2014EF000250.
[5] Clapp, J. Distant Agricultural Landscapes, Sustain Sci (2015) 10:305-316
[6] Thomas Kastner, Karl-Heinz Erb nd Helmut Haberl 2014 Rapid growth in agricultural trade: effects on global area efficiency and the role of management, Environ. Res. Lett. 9 (2014) 034015 (10pp)
[7] Wilk, R. 1998, Taking Political Ecology Global, Indiana University.

Tuesday, May 17, 2016

Back soon...

Hi, I have been quite busy lately with a consultancy in Mongolia, a job with the Sami in the North of Sweden, editing the Swedish version of Global Eating Disorder, spring work in our farm and last but not least a project to restore a pasture along the shore of the lake. First step of that is clearing the bush and forest that has encroached the land since it was grazed some fifty years ago.Two weeks ago we had thirty friends helping us,  but there is a lot more to do before we can start fencing. 
Burning shrubs for making pasture

Plants waiting for summer
I plan to continue blogging on the trade theme in a week or two, or three....

Monday, April 4, 2016

Food: Trading away our future? - Part I



We may not always think about it, but the origin of trade is found in ecology and not in economy. The merchant was an ecological plumber moving supplies from an area of surplus to one of shortage, greasing the cogs of ecology as well as human society. Trade made it possible for human beings to establish themselves even where some basic resource was absent. One tribe had access to a resource that the other was missing. In some places flint or obsidian was abundant, and in other places hunters had no access to those stones for making spears and arrows. In other areas there was no salt, which was important for preserving meat and curing skins. In some rare cases this situation might have led to war, but more often it led to peaceful exchange.

The role of trade in ecological adaptation has, in some cases, meant that communities have been able to specialize in forms of production that are very well adapted to their ecological context. Through trade with the plains, the peasants of the Alps could shift entirely to pasturing livestock thus avoiding the need to plow fragile mountain slopes while their Mediterranean colleagues occupied themselves with viticulture and olives. In this way, trade in agricultural produce, even staple food such as grain, promoted sustainability, long before the term was coined.[i]

But how is it today? I will explore the status and implications of global food trade in (I believe) four posts. This first one gives an overview of

the actual status of global trade in food. The second on its implications on diets, environment, water, land use, carbon emissions. Thirdly, I will discuss it from the perspective of the agriculture producer in exporting and importing countries, and finally, I will discuss the drivers, which changes are either caused by internal mechanisms or external conditions and what developments would be desirable.

Global food production increased with over 50% between 1986 and 2009. Meanwhile the trade in food for direct human consumption has increased from 15% of total production in 1986 to 23% in 2009, thus about one fourth of food production is traded. Half of the net exports 2010 were originating from just five countries, USA (17%), Brazil (9.9%), Argentina (8.5%), Indonesia (5.9%) and France (5.9%).[ii] At the global level, land for export production grew rapidly by about 100 million hectares between 1986 and 2009, while land supplying crops for direct domestic use remained virtually unchanged.[iii] Production of commercial agricultural commodities for domestic and foreign markets is increasingly driving land clearing in tropical regions. Henders et al (2015) show that in the period 2000–2011, the production of beef, soybeans, palm oil, and wood products in Argentina, Bolivia, Brazil, Paraguay, Indonesia, Malaysia, and Papua New Guinea was responsible for 40% of total tropical deforestation.[iv] At the same time large tracts of land is left idle or used for development in the advanced economies.[v]

Rich countries are increasingly using land in other regions for their food production. The UK is currently importing over 50% of its food and feed, and 70% of the associated cropland is located abroad. Between 1986 and 2009 the global cropland footprint associated with the UK food and feed supply increased by 2022 kha (+23%).[vi] Of course, you have to afford food in order to buy it in international markets; the average per capita GDP in countries that achieve sufficient food supply by imports was approximately tenfold compared to countries with insufficient food supply and production.[vii]

Mostly, international trade flow from high-yield to low-yield regions: For that reason, one can argue that trade lowered global cropland demand by almost 90 million hectares according to a study by Thomas Kastner, Karl-Heinz Erb and Helmut Haberl (2014). However, area-efficiency gains through trade do not imply that international trade reduces total global land demand. For instance, if trade reduces price levels, consumption of agricultural products will increase, especially for products with elastic demand.[viii] Clearly this is what has happened with the rapid increase of trade in poultry meat, palm oil and soybean meal.

Trade fills an important role for moving produce from areas with excess to areas with deficit. In 1965 insufficient domestic production normally meant insufficient food supply, but in recent years the deficit has been increasingly compensated by rising food imports.[ix] There are, however, many meachnisms in trade which leads countries not to produce food even if they could do so. Europe has let almost 100 million hectares of farm land revert to forest or lying idle, while European farmers buy protein rich feedstuffs from developing countries and European food industries buy palm oil from Malaysia and Indonesia. Europe could produce those within its own territory.[x]

Many assume that exports goes from countries with relatively more efficient production than importing nations, including land use, water use, and nutrient use. However, Macdonald et al (2015) suggest that higher resource endowments in some major exporting countries may facilitate land- or water-intensive exports despite lower efficiency. Research on embodied water trade demonstrates many examples in which trade occurs despite relative disadvantages.[xi]  In many countries agricultural production and trade patterns are driven by other factors than availability or water and land resources. In some cases scarcity of resources can even be intensified by the production of agricultural products for export. There are some countries which rely on food imports due to land and water constraints on domestic food production, but many countries import a lot without having particular resource constraints. For example, in Mexico, per capita freshwater and land resources are still quite abundant despite the rapid population growth. Yet, in recent years it has become a high net importer of food, with over 1800 kcal/capita/day imported in 2005. [xii] Partly this is because Mexico imports high calorie commodities such as maize, soybeans and wheat and export high-value vegetables. Despite this, Mexico is a net importer also calculated in values; see graph.
Three quarters of the global food trade is with crops which are grown both in the exporting and importing countries, i.e. only a quarter of the trade is with crops which could not be grown in the importing country, e.g. coffee imports to Europe and United States.[xiii] Sometimes very similar products are exchanged between countries, e.g. bottled lager beer can be both imported and exported from the same country. Sometimes there are some differences in quality between the imported and the exported goods. For example, the United States imports land-intensive pasture-grazed beef from Australia but simultaneously exports predominantly grain-fed beef to other countries.[xiv] Sweden both import and export wheat, normally it imports lower quality and imports higher quality. In many cases it is just the price which determines if a product will be traded or not.



[i]  This introduction is extracted from my book Global Eating Disorder, which discuss food trade extensively. The data in this post are however even more recent and was nbot part of the research for the book.    
[ii]  D’Odorico, P., J. A. Carr, F. Laio, L. Ridolfi, and S. Vandoni (2014), Feeding humanity through global food trade, Earth’s Future, 2, 458–469, doi:10.1002/2014EF000250.
[iii] Thomas Kastner, Karl-Heinz Erb nd Helmut Haberl 2014 Rapid growth in agricultural trade: effects on global area efficiency and the role of management, Environ. Res. Lett. 9 (2014) 034015 (10pp)
[iv] Sabine Henders et al 2015, Trading forests: land-use change and carbon emissions embodied in production and exports of forest-risk commodities, Environ. Res. Lett. 10 (2015)
[v] Rundgren, G 2014, Global Eating Disorder.
[vi] de Ruiter H, Macdiarmid JI, Matthews RB, Kastner T, Smith P. 2016 Global cropland and greenhouse gas impacts of UK food supply are increasingly located overseas. J. R. Soc.  Interface 13: 20151001. http://dx.doi.org/10.1098/rsif.2015.1001
[vii] Porkka M, Kummu M, Siebert S, Varis O (2013) From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability. PLoS ONE 8(12): e82714. doi:10.1371/journal.pone.0082714
[viii] Thomas Kastner, Karl-Heinz Erb nd Helmut Haberl 2014 Rapid growth in agricultural trade: effects on global area efficiency and the role of management, Environ. Res. Lett. 9 (2014) 034015 (10pp)
[ix] Porkka M, Kummu M, Siebert S, Varis O (2013) From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability. PLoS ONE 8(12): e82714. doi:10.1371/journal.pone.0082714
[x] Rundgren, G 2014, Global Eating Disorder.
[xi] Graham K. Macdonald et al 2015, Rethinking Agricultural Trade Relationships in an Era of Globalization http://bioscience.oxfordjournals.org
[xii] Porkka M, Kummu M, Siebert S, Varis O (2013) From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability. PLoS ONE 8(12): e82714. doi:10.1371/journal.pone.0082714
[xiii] Thomas Kastner, Karl-Heinz Erb nd Helmut Haberl 2014 Rapid growth in agricultural trade: effects on global area efficiency and the role of management, Environ. Res. Lett. 9 (2014) 034015 (10pp)
[xiv] Graham K. Macdonald et al 2015, Rethinking Agricultural Trade Relationships in an Era of Globalization http://bioscience.oxfordjournals.org

Friday, March 18, 2016

The global plate

How much food is actually produced and how much is consumed?
Below there is an extract from Global Eating Disorder, which explains it all.
 
From farm to table
Note
kcal/per capita/day
Gross crop production per capita

+5600
Used as seed
1
-130
Waste on farm & post-harvest
2
-560
Used as feed
3
-1543
From livestock products
4
+510
Biofuel
5
-480
Other industrial uses
6
-200
Waste in food processing
7
-400
Food from other sources

+50
Total food available

2,847
Sources:
1. Calculated from FAOSTAT data for the main 20 crops + 10%for the rest of the corps.
2. Based on FAO (2001), Global Food Losses and Food Waste, probably an overestimate.
3. Calculated from FAOSTAT data for the main 20 crops + 20%of the rest of the crops.
4. FAOSTAT. Some of this is from grazing and some comes from cultivated feed.
5. Calculated from United States Energy Information Administration (EIA) data on amounts of biofuel produced and the raw materials used. No calories are counted for the feed value of residual products as they come into the food system via livestock products.
6. Guesstimate, bio-plastics, starch, medicines, cosmetics and fiber.
7. Based on FAO (2011), Global Food Losses and Food Waste.
8. Wild fish, game and other wild collection. Own estimate and FAOSTAT

This coincides more or less with FAO data on food availability 2009. The figure is an average for all individuals on the planet, including children and the elderly. Small children don’t eat much and old people also eat considerably less. By and large, even with a wastage rate of ten percent, there is more than enough food to feed the global population, if it was evenly distributed. Which it is not. But if food were evenly distributed, what would the global menu look like? The table below gives an idea. People consume some 1.8 kg of food per day (675kg per year). Looking at calories in our food, 46% came from cereals (with rice and wheat contributing 19% each), 18% from animal products, 10% from vegetable oils, 8% from sugar, 5% from root crops, 3% respec­tively from vegetables, fruits and alcoholic beverages and 5% from other (fish & sea food, algae and pulses). In terms of protein and fat, animal products play a much bigger role, contributing 45% of all dietary fat and 39% of all protein.


Global food supply per capita per day 2009

grams
kcal
%kcal
Wheat
181
532
19%
Rice
146
536
19%
Maize
47
141
5%
Cereals, other
28
82
3%
Starchy roots (potatoes, cassava etc.)
167
136
5%
Sugar and sweeteners
64
224
8%
Beans and peas
18
62
2%
Soybeans and groundnuts
20
56
2%
Vegetable oils
32
277
10%
Vegetables
361
87
3%
Fruits
200
92
3%
Alcoholic beverages
98
67
2%
Meat
115
230
8%
Animal fats
9
60
2%
Milk
239
134
5%
Fish, seafood
51
33
1%
Other
82
100
3%
Total
1,857
2,849
100%
Source: FAOSTAT,

To make this more vivid let’s try to make a day’s diet out of it. Perhaps it would look like this:
  • For breakfast you drink tea or coffee with sugar, eat three slices of bread (or cereal based porridge) upon which you use a vegetable oil based margarine and a sweet fruit-based condiment.
  • For lunch you eat tortillas, and two potatoes (or yams, cassava or sweet potatoes), with tomatoes and onions fried in vegetable oil. Once a week you also have a fish.
  • For dinner you eat boiled rice with a stew of beans, cabbage and a small piece of meat. You round off with a banana, an apple, an orange or half a mango.
  • In the evening you drink a very small soda or a beer and snack on roasted groundnuts or soybeans.
But the average food supply varies greatly geographically. The food supply per Indian is 2,321 kcal while it is 3,688 for the average Ameri­can. The average Indian gets almost two thirds of their calories from cereals, pulses and root crops while these crops only contribute a quarter of the calories of the American. Sugar and fats contribute almost 40% of the American’s calories but just 21% of the Indian’s. Animal products, including fish, make up 28% of the calorie supply of an American but only 9% for the average Indian. Clearly, the agriculture systems that produce those two diets are very different and the ecological footprints of the diets are also very different.