< Digest Paper - The real cost of cheap food

I’ve been a dairy farmer now for approaching 30 years and I’ve been lucky enough to spend the last 20 years in the regular company of grazers. It’s been a great place to be, always optimistic, positive and arguably one of the most progressive sectors of agriculture. Very rarely in a grazing discussion group would you ever hear poor milk price, the weather or the cost of concentrates blamed for low levels of profitability. Grazers’ instead believed the route to profitability was well within their control. Around 4 years ago I was talked into taking on the role of County chairman for the NFU.

Always ready for a challenge I accepted, and blindly with little prior experience of industry politics, took on the job for the standard two year term. Becoming the farmers’ spokesman in the county was really quite a reality shock as being an office holder in the NFU can at times be very negative, and not what I’d become used to.

Fairtrade

During my period as county chairman one of the many invitations I received was by a group of predominately Fairtrade campaigners in the county to help organise a local conference that would examine the merits and possibilities of marketing local produce along similar principles to Fairtrade and the concept of ‘Local and Fair’. This was to be the beginning of an extraordinary journey for me as part of the conference planning was to involve a farmer exchange between a Cumbrian dairy farmer and a St Lucian banana farmer. This was a great experience, seeing firsthand how Fairtrade worked for the farmers and their communities in St Lucia but also seeing how important working together collectively as farmers meant Fairtrade was ensuring their survival. The Fairtrade system is enabling something to work economically that otherwise, left to market economics, simply wouldn’t.

But we as consumers decide to make it work. It’s our conscious decision to choose a Fairtrade product that’s often directly alongside an almost identical one. We’re not just buying the banana, we’re happily buying the story that goes with it. Arriving back at Heathrow following 10 days in the Caribbean, the prospect of more travel via an appealing Nuffield Farming Scholarship was to become

my next challenge.

Nuffield Study

My proposed study to the Nuffield Board was ‘Solutions to combat food chain dysfunctionality’ exploring how other countries around the world both value and add value to primary food production, of course a huge subject. I’d become increasingly concerned by the grotesque amount of food that’s wasted in our country and the huge amount we’ve seen food devalued during just my lifetime. Food has become cheap and less of an issue for the modern consumer and as such is no longer valued as it once was.

With this in mind I wanted to get a clear understanding of the world’s ability to sustain its rising population and also understand the implications of in the region of 2.5 billion Asian consumers fast tracking towards our wasteful and excessive western lifestyle. At this point in time, we in Europe are living off the equivalent resource of 2–3 planets while in America it’s even worse where they’re consuming as if we had 3–4 worlds to go at. So how realistic is it for the world to produce even more food? Or is it even realistic at all?

I would consider myself to be a relatively optimistic person and if I look back a couple of years pre-travel would have been more a sceptic of man-induced climate change than a believer with little if any concern about resource depletion or food security, subscribing to the theory that when we need to we’ll overcome the obstacles and the world will somehow produce more and more food without really considering the consequences of doing so.

Other than dairy farming I had little knowledge of other food chains or production systems. One of the biggest shocks I got in St Lucia while studying Fairtrade and witnessing the banana harvest, was that at least 10% of the fruit was dropping to the ground, apparently not meeting our exacting perfect standards so not worthy of collection. If you also add in the other 10% that’s wasted during the shipping and ripening process that’s 20% already dumped before it even gets to the retailer! And then we manage bin a further 30% after purchase, so that’s 50% of the banana crop, many millions of tonnes that never gets consumed and not because it’s of poor quality or uneatable but because it’s perceived as cheap, plentiful and of little value.

So then I started considering how I would feel if half the milk I produced every day was never consumed? But the reality is that between 30 and 50% of the milk that leaves our farms is never consumed. It’s either wasted during processing and packaging, or by the retailer or it just sits in the fridge for too long and is binned by the consumer when it goes out of date. How and why have has our society become so wasteful? It’s because food is perceived as cheap, plentiful and of little value. So as 2.5 billion Asian consumer’s fast track towards our western life style, is the solution to feeding 9 or even 10 billion people really about the world producing more food?

The future

Is it not time we start looking at how our current food system works and learn to understand more clearly how industrialised farming has helped facilitate the devaluation of food, how modern agriculture is using and abusing the world’s resource base, producing and delivering food in a way that completely ignores the numerous associated external costs ranging from the environment to public health. I was told Nuffield would change me, I left for my Nuffield travels a dairy farmer from the North of England and somewhat unexpectedly returned an environmentalist!

During my scholarship I travelled to China, India, NZ, South America and California and in around 10 weeks believe I got a reasonable snap shot of the challenges and opportunities that face global agriculture. From my travels and studies I’ve concluded that far from being able to massively increase levels of global food production, several factors actually threaten our ability to even sustain the world’s current level of food production.

Firstly, resource depletion, and top of the list is water. 40% of the world’s food production is dependant upon crop irrigation. Globally we’ve become extremely good at irrigation, tripling the area to 300 million ha in the last 60 years. Vast areas of the world are now highly productive simply because of the availability of water. The problem is we’re now using our water resource faster than nature can replace it in many parts of the world. It’s currently estimated that 18 countries around the world are over pumping their ground water reserves. These countries include America, China and India and are responsible for half of the world’s population. The vast majority of this ground water is being pumped for crop irrigation. California, responsible for 20% of America’s dairy output and where half of the vegetables, fruit and nuts that America produces are grown, is highly dependant on water. 9 million acres are irrigated in the central valley and a combination of increasing population and climate change is seeing an increasing amount of the water sourced from the ground. 1/3 rd of California’s water is from the ground, 800 billion gallons every year at abstraction rates much faster than ground water recharge. 2013 was the driest year in the central valley since recording began 160 years ago, 85% of California is now in a severe drought situation and now (winter) is their wettest time of year. The state water authority is only guaranteeing 5% of the requested water supply for the coming year, how will this impact on world food supply?

India has tripled its grain production in the last half century. The green revolution, with the help of 27 million tube wells drawing water from the ground, now sees water tables falling consistently across the country. The World Bank estimates that India is already producing 15% of its food with an unsustainable water source and this while adding 15 million to its population every year. For many Indians, of course, the severity is invisible until the wells dry up. India needs to find 23% more food if it’s going to adequately feed its people as the population peaks at an estimated 1.7 billion, but where will it come from?

China has 20% of the world’s people and only 7% of the world’s fresh water and 10% of the cultivatable land. China is desperately short of water, needing 25% more by 2030 and is undertaking the world’s largest engineering project to move water from the relatively moist south (with 80% of China’s available water) to the increasingly dry north. 45 billion cubic meters of water will flow annually, transferred from the Yangtze river in the South to the Yellow river in the north in an attempt to alleviate the growing crisis that’s seen subsidence in over 30 cities and the water table below Beijing fall over 1000 feet in the last 40 years. The problem is that most of the water which is available to be moved is so polluted it is not even fit for irrigation.

Climate

Much, but not all of the global water crisis is due to the changing climate, every country I visited during my travels was experiencing climate change, but it’s not the gradual change in global temperature that causes the problems for agriculture, it’s the unpredictability and severity of the weather events that’s seeing food production being dislocated around the globe. Flooding and droughts are much more common than in the past. In 2012, the year I started my travels, China was experiencing its worst period of drought for over 50 years, New Zealand was the driest for 70 years and the USA was the driest for over 25 years (which has now become the driest since records began 160 years ago). San Francisco and Los Angeles received less than 25% of their expected rainfall in 2013 in the same year that we suffered the second wettest year recorded in the last 100 years. How productive was your farm in 2012?

Land is our most precious resource as farmers and food producers. If the estimates are to be believed the amount that we’re losing productive land around the globe is staggering. At least 1% or 600,000 ha of the world’s productive land is being lost annually, simply due to urbanisation. This is nowhere more apparent than in China where on average 300,000 ha per year has been lost during the past 30 years due to a combination of development, erosion and desertification which has dramatically reduced China’s ability to feed itself in the future. Some of China’s best land is now under concrete and asphalt.

That deals with some of the challenges on the supply side but what about the challenges on the demand side? During the past couple of generations there’s been considerable change in our diets. In the relentless drive for food to become cheaper and more available, food has been commoditised, production methods have changed and food has lost it’s seasonality as we’ve increasingly brought in food from all over the globe to satisfy our needs – food which is often grown from irrigation in some of the most water stressed countries on the planet. 25% of all the trucks on our roads are delivering food to supermarkets, many of which are only half full. We now have over 40,000 different product lines in the average supermarket and are channelling a staggering 85% of our food expenditure through just 5 retailers, making them immensely powerful. We’ve been conditioned to source, eat and waste food in a very different way to past generations. We now import over 40% of our food into the UK, seeking greater choice and value, little consideration has been given to production methods, resource used and external associated costs. A hugely different and highly competitive system of farming has evolved from that of the past, more cereals are now being consumed by animals that would once have relied on grass and home produced forage. These systems look reasonably efficient on the surface, but when you consider that now around half of the world’s grain harvest goes down the throat of an animal it’s actually an incredibly inefficient way of feeding people in terms of the calories, water and fossil fuels used compared to calories produced and consumed by humans.

So where does this leave our livestock industry in the UK?

Firstly, we as producers and consumers need to realise that we’re in an increasingly volatile global food system and also that significant and major change is highly likely as combining factors accumulate restricting food supply and delivery. As the consumers of Asia, South America, Indonesia, Eastern Europe and even Africa become wealthier and more demanding our ability to, and reliance upon, importing cheap food from wherever it can be sourced will be challenged. The challenge isn’t merely down to more people at the table, but as a result of several converging factors not least of which is because we’ve limited or even destroyed our ability to produce food in many areas of the world. We almost need cultural change and perhaps it’s time consumers understood the true cost of what is currently perceived as cheap and limitless food. For example if all the external costs and benefits of a food or food product were calculated and displayed consumers could make buying decisions based on the information provided. This could include carbon foot print information, virtual water use and could also include the cost of removing harmful Nitrates from drinking water, the effects of greenhouse gas production and the loss of biodiversity in our soils, but it’s important to also understand it’s not all negative, where farming systems are delivering benefits back into ecosystems these should also be quantifiable.

Health costs

One huge cost that’s already beginning to impact all of us is the huge public health costs associated with obesity, heart disease and diabetes linked to cheap processed food and lifestyle. The globalcost of dealing with obesity and the related health conditions is going to be simply massive, very few people drop dead from over eating, usually they die prematurely having cost the national health authority a fortune. Current estimates are that the costs of treating and dealing with the associated health cost of poor diet combined with the economic losses are likely to be in the region of $30 trillion over the next 20 years and to put that into context the total inclusive global health care spend at the moment is between $6–7 trillion or 10% of GDP.

I do feel we have an enormous opportunity as UK farmers, every time I returned from travel I was reminded how suitable our climate is for simple pasture based livestock systems. It seems ridiculous to me so much of our dairy and livestock sectors have been tempted away from what is the ultimate in sustainability, grass.

Conclusion

The global food system is under severe pressure due to several converging factors, many of which are largely out of our control.

Population growth is a contributing factor but it’s urbanisation at an alarming rate that will have the most significant effect on the status quo, not least because of the competition for the available water.

Climate change is real, but we have very few reliable predictions about the effects of a warming planet in terms of overall food production, it’s likely to be limiting and will continue to dislocate food production around the globe. The vast global public healthcare costs associated with poor diet and lifestyle are today simply unaffordable to the world’s fragile economy, so expect an alternative and preventative strategy within our lifetime that will drive cultural change in our diets. Expect consumers to be advised to eat less meat and dairy in the future – courageous, determined leadership allowing, of course.

I believe consumers will, in time, re-engage with local, seasonal and more sustainable food. A growing number of consumers are already making educated, value driven choices when choosing the nutritional value and source of food they eat. In the absence of political will, educated consumers will be the force that drives major change in the food system. It’s inevitable that food will become more expensive in the future as extra demand, limited supply and continued waste feed volatility in commodity markets.

This is our opportunity not our problem.

Robert Craig
Dairy Farmer, Cairnhead Farm, Ainstable, Carlisle, Cumbria, CA4 9RP