The MOF&G Online
No More Cheap Oil
from the MOFGA Spring Growth 2005 Conference:
Local and Organic in a Global Food Economy:
What is Our Role--As Farmers, Consumers and Citizens?
Fred Kirschenmann addressed four of 10 challenges that the Leopold Center has identified that "will profoundly affect agriculture over the next 15 to 25 years or less." They are fossil fuel depletion; environmental degradation; climate change; and a bankrupt farm economy.
"The day of cheap oil is over," said Kirschenmann. "Not that we're going to run out of oil; the issue is one of efficiency." Marty Bender of the Land Institute, said Kirschenmann, studied how many units of energy are reaped per unit of energy invested and found that in the 1940s, when oil was easy to get, a little over 100 units came from every unit invested. In the 1980s, the number was twelve. "Oil is no longer available to us in an efficient way," said Kirschenmann. "We will reach the point where we're 'perpetually out of gas,' especially with China coming on line. "
A March 7, 2005, USA Today article said that airlines anticipated $60/barrel oil by the summer of 2005; and a speaker at a North Dakota Soy Growers' meeting predicted $90/barrel by the end of 2006 and advised growers to stock up on oil immediately. Kirschenmann pointed out that industrial agriculture's fertilizer, pesticides, irrigation pumps, diesel fuel and other inputs are all based on fossil fuel.
In Culture and Agriculture (Wachusky, 1989), Wachusky noted that the hunter-gatherers of the Paleolithic era were enormously efficient, reaping about 20 calories of food energy for every calorie invested in getting food. Around 8,000 B.C., at the beginning of the Neolothic Era, plants and animals were domesticated, and 10 calories were gained per calorie invested. Around 1850, we began using fossil fuels-resources from outside the farming system-to fuel the system, so that 1 calorie of food required an input of 10 calories: "an embarrassment to human intelligence," says Wachusky, adding that this "Neocaloric Era" would be short because it depends on "old" calories stored in nature over a long time. He asks, "What's the next era?"
"This is an interesting question," says Kirschenmann, "because so many of us get stuck in the system we're in. As people talk about the end of fossil fuels, we get nervous but try not to think about it, because we can't imagine we were stuck in a very short era in the way humans get their food. Now we have to get beyond that."
A November 7, 2004, article by Anne Fitzgerald in the Des Moines Sunday Register pointed out that although farmers had record corn and soy yields last year, fuel prices were soaring, and farmers and grain handlers were spending about 20% more than they had a year before to dry corn. Fertilizing and transporting the crop cost more. "Farmers couldn't find [fertilizer] dealers to lock prices in last fall, because dealers had no idea where prices would be in the spring," Kirschenmann noted. Also, because yields were up, prices for crops were down.
"So what kind of agriculture will be able to maintain and increase its productivity in a post fossil fuel era? Nothing looks very promising with regard to energy efficiency." Wind and hydroelectric look the most promising but will not return us to the days of readily available fossil fuels. Conservation gives the most bang for the buck. So, "what kind of agriculture thrives on energy efficiency?" Kirschenmann asked. "That looks like the most promising approach."
According to Nancy Rabalais of Louisiana State University, the "Dead Zone" in the Gulf of Mexico (where ocean life has been killed by agricultural runoff) is now about 9,000 square miles, or about the size of New Jersey. Shrimpers in Louisiana are telling farmers in the North that they can no longer pollute the Gulf and are rumored to be considering a legal injunction against northern farmers to stop the flow of nutrients downstream. Hypoxia (low oxygen) in the Gulf of Mexico symbolizes the environmental degradation caused by industrial agriculture.
Cimate swings are wilder, and in the Midwest, agricultural crops are stressed due to hotter, drier weather. Minnesota experienced one tornado in 1950 and 74 in 2001. Although the number of tornadoes varies, the trend seems upward. The 10 costliest storms on record have occurred in the past 10 years. Scientists aren't surprised that a warmer environment is creating more extreme weather, Kirschenmann concluded.
Devastated Farm Economy
Gross farm income (which includes government subsidies) has been about steady, but almost all of that income is spent to produce crops, so net income is falling and is actually lower than it was in 1929, said Kirschenmann. Without the government subsidy, the situation is much worse.
In the mid-'80s, the farm "crisis" hit--but this is a perpetual crisis, said Kirschenmann. In 1994, government payments were about 143% of net farm income; i.e., net farm income would have been negative without government subsidies. "This is a description of a failed system. We're bailing farmers out with public tax dollars simply to try to keep farmers in business."
The result is "the declining middle." (See table.) "If you're looking at a farm that's relatively independent-i.e., where the majority of the income is made on the farm-you've got to go up to at least $50,000 gross sales or more," Kirschenmann believes. "The greatest support for community, and food produced with the most care, comes in those categories where we're losing the farmers. Mega-farms have a different management style. In Iowa, 90% of their land is rented, not owned. This is not an investment you want to pass on to your grandchildren."
The Declining Middle--Percent Change in Iowa Farms Based on Sales, 1997 to 2002
< $5,000 +24%
$5,000 to $25,000 -15%
$25,000 to $49,999 -15%
$50,000 to $99,999 -18%
$100,000 to $499,999 -19%
> $500,000 +17%
In 1974, the USDA defined a farm as one with gross sales of $1,000 or more. Accounting for inflation, that should be $10,000 now, said Kirschenmann. But even more onerous, the USDA also includes about 25% of the farms that don't have $1,000 in gross sales, "but only have the potential for $1,000 gross sales, because they still want to claim we have 2.1 million farms. In Maine, 37% of farms being counted do not have $1,000 gross sales; they only have the potential for $1,000 gross sales."
So most of the U.S. food is produced by a very small number of farms:
Type of farm No. farms & % of food produced, 1997 No. farms & % of food produced, 2002
Very large corporate farms, family proprietorships 163,000 (61%) 70,650 (61%)
Family -sized farms 575,000 (30%) 381,225 (33%)
Low production, residential, retirement farms 1,300,000 (9%) 1,677,15 (7%)
This "declining middle" is occurring more in such farms states as Iowa, Michigan and Illinois.
Another concern is the aging of the farm population. "When you get into your 60s, you're not looking into making major changes in your life. Where will innovation come from? Probably the next generation of farmers. But now it's very difficult for them to get in. To compete in corn and soy in Iowa, you need at least 1000 acres at $4,000/acre. You need a combine, tractor, planter… then you have no return on your investment. You're never able to pay off" your debt. "So there's no way to get in. At any given time, there are about 200 students at Iowa State who would love to farm, but there's no way they can-even when their family owns the farm, because after 50 years of the kind of net income we've seen, retiring farmers are depending on farm assets to fund their retirement. They can't pass it on."
What Will Post-Modern Farms Look Like?
In Structure and Function in Agroecosystem Design and Management (CRC Press, 2001), Masae Shiyomi and Hiroshi Koisumi ask, "Is it possible to replace current technologies based on fossil energy with proper interactions operating between crop/livestock and other organisms to enhance agricultural production?" Kirschenmann called this "one of the most interesting questions that we could possibly ask about the future of agriculture. They go on to say, 'If the answer is yes, then modern agriculture, which uses only the simplest biotic responses, can be transformed into an alternative system of agriculture, in which the use of complex biotic interactions becomes the key technology.' I'm trying to convince my colleagues at Land Grant universities that this is where we should be spending research money."
Nature is the laboratory for such study. Kirschenmann noted a study publicized by Carol Yoon in The New York Times on July 24, 1994, about a "chemical laxative in the cherry-sized fruit of a Costa Rican shrub. The drug appears to act on the bowels of the birds, to the plant's and not the birds' advantage." The birds defecate just far enough away that the orchards continue to spread, but not so far away that trees are growing outside of this ecosystem.
Likewise, a 1997 article by S. W. Simord et al. in Nature (388) showed that photosynthates from healthy forest trees growing in full sunlight travel across mycorrhizal fungal 'bridges,' root to root, arriving eventually at shaded, weaker trees-even of differing species-and bolstering their impoverished nutrition. And a 1998 article by T. Helgason et al. in Nature (394) noted that mycorrhizal bridges don't stop at the edge of the forest but move about 60 km into the field. However, "…in intensively farmed fields in the same region where such nutrient webs exist in nature, such fungal diversity is dramatically reduced, probably due, 'not strictly to monoculture per se,' but to a combination of 'ploughing, fertilization and fungicide application.'"
So what else are we missing? asked Kirschenmann. "What else is there that we could employ in an agriculture that doesn't depend on fossil fuels?"
To prepare for the agriculture of the future, he believes we must:
1. explore new systems that produce more food on less land by relying on multi-species synergies instead of exogenous inputs;
2. develop new market opportunities that enable farmers to produce more value and retain more of that value on the farm;
3. develop public policies that help farmers transition to these new production and marketing systems.
Production Systems-Yesterday's Wisdom, Today's Science
Kirschenmann's favorite postmodern farmer is Takao Furuno, who farms about 6 acres in southern Japan-one of the larger farms there. Furuno was a typical, industrial rice farmer until 1987, when one day he realized that everything he earned had to be put back into the farm to produce the following year's crop. So he just stopped and came up with a set of principles by looking at the wisdom of past farmers, before the industrial agricultural era, and marrying lessons from the past with the best science available.
Furuno learned that farmers used to raise ducks in rice paddies in Japan, so he put ducks in a fenced area in his paddy, then sat back and watched. The ducks ate the insects off the rice plants. Modern science told him that a wild drake x domesticated female is the most efficient grazer. Two hundred ducks per hectare took care of all his insects, so he no longer needed to buy insecticides. Furuno also discovered that as the ducks grew, they would dive and feed on the golden snails that attack the roots of rice.
He added fish to this system, as farmers did in the past, and found that ducks and fish were compatible. The cloudy water kept the ducks from eating the fish. Also, the aquatic fern Azolla, a "weed" that grew on the surface of the rice paddy and choked off rice plants, was previously killed with herbicides. But the ducks and fish ate enough Azolla to keep it from harming the rice-and Azolla associates with a nitrogen-fixing cyanobacterium, so the fixed N combined with the droppings from the ducks and fish fertilized the rice.
"So instead of being a rice farmer, he's a farmer who produces duck meat, duck eggs, fish meat, and fruit trees (figs) on the perimeter of his paddy (which is possible because he's no longer using herbicides). He's reduced expenses and increased income. Then his rice yields increased by 50 percent!"
Furuno, describing his system in The Power of Duck (2001), says that the core principle of his farming system "is to produce a variety of products within a limited space to achieve maximum overall productivity. But this does not consist of merely assembling all of the components; it consists of allowing all components to influence each other positively in a relationship of symbiotic production."
"This is the kind of agriculture we need," said Kirschenmann, "given all the challenges that are facing us. Interestingly enough, much of the wisdom and ideas we need for the future are in the past." He quoted Rudolph Steiner (Agriculture, 1924): "…within our farms, we should attempt to have everything we need for agricultural production, including, of course, the appropriate amount of livestock. From the perspective of an ideal farm, any fertilizers and so forth that are brought in from outside would indeed have to be regarded as remedies for a sickened farm. A healthy farm would be one that could produce everything it needs from within itself."
Kirschenmann thinks that livestock might not be necessary, because "we do have very creative farmers now doing it without the kind of livestock you normally think of; they're doing it with livestock like earthworms, etc."
Marketing Memory, Romance and Trust
The food market has shifted dramatically in the last 30 years. In 1972, about 63% of the food market was in retail and 37% in food service (restaurants, health care institutions, schools, penal institutions, etc.). By 2003, the split was about 50:50. "Food service is capturing a much larger section of the market."
Kirschenmann noted that most items in grocery stores are made from corn, soy and sugar, which can be grown in many places in the world. But most food service products are much more diverse, with over 100 flour varieties used for breads, pastas, desserts, etc., for example. "Who will provide this diversity?" he asked. "Farmers in the middle…and we're losing them."
Rick Schnieders, chairman and CEO of SYSCO Corporation, has said that keeping these farmers in business is now his company's top priority. Sixty-three percent of SYSCO's business is restaurants, and half the chefs are asking SYSCO for foods that are highly differentiated in three ways: memory, romance and trust. "I thought," said Kirschenmann, "whatever happened to fast, convenient and cheap? But that's what everyone tells us we need to do to be competitive."
Schnieders says that a major part of our food system is still based on fast, convenient and cheap, and that's mostly in retail, but even that is changing. People are increasingly demanding the memory of good taste; a good story of a farm that's a good environmental steward and a real farm family; and a transparent system that enables customers to get back to the farmer they're supporting, either through direct marketing (the ideal) or some virtual arrangement, such as getting to know farm families through the Internet. "Organic Valley is doing a good job of this," Kirschenmann pointed out. "They introduce consumers to farm families that are milking the cows that are producing the milk that is on your breakfast table."
Michael Porter of Harvard Business School has written about markets of the future in a global environment. He now says two ways exist to compete in a global economy: Be the lowest-cost supplier of an undifferentiated product; or produce a product of higher value-because of the quality of the product, the attributes that come with the product or the service that comes with it. He adds that one firm has great difficulty doing both. For example, Cargill would have difficulty suddenly producing differentiated products with real farm families, because its way of doing business in the marketplace doesn't support such a model. But, Kirschenmann said, "it's going to be very easy to do for groups like this," i.e., MOFGA and its conference participants.
Research in eight Midwestern states by the University of Nebraska ranked the following in importance when 500 consumers selected brands or products, beginning with most important:
1. Taste-98% said this was extremely or very important
3. Nutritious and healthy-89%
5. Supports local farmer-71%
6. Locally grown/produced-69%
7. Environmentally friendly-66%
8. Made by small, local company-62%
9. Produce is state grown-61%
10. All-natural food-51%
11. Local store brand/label-48%
"These are all part of the food story," said Kirschenmann. "Memory, romance and trust-This is what's going to drive the market."
He quoted Wendell Berry's 1990 essay, "Nature as Measure": "…If agriculture is to remain productive it must preserve the land, and the fertility and ecological health of the land; the land, that is, must be used well. A further requirement, therefore, is that if the land is to be used well, the people who use it must know it well, must be highly motivated to use it well, must know how to use it well, must have time to use it well, and must be able to afford to use it well."
Kirschenmann concluded with a quote by Mike Hamm, C.S. Mott Distinguished Professor of Sustainable Agriculture at Michigan State University: "Personally, I would like a food system in which I know where a significant percent of my food comes from. I would like a food system in which the production, processing, distribution and waste handling were done in an environmentally sensitive manner. I would like a food system in which the democratic principles under which this nation was founded are made stronger and not weakened through consolidation and monopolization. I would like a food system in which the farmers who grow our food are honored as heroes and not marginalized as commodity producers. I would like a food system in which every consumer and person working in the food system has the opportunity to reach their potential and is not limited by less than living wage jobs, poor nutrition and substandard education. I would like a food system in which food is a right and working honestly is a responsibility."
If that's what we want, said Kirschenmann, we can have it, if we work together to achieve it.
Questions and Challenges Remain
One conference participant pointed out that even by using memory, romance and trust, making a living by farming is very difficult. Kirschenmann said that if we invested the money being spent on the war about oil (not about freedom and democracy) in Iraq in our food system instead, "Where could we be?!" If the Iraq war were really about freedom and democracy, he noted, "there are many more important place we'd be than Iraq." He is also unhappy about where budget cuts are being made to try to tackle the huge U.S. deficit.
Subsidies for U.S. farmers are being affected by the challenge that Brazil is bringing through the World Trade Organization with respect to producing commodities, he added. "I'm told they're not going to stop with commodities; they're going to go for the whole envelope." He predicted, however, that within 10 years, the agricultural subsidy system will "at least look very different than it does now. I hope we continue to invest in farmers who make contributions toward the long-term health of the land. Why should farmers bear the total cost of that? Farmers are stewards of the land for a short time. The land will continue to be here for generations, so we all have an investment to make in that."
When asked how we calculate the cost of food, he pointed out that first, "We do not have the cheapest food in the world. We simply spend less of our disposable income on food than any other nation." In terms of cost per calorie, we're twenty-third on the list. "We do have cheap labor and [a] cheap raw materials policy, so farmers get squeezed, because they must provide both. We also don't figure externalized costs in." Gradually people are becoming aware through education by organizations like MOFGA, he noted.
Asked if subsidies could be switched from commodities to practices, he said that investing in the ecological health of the land is reasonable but asked how such a program would be administered. "The USDA tends to think in monolithic terms, in standardized ways of judging whether farmers are actually providing services that improve the ecological health of the land. But as we know, each ecological community is different. We need much more local control. I envision farmers and wildlife biologists and evolutionary biologists and ecologists sitting down together and asking, how do we best care for the land in this watershed? They come up with designs, report to USDA, and get payments, rather than Washington deciding how to do things in their communities."
Regarding linking health care to potential subsidies, Kirschenmann said that between 1990 and 2000, the United States spent $100 billion on cancer, "and during that same time, all major causes of cancers … increased by 10 to 20 percent. It's the same picture as the farm economy: We're spending more and getting less in return." We wait until people are sick, then intervene with therapy (as in agriculture, we sometimes wait for a disease to appear, then attack it). Such systems are unaffordable. We need a fundamental shift; we need to increase our natural immunities. "This is not rocket science. Many ancient civilizations had robust, healthy populations with no cancer, none of the major diseases that we have. How did the ecology of [those systems] produce healthy human species? Instead of coming up with new, increasingly expensive technologies to solve health problems, some physicians are recognizing this. Food, agriculture and health care professions should address these problems together.
"The future of agriculture-recognizing that the health of our agricultural systems is fundamentally in the soil and in those 2 billion microbes that exist in every teaspoon of soil; if we can find out how to stimulate the health of that community for production agriculture, then in our human population, figure how to increase natural immunities…it's probably connected with similar guys in the soil."
For example, scientists now think that keeping children away from soil lowers their immunity to common pathogens. "The emphasis has been on getting rid of bacteria, but we are simply one expression of microbes finding a home for themselves. Microbes are the primary building blocks of life on this planet. The first 2 billion years, they were the sole occupants. We should keep that in mind! It's in our interest to find our connection with microbes, which builds our natural immunities."
Ending this session, Russell Libby noted that the United States now has more prisoners than farmers…and "about one-quarter of those are probably there for growing things they shouldn't be growing."