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Issue #1687      June 3, 2015

Food under commodified agriculture (Part 1)

Even as hundreds of millions go hungry, food has a low price tag attached to it in the global market. This is because we have externalised many of the costs of producing and consuming it. We let someone else – nature, other people, future generations, taxpayers – foot the bill for climate change, for loss of biodiversity, for eutrophication, for nitrates and pesticides in our groundwater or even for losing the water or the soil altogether. It has become painfully clear that we can no longer afford cheap food.

An unsustainable system

Cheap food allows a growing proportion of the global population to eat meat, fresh vegetables and fruits all year round, something most people could only dream of a few generations back – and something many people in the world can still only dream of. People live longer, are taller and are generally healthier than in the agrarian societies of the 18th and 19th centuries. But the current food system has also produced obesity, allergies and other diseases, and destroyed the environment and devastated farming communities.

Our whole food system contributes at least a third of human-made total greenhouse gas emissions. The extraction of water for irrigation exceeds the regeneration of water sources in many parts of the world. Pesticides cause a major loss of biodiversity and hundreds of thousands of direct deaths among farmers and farm workers. Nobody really knows how they affect other aspects of our health.

The European Nitrogen Assessment concluded that farmers using nitrogen fertilisers create costs for society at large that are on par with the economic benefits for them. European chickens or Chinese pigs are, to a very large extent, fed soy protein from Latin America, much of it from the Cerrado, the Amazon or the Pampa, landscapes which are razed and raped by agribusiness. The extinction of species and the greenhouse gas emissions caused by this are also not included in the price of chicken breast or pulled pork.

That almost a billion people don’t have enough to eat, while even more eat too much and huge quantities of food are simply wasted, also shows that the food and farming system is socially unsustainable. For most farmers in the world, farming is not economically viable. Global competition causes the abandonment of farms even in large parts of Europe where almost a hundred million hectares of farmland has been abandoned in the last 50 years. Rich countries such as Sweden which could be almost self-sufficient in food, import increasing quantities of foods, but even more troubling is that many of the least developed countries have become net importers of food. Sub-Saharan Africa went from a 14% surplus of calories to a 13% deficit in the last 50 years.

Farming has become one of the most capital-intensive businesses. The very successful Danish farms have an average debt of US$1.6 million per farm. In the United States the total farm assets in 2014 amounted to US$3 trillion, corresponding to US$1.2 million per full-time job. Low labour cost is no longer a comparative advantage in crops where production is easily mechanised, such as the main staples.

On the contrary, low prices for staple crops make it impossible for small farms to mechanise production, which is why more than 80 percent of the farmers in sub-Saharan Africa and around half of the farmers in Asia and Latin America still farm manually. Such farmers would have to devote all their monetary income over a whole lifetime to upgrade to ox-ploughing. However, they are still, mostly, (just) above the threshold of survival, which means that they will continue to farm as long as there are no more promising alternatives beyond agriculture.

By and large farmers are stuck on a treadmill. They are forced by competition to increase productivity, and the increased productivity leads to lower prices. Vanguard farms will constantly develop and improve and mostly increase in size, at the expense of their less successful counterparts. Larger farms are not normally more productive per area unit, but they do have lower costs of production. They will establish a new level of costs and prices, each time racking up the notch for the minimum efficiency needed to stay in business. For farmers who cannot participate in this stiff competition, there is no option except to get out. The fact that “people will always need food” is small comfort for the farmer who cannot compete.

Chickens and commodification

A closer look at the major agricultural commodities helps us understand why things are as they are. Chicken consumption increased ten-fold from 1961 to 2009 globally. The past practice of chicken rearing saw small numbers of chickens raised on waste products or seeking their own feed in the farmer’s yard, the thicket or the manure heap – a very popular place for the animals. Chicken meat was relatively scarce and thus expensive in many cultures. Today chicken from broilers in the shape of nuggets, wings or strips are munched 24/7. There is hardly any other food that has increased its market share at such speed in such a short period. Why is that?

A trend analyst would explain that consumer choice is driving this, that consumers prefer white meat to red for health reasons, that chicken is low in fat, that chicken is an international food or that chicken is better for the climate than eating beef. Well, I’m no trend analyst and venture that the main explanation is that chicken has become much cheaper compared to other foodstuffs.

But we can go one step further and ask why chicken has become so much cheaper. In my book Global Eating Disorder, I examine why our food and farming system has developed the way it has and explore the underlying causes. There are three megatrends that have shaped our food system over the last couple of centuries: 1) the commercialisation of the entire food system; 2) the use of energy and applied technology (eg, in the form of machinery or nitrogen fertilisers) to replace animate labour and processes; and 3) demographic changes, such as population growth and urbanisation, and the related lifestyle changes.

These three megatrends are mutually reinforcing. For example, the application of energy and mechanisation in farming, in particular the use of fossil fuels, has increased productivity per agriculture worker by between 50-200 times, which meant that the share of population engaged in farming dropped tremendously. Without fossil fuels, globalisation and massive urbanisation could not have happened. And without urbanisation, there would be little development of markets for agricultural products. Similarly, without commercialisation of farming, there would be little incentive to mechanise and use chemical fertilisers, as both presuppose market-driven farming.

With these mega-drivers as a background, we can discern some factors which have played a major role in the transformation of the luxury that was Sunday chicken into a very cheap food.

Earlier, most farms with animals also produced their own feed. With the large-scale introduction of chemical fertilisers after World War II and improvements in transportation technologies, farms no longer had to integrate animals and crops. With increasing mechanisation, crop farmers could produce much cheaper grain, and later on also soybeans - increasingly grown in monocultures. The grains were sold to specialised livestock farmers, including chicken producers.

Chickens, just like humans, depend on sunlight to produce vitamin D. Therefore chickens would feed on worms and other insects in the yard and would be fed maize when they went back into the chicken house. Once farmers realised they could simply add vitamin D and other vitamins and medications to the chicken feed, they no longer had to let the chickens outdoors. Meanwhile, technology for automatic feeding had been invented. Now, the industrialisation of both broilers and laying hens could proceed apace.

Mechanised slaughtering

Mechanisation of the whole slaughtering process helped to reduce prices and increase volumes. In just over 50 years, the number of chickens produced in the United States increased 14-fold, while the number of farms having chickens dropped from 1.6 million to just 27,000. Half of all American broilers now come from farms producing more than 700,000 chicks per year. Big food industries came in and contracted producers for their brands and provided them with technologies and markets. At the beginning of this century three-quarters of global chicken production were in the hands of agribusiness companies.

The development of broiler production was paralleled by developments in the processing, marketing and consumer side. The birds themselves are torn into pieces and reconfigured in a multitude of products such as nuggets and strips. In 1930 the then 40-year-old KFC founder Harland Sanders (who never was a real Colonel) was operating a service station in Corbin, Kentucky, and it was there that he began cooking for hungry travellers who stopped in for gas. He called it “Sunday Dinner, Seven Days a Week”. Today, KFC, together with Pizza Hut and Taco Bell, is part of Yum! Brands Inc, the world’s leading restaurant company with over 40,000 restaurants and 1.5 million people employed in more than 125 countries and territories.

Chicken breeding is extremely concentrated as a result of high research expenditure and the capital-intensive nature of the chicken business. By the late 2000s only three sizeable breeding groups remained for broilers: Cobb-Vantress, Aviagen and Groupe Grimaud. Two breeders control 94 percent of the supply of laying hens.

In just half a century, the breeders created two different specialist chickens, each one incredibly efficient for its specific purpose. A typical laying hen of today needs 1.99 kilograms of feed to produce 1 kilogram of eggs, while a broiler hen will need 5.22 kilograms of feed for the same quantity. But the broiler chicken is far superior in converting feed to meat. To produce 1 kilogram of live weight the broiler needs only 1.7 kilogram of feed, while the chicken of a laying hen needs 3.8 kilogram. Unfortunately, both the broiler and the laying hen are less efficient than their common ancestor in being a chicken.

Today 300 million male chicks of egg-laying hens are killed in the European Union each year as soon as they hatch, because it is uneconomical to raise them for meat since meat from chickens especially bred for meat production is cheaper. Many of them, and their American siblings, are consigned to “Instantaneous Mechanical Destruction”, which is a technical way of saying they are ground up alive. Hens that no longer lay eggs also pose a disposal problem and are burnt or thrown into wood-chipping machines, sometimes alive.

The chicken industry provided a blueprint for the industrialisation of livestock. The capital-intensive model cuts out small farmers and pastoralists and is built on the use of bought-in inputs: feeds, medicines, technologies and breeding stock as well as external knowledge. The production model bears a close resemblance to assembly industries, and producers all over the world use the same breeds, feed and technology.

The notion of landscape, place or culture in our foods has totally lost any meaning under these conditions. What is particularly disturbing with the commercialisation of animal production is that it doesn’t take into account that animals are living, sentient beings. Through the commodification of animals, their welfare and their ability to exercise their natural behaviours have become externalities – side factors of production – just as the landscape has in plant production.

The myth of choice

We might believe that we chose to eat a certain food; that it is the consumer who is the conductor of the whole food system, but that is an erroneous starting point for a conversation about which foods we eat and which we should eat. Our palates have been shaped over centuries to like some things and dislike others. Differences in local foods and food preferences are proof not of how different from each other we are, but of how well we adapt to what is available.

Swedes liked herring and cheese, Bantu people liked cassava and goat stew, and people in South East Asia preferred rice. Fermentation, drying, freezing and curing have all played different roles in different countries. If you lived in the humid tropics, your culture would never develop cured ham, as the conditions for making the ham do not exist in such a climate. The availability of fats and fuels determined your favourite style of frying or roasting or if you mostly ate food boiled in water. Our food preferences were thus by and large dictated by the local ecological context we lived in.

With fossil fuel and capitalism, this all changed. Today, our food choices are by and large determined by the economy instead of ecology. In most parts of the industrial and urbanised world, people hardly eat anything that comes from close by. Consumption has no direct link to local agriculture, which is organised in the same way as modern assembly lines, with parts being delivered from all over the globe to be assembled as a Gorby’s pizza, a McDonald’s hamburger or a Ben and Jerry’s ice cream.

Indonesians consumed a stunning 14 billion packages of instant wheat noodles in 2012. What is strange about that? Indonesia produces no wheat at all – what has become a national dish is based on a raw material that is completely imported. The history of wheat in Indonesia began in 1969 when the United States extended food aid in the form of wheat flour and wheat to Indonesia. Indonesia’s wheat imports outweigh the total agriculture development budget in this nation of 250 million people.

Does this mean that people have almost unlimited choice from the global supermarket? Not quite. To be sure, when one stands in front of a supermarket shelf or sits at a table reading a restaurant menu, there are many choices. But before we face all those choices, a number of people have already made the selection for us to choose from. Governments and agribusiness are choice architects and they shape what consumers can and cannot buy.

Next week: The modern food system

Third World Resurgence

Next article – Herbicides and antibiotic resistance

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