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Regenerative Agriculture and the Denial of Comparative Advantage. Recreating Old Problems?  

By:

  Pierre Desrochers

Part 1: Food Security

Supporters of alternative agricultural systems often argue that present-day monocultures are primarily the result of climate change-inducing cheap petroleum and subsidy programs that benefit large-scale producers. They would rather leave fossil fuels in the ground, redirect government support towards “regenerative” approaches in which smaller and more diverse operations grow a variety of crops and keep diverse animals that complement each other, and have these operations serve primarily a localized “foodshed.” As stated by alternative food system guru Michael Pollan, the vast US federal agricultural policy apparatus should support “a transition to a new solar-food economy” by, for instance, adjusting payment levels to “reflect the number of different crops farmers grow or the number of days of the year their fields are green,” subsidizing four-season farmers markets, and rebuilding local distribution networks.

This narrative is both incorrect and puzzling. For instance, the regional specialization of agricultural productions in the United States and elsewhere long predates the development of transportation fuels out of petroleum. Even more puzzling is that present-day alternatives look very similar to the way our ancestors once produced food, albeit supplemented with technologies whose development required an ever more globalized market. To critics of agri-business, however, modern practices were shoved down the throats of reluctant consumers. Unbeknown to them though, food security was a key consideration as will now be discussed.

Farming activities are categorized as being either of a subsistence or commercial nature. Subsistence farming typically takes one of three forms. One is shifting agriculture where a patch of often newly deforested land is cultivated for a few seasons before being abandoned after its fertility has run out or weeds and other pests have taken over. Pastoral nomadism revolves around the movement of livestock from one grazing area to another depending on the local landscape and season. In some of the best locations though, individuals often practiced rudimentary sedentary tillage in which they continually exploited the same plot of land and, by necessity, produced a mixture of crops and animals raised for family consumption or trade with more or less distant neighbors. (For instance, the typical thirteenth century western European peasant strived “not exactly [for] self-sufficiency, but self-supply of the main necessities of life” such as bread, pottage or porridge, and ale.)

In the context of shifting agriculture and sedentary subsistence farming, individuals preserve and store crop products at the end of the growing season and draw upon them until the next harvest. Farm animals are fed organic waste (including crop residues), low-grade forage (such as the low quality weeds that would typically appear on fallow land) and are left to scrounge for insects, greens, acorns, wild fishes and whatever other nutrition they can find. Some animals are used for power and transport (e.g., plowing, pulling a cart) while others provide intermittent variety in the diet (e.g., meat, milk, eggs and blood) along with valuable by-products (e.g., hides, leather, fibers and feathers). All of these also provide manure and can serve as a form of insurance against crop failures. In the words of agricultural economists George Norton, Jeffrey Alwang and William Masters, in subsistence agriculture livestock acts as “a savings bank and an insurance plan.”

Like all agricultural producers, however, subsistence farmers could never avoid insect pests, diseases and bad weather during the growing and storage periods. The Roman poet Virgil alluded to some recurring problems and calamities in his Georgics. Weeds invaded the land. Voles and mice spoiled the threshing floor. Cranes and geese attacked the crops. Goats ate the young vines. Moles, toads and ants feasted on or undermined the farmer’s work. Virgil added that whatever production survived this onslaught could then be damaged or wiped out by summer droughts and winter windstorms, snow, hail or heavy rain. Even in good years, he added, a field might be accidentally set on fire. (Some of the calamities Virgil left out include frost, fungus and animal diseases, including diseases of work animals that severely reduced agricultural productivity.)

These risks were traditionally minimized by growing different kinds of crops simultaneously, by producing as much as possible beyond the immediate year’s requirements, and by having one household work different parts of the local landscape (e.g., one family could simultaneously work a plot in a river plain and another on a hillside). “Catch crops” that could be grown quickly after the early failure of a more desirable one were often crucial. For instance, in the Mediterranean context, a failed winter wheat crop could be partly compensated by the planting of short cycle crops such as millet or dry legumes. In England, lesser spring-grown grains such as oats and barley played the same role for rye and wheat, while in central Pennsylvania fast growing buckwheat was another option.

Unfortunately, no matter how diversified their operations were, subsistence farmers had no choice but to put all their food security eggs in one regional basket. This was always and everywhere a recipe for disaster. As Gregory of Nazianzus observed in the fourth century AD about the inland city of Edessa:

There was a famine, the most severe within the memory of man. The city was in distress, but there was no help forthcoming from any quarter, nor any remedy for the calamity. The maritime cities support without difficulty occasions of want like these, since they can dispose of their own product and receive in exchange those which come to them by the sea. But we in the inland can make no profit on our superfluous products, nor procure what we need, having no means of disposing of what we have and importing what we lack.

Fortunately, the 19th century saw the development of coal-powered steamships and railroads which made it possible for the first time in human history to move large quantities of food at a low price, not only on water but also on land. This transportation revolution not only paved the way to an ever more abundant, affordable and diverse food supply, but it also put an end to widespread hunger and misery in more advanced economies.

Most people at the time were extremely grateful for these developments. Writing in 1856, British historian George Dodd observed that in the “days of limited intercourse, scarcity of crops was terrible in its results; the people had nothing to fall back upon; they were dependent upon growers living within a short distance; and if those growers had little to sell, the alternative of starvation became painfully vivid.” In 1862, economist and agricultural writer T. E. Cliffe Leslie reminded his readers about the “unmistakable warnings … in the last few years,” such as the potato disease, that “we cannot afford to be dependent for the staples of our food and industry on any single place or production.” In his 1871 Annals of Rural Bengal, William Wilson Hunter noted that an important set of preventive steps against famines included “[e]very measure that helps towards the extension of commerce and the growth of capital, every measure that increases the facilities of transport and distribution… [and whatever tends] to render each part [of a country] less dependent on itself.”

In a speech delivered in 1875, the Australian entrepreneur Thomas Sutcliffe Mort observed that the advent of the railroad, the steamship, and artificial refrigeration had paved the way to a new age where the “various portions of the earth will each give forth their products for the use of each and of all,” the “over-abundance of one country will make up for the deficiency of another,” and so would the “superabundance of the year of plenty… for the scant harvest of its successor.” Humanity’s long history of famine and chronic malnutrition, he pondered, had not so much been the result of God’s not having provided enough to spare, but rather the unavoidable consequence of the fact that “where the food is, the people are not; and where the people are, the food is not.” It was now, he observed, “within the power of man to adjust these things.”

This power is still very much with us and it would be nothing short of suicidal to turn our backs on it.

 


Pierre Desrochers, is Associate Professor of Geography, University of Toronto Mississauga.


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READER COMMENTS

Stéphane Couvreur
May 3 2022 at 4:55am

Regarding the carbon tax at 23:20, I am not surprised that a government official speaks of this instrument as her preferred option to reduce carbon emissions. What I find more surprising is the lack of reaction of economists, who could argue that cap-and-trade is preferable. There can be a reasonable debate about this claim, of course, but I believe cap-and-trade to be preferable because:
1) it doesn’t have the word “tax” in the title and generates no revenue for the governement (provided that the quotas are allocated for free),
2) as a consequence of 1), there is no need to redistribute the receipts from the carbon tax as is standard with a Pigouvian tax,
3)

Jon Leonard
May 6 2022 at 5:36pm

A key difference between a carbon tax and a cap-and-trade system is how they handle errors in forecasting.  That is, under a tax system it is easier for individual businesses to adjust if the overall target was chosen incorrectly.  Under a cap-and-trade regime, the total amount of pollution is pre-determined; this either pollutes more than necessary if the cap is “too high”, or stifles the economy more than necessary if the cap is “too low”.  As in many cases in economics, the central plan can be suboptimal.

Stéphane Couvreur
May 3 2022 at 5:08am

(Oops!)

3) as a consequence of 2), there are fewer opportunities of rent-seeking and buying constituencies with the said tax receipts.

I have seen no economist making those points. Nordhaus prefers the tax because, as he writes in an endnote, quotas are more susceptible to cause corruption in developing countries. Sumner considers “foolish” the idea of allocating the quotas for free in a cap-and-trade system (I don’t understand why, cf. opportunity cost). Harford considers that a tax or a cap-and-trade are almost equivalent and points to Weitzman’s 1974 “Prices vs quantities” article. Levitt fears that firms would be better at distorting politically the allocation procedure in a cap-and-trade system than with a tax.

Do you have an opinion on the subject, David?

Best regards,

Stéphane

David Henderson
May 3 2022 at 7:03pm

Stephane,

I have two opinions.

First, either the tax or the cap and trade opens things to rent seeking. Your point #3 applies, but you didn’t mention the extensive fight that would go on as various firms, individuals, and governments pushed for more than their pro-rata share of permits. It’s hard for me to judge which is worse.

Second, your point about not getting revenue for the government is a good one. They’re likely to waste a lot of it. In my ideal world, which I think is highly unlikely, given the political system, the revenue would go to reducing the federal debt or reducing the most distorting taxes, dollar for dollar. Those are likely to be taxes on capital. But the political pressure would be strongly against that and in favor of giving each person and household a check. So the chance to either pay down the debt or reduce distorting taxes would be wasted.

A bigger point, in my view, is that there’s not much justification at this point for either. Remember that the goal is to “solve” global warming, not to reduce carbon usage per se. Reducing carbon usage is one way to do so, but there’s virtually no evidence that it’s the least-cost way. I think that some form of geo-engineering is likely to be substantially less costly.

Stéphane Couvreur
May 4 2022 at 1:07am

Thanks a lot for this long and thoughtful response.

A quick reaction:

Your third and bigger point is entirely right. No system solves for the optimal trade-off between reduction and adaptation. I will keep this in mind.

As for the first point, as long as there is some emission reduction, I believe cap-and-trade offers fewer opportunities for rent-seeking. Here’s why:
– it can be organized to be a one-time thing, so the rent-seeking contest occurs only once, initially, whereas the fight for the carbon tax receipts can go on forever;
– there is not much in it for bureaucrats, whose task would be to monitor emissions and not to regulate or collect a tax, so there’s a chance they will be more impartial.

Going back to your third point, I agree that cap-and-trade is far from “perfect” in any meaning of the word. Most economist I’ve heard criticizing it had a very different argument: “The price of tradable permits turns out to be too volatile to encourage firms to invest in carbon reduction technology”, they say (sic).

Your answer is implicitly that adaptation is better than reduction. This makes a lot more sense. It was also David Friedman’s answer.

Stéphane

David Henderson
May 5 2022 at 10:41pm

You’re welcome.

Good point about one-time.

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