The Cost of Food  

Consequences of not valuing soil and water and those who manage them

Tony Allan[1] and David Dent      

Food, water, soil and society: competing claims and their consequences

The food system is a political economy, not an economy

Water flows uphill to money and power (Reisner 1984) that have created a politicised food system which delivers cheap food but is blind to the value of soil and water – it does not account for the damage done by the way farmers produce that food.  Everyone assumes the food system is an efficient, seamless conveyor of affordable food from farm to fork.  Not so.  It has degraded the land, overdrawn water resources, and hollowed out rural societies to the point where food supply chains are at risk and there is no certainty that they will be able to meet future needs.  Julian of Norwich affirmed: ‘All shall be well, and all shall be well, and all manner of thing (sic) shall be well’ (Serranus de Cressy 1670).  And politicians of all stripes promote this reassuring myth – just imagine what will happen if people were to think there won’t be food on the shelves next week!

The food system is unsustainable: first, because farmers are trashing soil and water resources – whether knowingly or not.  Secondly, it is a secure market system only so long as governments are willing and able to fund public subsidies – at the beginning of the food chain where farmers produce our food, and at the end of the chain to assist the employed and unemployed poor to obtain food that is still too expensive for them without subsidies.  Food prices are misleading: farm-gate prices don’t include all the costs of farm labour; they certainly don’t reflect the environmental costs of regenerating ecosystems, the mining of soil fertility and the erosion of the soil itself, of floods and droughts, pollution of fresh water, or the climate crisis.  In practice, producers subsidise consumers and exporting countries subsidise importers who receive this food at much less than its real cost; the real price is borne by soil and water resources.  Shelf prices do, however, capture most of the costs of inputs beyond the farm gate where food is traded, processed and retailed.  Some 90 per cent of the value added in providing food and food-related services is generated in this part of the supply chain.  But even these prices don’t capture the consequences for public health of consuming processed food of questionable quality.

The political economy of the food system is a composite of three quite different systems, or modes (Allan and others 2019).  In the first mode, which has been operating for more than 4000 years, there are no effective accounting rules.  The political imperative – affordable food – has imposed a system in which farmers deliver food at well below its real cost.  The financial difference is made up by subsidies to farmers but, as we have explained, these come nowhere near the real cost.  In Mode 2, food is traded, processed and delivered to consumers in an effective market where profits are made and taxes paid.  Mode 3 is where food consumption takes place in another failed market where governments have to intervene to ensure access to food that may still not affordable to the employed and unemployed poor.

Ghettos of the mind

For centuries, farmers and society lived with volatile farm-gate prices.  In England, for which we have data, prices fluctuated wildly but progressively increased until the repeal of the Corn Laws in 1846 (Figure 1).  This marked a decisive shift from a protected market to a version of free trade which, along with much-reduced costs of transport and increasing farm productivity, has driven down the international floor price ever since.  This is remarkable when, over the same period, human population has increased seven-fold and its demands have grown by an order of magnitude.  The only significant price spikes in this otherwise long-term decline of international food prices have been associated with two world wars and the 1970s oil crisis (Figure 2). 

Figure 1 Wheat prices in constant 1996 UK pounds – 1264-1998

Source:  Max Rosner. Data source Makradakis, Wheelwright and Hyndman, 1997. https://ourworldindata.org/food-prices/

Figure 2. Long-term trends and projections of international food prices

Source: Brooks J 2017 Changing trade agendas and food security. OECD Trade and Agriculture Directorate, Paris. www.agri-outlook.org

The first Ghetto: the profound effects of Mode 1 conditions on farmers

Comparing the distribution of profits between three sectors of the food system in the USA – the farm sector itself, manufacture of the means of production (machinery fertilizers, pesticides, etc.), and the ‘market’ (food consumption) sector that connects producers and consumers – Smith (1991) observed that the share of profits accruing to the farm sector shrank from 41 per cent in 1910 to 9 per cent in 1990, the industrial sector increased its share from 15 per cent to 24 per cent, the market sector increased its share from 44 per cent to 67 per cent.  This trend continues; in OECD countries, the market sector now accounts for about 90 per cent of the value added in the food system and, by 2008, the share of the farm sector was down to only 3.3 per cent (DEFRA 2015, Eurostat 2009).

Farmers are price-takers, not the price setters, so farms must either get bigger or get out.  Untold millions of small and medium-sized farms have gone bankrupt.  Big farms have got bigger but have shed labour and adopted simplified, specialised farming systems that depend on ever-more-powerful machinery, more potent fertilizers and agro-chemicals, more-efficient irrigation, and new crop varieties that can take advantage of these gifts of technology.  The visible costs have been those associated with the flight from the land, the hollowing out of rural communities and rural infrastructure, and accelerating urbanisation and emigration.

Farmers are struggling for survival.  Their numbers have fallen dramatically; they believe they are under siege.  This is a lethal ghetto of the mind.  Farmers’ exposure to natural and commercial risks is reflected in the extraordinary suicide rate across the farming community (Weingarten 2017, USDA 2017).  Farmers are trapped in an unsustainable system that forces them to rely on industrial inputs promoted by the purveyors of these inputs who wield enormous market power.   Transition to sustainability will need nothing short of a revolution in soil management that only farmers can deliver but it’s hard to be green when you’re in the red.   Meanwhile the value of soil and water management by farmers and graziers is unrecognized and unrewarded.

Second Ghetto:  Weakness of regulation and absence of accounting rules

Much has changed over ten millennia but some things don’t change: production and supply of food are driven by who owns what, who does what, who gets what, and what they do with it.  Ownership and access to productive land are eternally contested.  There has never been any shortage of laws – and conflicts over ownership are the stuff of history.  Even in times of relative stability, there are disputes about private property rights v communal rights, access as opposed to ownership, private v public interests, water rights tied to land rights…  Now, as we push against planetary boundaries (Rockström and others 2009, Steffan and others 2017), we have been caught unawares by the absence of any legal protection for, or even effective accounting rules that capture the value of environmental services including the supply of fresh water – on which food security absolutely depends.  Likewise for carbon capture – on which the stability of climate depends.  Water has never been valued or accounted for in Mode 1 markets; carbon capture has hardly been valued or accounted for anywhere.

Third Ghetto:  Complacency. Consumers are distanced from the risks faced by the farmers who produce their food 

This mindset has become more and more firmly embedded over the past half century – while the stewardship required to maintain the environmental services that Society depends on is taken for granted; Society assumes the food system is an efficient, seamless conveyor of affordable food from farm to fork.  In the absence of effective accounting and regulation, consumers are blithely unaware that their choices are destroying the ecosystems on which food and water security depend (Godfray and others 2018, Benton 2016).

Legislators are unwilling to break out of these ghettos of the mind.  The unwritten contract that governments have struck with Society is that everyone is entitled to secure access to affordable food.  The outcome is a political economy of food that is kept in place by direct payments to farmers and to consumers – the politics of mobilising these direct payments is politically feasible.  The politics of legislating for effective accounting rules in Mode 1 that would  reveal and capture the externalities of ecosystem extinctions and the costs of stewardship are not feasible under current conditions (without radical change).  Unfortunately, these legislative and accounting measures are prerequisites of any reforms that bring about effective Mode 1 markets and urgently needed public and private investment.  Radical change calls for a shift in power relations between Mode 1 and Mode 2, and Society needs to give legislators the political space that frees them from their own ghetto of the mind – walled in by the imperative of delivering cheap food.

Disharmony: how we produce food confronts the ghettos of the mind

The way we grow crops ruins the land.  Every year, we root out the crops, turn the soil upside down, and start again (Crews and others al 2018).  Bare soil invites invasion by weeds – and rain splash that turns the topsoil into mud; mud that clogs the pores so that rainwater ponds or runs off the surface carrying the soil with it.  When the rain stops, the pulverised surface sets as a crust that yields immediate runoff from the next rainstorm.  Bare soil bakes in the sun – so do earthworms and myriad smaller creatures that should be maintaining soil permeability.  And bare soil is carried off by the wind; three quarters of the topsoil and three and a half million people left the Dust Bowl of the, Plains States of the USA in the 1930s.  None of this is accounted in the price of food.

Even if the soil stays where it belongs, arable farming is less productive than natural vegetation; crops are carried away from the fields, not returned to the soil, and separation of cropping and livestock has cut off the supply of farmyard manure; so farming is running down soil organic matter.  This matters because soil organic matter is a bigger carbon pool than the atmosphere and all the standing vegetation put together (IPCC 2010, 2019) and the strongest brake on global heating.  It is a bank of plant nutrients and the fuel for the soil organisms that accomplish nutrient cycling, dispose of wastes and toxins, and control weeds, pests and diseases.  And it stabilises the architecture of the pore space that receives rainfall, releases water to plant roots, and drains any surplus to streams and groundwater.  Running-down soil organic matter means that droughts and floods are exacerbated, agriculture burns up far more energy than it harvests and, far from being a sink for greenhouse gases, emits them in clouds.  None of this is accounted for in the cost of food.  Sooner or later, a tipping point is reached when the soil itself becomes unstable and leaves the stage – then it’s too late to keep better accounts.

The way the food system engages with the hydrological system is invisible but it isn’t pretty.  Figure 3 depicts how food-water flows through the three market modes of the food system from the farm to the consumer and highlights the prime role of Mode 1 food production in the fate of water resources: it comprises well over 90 per cent of total water consumption (Mekonnen & Hoekstra 2011).  Setting aside water locked up in ice caps and glaciers, all fresh water is delivered by the soil.  There are two critical junctures: the first when rain hits the ground – where it may infiltrate or run off carrying the soil with it.  The second in the soil itself:  soil water may evaporate from a bare surface, be taken up by plant roots, or drain to streams and groundwater.  Both junctures are managed by farmers.

Only a little of the water taken up by plants is used to make new plant material; most of it is transpired back to the atmosphere – the more green leaves, the more transpiration.  Let us call the water consumed by plants green water.  Runoff and water entering the soil over-and-above its water-holding capacity drains to streams and groundwater.  Let us call this blue water.  The distinction is important: green water makes up two thirds of all fresh water but blue water gets all the attention because it can be tapped for many other uses than growing food.  Rainfed farming draws only on rain where it falls, when it falls; it cannot use last year’s rain or anticipate next year’s.  But irrigators, drawing on groundwater, can consume reserves stored over centuries – and overdraw without penalty.  They can take next year’s water and that of years beyond; they consume more than 70 per cent of water abstracted from streams and groundwater but, with the exception of the state of Israel, abstraction has never been properly regulated so blue water resources are overdrawn wherever irrigation is practised (Wada and others 2012, Perry 2019).  Our analytical framework introduces further abstraction, beyond green water and blue water; we need to consider all the water embedded in commodities as it moves along the food chain, commonly to the other side of the world.  Let us call this virtual water.

Table 1   Types of water in the natural system and in the food system

Figure 3 Three water resource types and the three market modes of the food system – an analytical framework, after Bromwich and others 2019.  Note the types of water – green, blue and virtual; the brown flows are return flows that may be diluted to be reusable for food production or, if treated, made usable for non-food uses.  Global average environmental flows would be larger than shown here (see Mekkonnen & Hoekstra 2010).

Compared with the volumes of green water consumed as ‘farm flows’, the flows of real water consumed in modes 2 and 3 are negligible.  Modes 2 and 3 pay for their blue water inputs but they pay nothing for the unaccounted virtual water embedded in the food commodities which they trade, manufacture and retail.

Power relations in the food system

Food systems evolve with industrialisation: power shifts but farmers, farm labour and the environment are always weak 

Farmers and graziers manage land and water but the food system and governments, not the farmers, dictate how they can be managed – or mismanaged.  Originally, the food system was the mainstay of every economy, providing a modest income for numerous farmers.  In high-income economies where farmers have become a very small proportion of the population, governments have to work out how to provide cheap food for the very numerous under paid.

While the food system comprises the three-mode supply chain described above, it also has three modes in at least two other ways.  With respect to the value added to food commodities, three historic phases of the political economy can be conceptualised as pre-modern, modern and late modern.  Figure 4 shows how the proportions of the value added in the first two modes of the food system have changed since the onset of industrialisation.  In OECD economies, farmers and growers now account for less than 10 per cent of the value added.  Food traders, manufacturers, processors and retailers add 90 per cent of the value and generate lots of jobs, especially in retailing and hospitality. At the present day, the food system also has three modes with respect to the jobs it provides in contemporary low-income, middle-income and high-income political economies (Figure 5).

Figure 4   Value-added in the food chain in Market Modes 1 and 2

Figure 5 Composition of jobs in the food system in low-, middle-, and high-income countries (World Bank 2017)

Food now accounts for a small fraction of household expenditure and of Gross Domestic Product (as conventionally calculated).  For example, in the USA in 2017, the farm sector accounted for 0.9 per cent of GDP; the whole food system accounted for about 5 per cent (CIA 2018).  The economic transition from low- to high-income is marked by an increase in the value added in trading, manufacturing, retailing and food services.  This is matched by an increase in the proportion of jobs, from 9 per cent to 79 per cent, while jobs in the farm sector shrank from 91 per cent to 21 per cent.  Figure 6 shows the small proportion of the gross value added in the food supply chain in the UK – namely 8 per cent.  It also shows in more detail on the numerous commercial activities that contribute the other 92 per cent.

Figure 6 Gross value added of the UK agri-food sector, 2015, in £ billion (DEFRA 2015)

The role of the State in Mode 1 markets

Governments have not established sound legal and accounting regimes in Mode 1 of the food supply chain.  Instead, they step in to subsidise farm incomes.  They do this to maintain rural economies, support farm livelihoods, and guarantee a degree of food self-sufficiency.  Figure 7 shows the levels of producer support for a range of countries and Figure 8 depicts recent trends in levels of subsidy in OECD and emerging economies.  OECD countries have cut back on producer support since the early 1990s when the EU changed its Common Agricultural Policy from payments for production – that had resulted in wasteful surplus production – to area-based payments.  New Zealand and Australia have eliminated or drastically reduced farm payments but, over the same period, farm payments in emerging economies have been rising .  A by-product of these interventions has been some degree of protection for landscapes and ecosystem services, reinforced more recently by stipulation of compliance conditions and the provision of publicly funded agri-environment payments.  However, the bar has never been set very high and this is a field where the state is learning on the hoof.

Figure 7 Producer support as % of gross farm receipts, 2014 and 2015 (OECD 2016a)

Figure 8   Producer support as % of gross farm receipts, 1995-2015 (OECD 2016b)

The first instinct of Society and its legislators is to pay more attention to employment and livelihoods than to land degradation and environmental services; volatile food prices and food security are existential issues for legislators as well as food consumers.  In England, protection of landed interests has a long history but, since the early 19th century, governments have had to grapple with the competing claims of farming, manufacturing and popular interests. The 1846 repeal of the Corn Laws, which opened the gate to food imports from North America, was a victory for manufacturing and popular interests.  Ever since, Society has been comfortably deluded that the food system works.  It delivers cheap food to consumers but pain to farmers and farm workers and serious harm to the environment.  Governments nurture the delusion; hide the harm by making payments to farmers that assuage its market failures; and also hide the erosion of the natural capital on which the food system depends.  And the system doesn’t deliver cheap food it delivers under-priced food.  The real price is being paid by under-paid labour, the taxpayer, and our life-support system (nature).  We need to consider how the system can be re-made.

Who needs to do what if we are to have a secure, commercially viable and environmentally sustainable food system?

Table 1 is an abbreviated list of the main private-sector, public-sector and social players in the food system.  It highlights the strength of private-sector corporate institutions; they are commercially effective but they are not obliged to make contracts with farmers that reflect the costs and risks of food production.  The right hand column highlights parties that need to be strengthened or that should exert responsible influence. This crude analysis indicates the need to:

  1. Enable farmers to provide good stewardship of land and water resources as well as growing food, fibre and fuel. This means either an increase in farm-gate prices or payment for specified environmental services.
  2. Introduce regulations to safeguard land and water resources and environmental services. This will require effective audit and accounting of these assets.
  3. Promote responsible investment in all parts of the system.
  4. Convince consumers to change their behaviour.
  5. If the food system is to be sustainable, five main players need to do things differently: farmers, accountants, the State, investors, consumers and Society. Corporate institutions in Mode 2 are important but they operate in an internally well regulated sub-system. Some food and beverage companies are moving towards  negotiation of ecosystem-aware contracts with farmers but the language they use suggests that  it is possible to achieve in parallel financial and social/environmental goals with no trade-offs (‘market environmentalism’ as per Bakker 2014, discussed in Rudebeck 2019). The paucity of such transactions reflects the current balance of power.

Table 2   Strengths and weaknesses of players in the food supply chain

Main players   Players that are

  currently strong (in

  black)

  Players & functions

  that Society needs to     ..strengthen (in black)

Mode 1 supply chain market
1   Farmers   Remunerate properly
Operators of water and other natural-resource infrastructure
Seed, fertilizer, chemical & equipment corporates
Mode 2 supply chain market
Food-commodity traders   Enjoy an effective   Contracts with farmers
Food & beverage corporates   legal regime and   should reflect
Big supermarkets   accounting rules   stewardship costs
Food and water NGOs
Multilateral and bilateral lenders and aid agencies
Mode 3 supply chain market
5  Society by adopting sound ideas and behaviour Consumers     Badly informed Ba Should eat responsibly
Functions that impact all 3 Modes
2 The State — through law and regulation The main player

especially in Mode 1

 
3  Accountants, reporting rules and regulations Ignore soil and water

costs & farming impacts

 Fix  legal regimes  &

accounting rules in Mode 1

4  Investors Few invest responsibly  Invest responsibly

In conclusion, the five main players – identified as 1-5 in Table 1 above – will be considered to show what Society’s consumers and its legislators need to do to provide a sustainable food system in a more effectively regulated supply chain – and save our life-support system.

  1. Farmers are and will remain the key players with respect to the health of the ecosystems on which the food system depends. The issue is this: farmers could be effective producers and stewards if they were properly paid – but they are not.  Food is too cheap, but are consumers willing and able to pay more?  Most probably they are not and, in any case, there are always some consumers who cannot.  As individuals and, even, collectively farmers are weak although there are a few corporate farms that operate in Mode 1 of the supply chain at a scale enjoyed by the big food manufacturers and retailers in Mode 2.  Collectively, farmers can enjoy political influence beyond their numbers, for example in Europe because of the complex political economy involving arcane land ownership regimes, under-paid farm labour, and cultural and emotional lock-ins that reinforce the dysfunctional Mode 1 of the food system.

In many countries, farmers receive direct and other payments that enable them to provide well-understood production services but do not pay for equally vital but invisible environmental services.  The path of least resistance appears to be direct payments for environmental services and audited compliance with specified conditions of stewardship.  In the case of carbon capture, carbon credits may be generated by imposing cap-and-trade legislation against emitters of greenhouse gases.  In the case of water supply, non-food water users will pay for their low-volume consumption but, ultimately, irrigators, will ultimately have their water consumption capped at environmentally sustainable levels.  This level of regulation will be contentious and many water ecosystems will be lost because regulation will have come too late.  Whichever path is taken, credible accounts will be needed.

  1. The State: The state has not put in place a legal framework and accounting rules that internalize all the costs of on-farm food production. It makes public payments to farmers to underpin their livelihoods. Even then, poor people may need further support to buy food. 

The state is the most influential player in the food system.  For the past two centuries in industrialised economies, it is the state that has had to ensure that food is cheap and always available.  It is the only player with the suite of capacities that could nudge into place and pay for the regulations, accounting rules and an investment regime that would make farming commercially and environmentally sustainable.  Politicians need Society to give them political space to implement reforms that will properly price food and conserve the natural resources on which sustainable food production depends. But Society has not signalled that this is what it wants.

  1. Accounting and reporting rules: Information is material if omitting it or mis-stating it could influence decisions that users make on the basis of financial information.  This basic accounting principle is not observed in the food system.

‘There is no cheap food.  Every consumer must realise that if food has a low price, someone else is paying the real price.  It’s either the farmer, the degraded soil, or the consumers themselves with their health.  At the end of the day, someone is paying the bill for cheap food.’    Emanuel Faber interview in Der Spiegel 8 June, 2019

Delapenna (2005) has demonstrated that effective markets depend on regulations that maintain a level playing field.  There is no better example of what happens without effective regulations and accounting rules than Mode 1 food production.  Peter Bakker, an exceptional accountant and President of the World Business Council for Sustainable Development, has argued very effectively that accountants would save the world (Bakker 2013).  Unfortunately, his perspective is not shared by the accounting profession which has given no effective leadership in advancing accounting principles and practice for environmental capital such as soil carbon, water, or biodiversity.  Accountants are just as expert as the professionals in sustainability departments of the food-supply-chain corporates in keeping abreast of the discourse.  But, when it comes to the actual protection of environmental capital, they ignore the information that is material. The financial system needs to be rebooted (Allan and others 2015, Bakker 2017).  Even then, accounting for intangibles like soil carbon or groundwater status will not change behaviour unless taxes, subsidies and trade restrictions are managed effectively.

  1. Investors. Investors also have immense power. If they choose to use it, they could change the behaviour of corporate institutions that contract with food producers.  But investors, in general, are blind to the value of environmental capital and to the employment rights of those who produce and prepare food.  Investors who only prioritise profit and returns on capital (currently the fiduciary duty of a CEO of a Mode 2 food corporate) should be an endangered species – but they are not.

The CEOs of some food manufacturing corporates have got the message.  Emmanuel Faber, at Danone has said: ‘The food industry is going nowhere.  Big companies have disconnected people from their sustenance.  Consumers, especially millennials, are sceptics about industrial-scale food production.  Even sellers of healthy products, such as mineral water, spread harm just look at the billions of their plastic bottles that choke the ocean … A revolution and the end of globalisation are nigh’ (The Economist 2018).  These people know all about investment and operational risks Faber came from investment banking, Paul Polman at Unilever came via finance departments; they know and are familiar with the reasons for market failure.  They curse the darkness, but where are the candles to illuminate, for the rest of us, the reason why we have the current accounting rules and legal regime in Mode 1? Danone has set itself the aim of converting from the conventional company form to a ‘BCorp’. BCorp certification by B Lab, a non-profit organisation, is accorded to for-profit companies that demonstrate high standards of social and environmental performance. The aim is to drive a cultural shift to redefine business success. For those companies who choose to adopt it, the BCorp system provides an alternative legal norm – but it is a voluntary system as compared with a mandatory one established in law/by regulation. The number of B Corps has grown to more than 2,750 (according to the BCorp website) but represents, as yet – a small island in an ocean of unsustainability. The design of the predominant private-sector ‘institution’, the conventional for-profit company (in its various forms in different legal jurisdictions), remains a serious water and environmental risk (Newborne 2012). The revolution has yet to come and, without it, the evolution is slow.

  1. Consumers and Society. Food consumers could significantly influence food security; they could be the voluntary regulators of the food system by consuming responsibly. At present, their food consumption choices impair their own health and the health of the planet..  It is widely estimated that food wasted by consumers accounts for about one third of all the food purchased; unhealthy food choices and unnecessary consumption add to the volume of wasted and degraded resources.  Quite clearly, consumers could significantly influence food security; they could be the voluntary regulators but they are not, yet.

_________

We have not focussed on corporate food traders, food processors and manufacturers and the big supermarkets because they operate in markets that have rules and auditing systems that account for almost all of their inputs.  All of the very little water they consume – about 1 per cent of food-water – is accounted for; they have adopted more efficient and more environmentally responsible practices that have halved their own water consumption during the past two decades, and reduced their costs.  Their accountants and their shareholders are content; it has all made commercial sense.  Perversely, there has been no equivalent enlightenment of farmers who actually manage and, on occasion, mismanage nearly all of Society’s food-water consumption.

How has Society adapted?

Consumers have not starved.  Farmers, mostly, make a living but it is troubling that suicide is an extreme component of the adaptation of the part of Society involved in Mode 1 food production.  That food production markets fail and the environment has taken the strain should also be troubling.  The food system delivers affordable food reliably – but not sustainably because farm-gate commodity prices are too low, and falling.

Society as a whole has hardly begun to adapt to the Laws of Nature via the food system.  The State and its taxpayers play a crucial role in mitigating, to some extent, the market failures in the system by providing farm subsidies and other direct payments to farmers.  Unfortunately, the State can only try to fix Nature’s degraded ecosystems with unwelcome regulation – not, as yet, with effective incentives.  As yet, there is no political will to properly fix the failures of natural resource mismanagement: they are denied or hushed up.

Conclusions

‘Everyone needs a lawyer once or twice a lifetime; a doctor once or twice a year. They need a farmer three times a day.’  Emily Norton (2019) quoting an idea of Brenda Schoepp (2017)

The cost of food is not reflected in the price of food: the dysfunctional food system does not operate properly priced transactions.  This is dangerous for people and the planet. It makes it impossible it impossible to introduce best, as opposed to second-best or worse, solutions to the problems of allocating and managing land and water. The condition frustrates policy-makers and those who advise on food and environmental policy – who would like prices to reflect value and the costs of all inputs, including intangibles.

Governments dare not meddle with the certainty that affordable food will be available – they remain in power only as long as this certainty is in place.  Practical policy advice concerns itself with piecemeal improvements, making do with empirical evidence and large doses of judgment (Lipsey 2007).  Whether current and future food systems will meet future demands for food, and therefore increased food-water, depends on Society, its expectations and its political systems.   Society determines demand – it determines global population and population hotspots; and it is forcing global heating with all its uncertainties – rainfall being one of the greatest.

It might be argued that the food system is a miracle of which governments and the private sector can be proud.  Public payments to farmers and consumers have kept in place a political economy that delivers a version of food and water security; for two centuries, it has delivered ever-cheaper food to populations that have increased seven fold; for all its failings, it passes the test of political feasibility and, in the arcane calculus of political economy, the food system is cost-effective.  The governments of industrialised economies will always be able to make the payments that fix the availability and affordability of food.  As a proportion of GDP, farm payments are small and manageable – although paying farm labour properly will remain an untidy and highly politicized issue and is one of the lethal challenges faced by those who farm.

The capacity to fix the availability and affordability of food for low-income economies of Africa heading for a population explosion is not certain.  And what the existing food system certainly does not do is protect and conserve the natural resources of land, water and ecosystems, stabilise the climate, and protect public health.  Society needs to recognize that to make it possible for farmers to practise sustainable land and water stewardship means giving legislators political space to install an effective legal regime and effective accounting and investing rules in Mode 1 of the food system.  Can it be that something so prosaic will control our destiny?

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[1] This paper is based on a chapter in an OUP handbook cited in the references  (Allan 2019)

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