Thursday, October 13, 2011

The Balance

Think of two lines of force in perfect balanced opposition:

Whatever the intensity of the force each side is exerting, in order to separate the two you have to apply a force to each side that is slightly greater than the one pushing them together. And then, in order to keep them apart, you have to maintain that level of effort forever. But if you have the same lines of force pressing against each other and you apply your effort perpendicular to the opposed forces, it takes a great deal less effort to dislodge the two, and they pop apart quite readily.

If we think of the world's food producers (a whole lot of people everywhere except in the developed world) and the world's food consumers (which is, of course, everyone) and we track how the first group gets their produce to the second group, we find that by far the majority of food in the world ends up going through maybe a dozen transnational corporations with names like Cargill, and Monsanto, and Archer Daniel Midlands. Economists look upon this state of affairs and say that these corporations have both a monopsony and a monopoly; that is, they are both the only buyers for the products and the only sellers for the products. This makes the corporations very happy. In order to maximize their profits (which is their goal), they can put pressure on the producers to accept lower prices (because, after all, where else are you going to sell your coffee?) and on the consumers to pay higher prices (after all, where else are you going to get your coffee?). While this is not a good state of affairs for consumers or producers, it is a great state of affairs for the guys in the middle. In a healthy, functioning economic ecosystem, competition between different companies keeps pressure on to ensure a fair price to the producers of materials and to keep prices down when selling to the consumer. When a monopsony or a monopoly develops, things get out of whack. If we look at a diagram of this state of affairs (viz. Raj Patel) we see an hourglass:

But it kind of looks like the first illustration of the two balanced forces, and that bothers me. As Frederick Kirchenmann of the Leopold Center in Ames, Iowa says:
"... we should be asking ourselves what kind of agricultural system could produce the food and fiber we need in a world where oil is $250 and where we have twice the severe weather but only half the water that we have now. What kind of agriculture could we come up with? It's an entirely reasonable question to ask and yet, no one wants to touch it because when you get down to it, no one has a clue." 
The current industrial food system does two things very very well—it moves large amounts of food from one place to another (primarily from low cost of production areas to wealthy areas, but still...), and it makes the corporations in the middle very very wealthy (particularly now that they are working so hard to become the only place you can purchase seed). The current system also produces large amounts of food-like substances very cheaply (though mostly at the expense of those producing the feedstock), and distributes them very efficiently (at least in economic terms). But $250/bbl oil or more rain or less rain are perpendicular forces operating on the balance of forces we currently have. Forty years into the awareness of global climate change and we still have allowed an unstable, non-resilient food supply system to be developed. There are, of course, alternatives. But, like the transition to a sustainable energy system, the food system needs a backbone and the industrial food system is pretty much all we have. We are going to need to be able to move food and agricultural knowledge around the world during any transition to a sustainable food system. And it won't always be for profit, as we try to offer relief in areas suffering severe weather and crop failure. If we manage to transition into a sustainable food system—and that is a really big IF—we will need the systems Monsanto and Cargill and the like have developed. The thing is, we may not need the corporations. And that presents us with a massive problem; they will not want to disappear, and they will not wish to disappear quietly. Considering that these corporations are so large that their economies surpass most of the national economies they service, the potential for trouble is immense. If we consider the case of Monsanto and glyphosate-ready seeds like canola, we can see the redlinings of what we can expect in the future. As reported in Businessweek online, what was expected has indeed come to pass; glyphosate (better known by the trademark name Roundup)-resistant “superweeds” have begun appearing. And being able to say “See! I told you so!” isn't doing anyone any good. The problem is that the large chemical companies aren't seeing this as evidence of a blind alley and turning around. Rather, they are seeing it as an opportunity to revive older herbicides, develop crops resistant to those herbicides, and follow Monsanto into large short-term profits for the next ten or fifteen years. Monsanto denied for years that glyphosate resistance could occur in weeds, then denied for years that it had occurred, and now has announced that they will be adding resistance to a second herbicide into glyphosate resistant crops by 2015. To quote Monsanto Chief Executive Officer Hugh Grant, “The calvary is coming.” All this for a problem that never needed to exist in the first place. So what will companies like Monsanto do when they discover that they are being made redundant? The prevailing business theory is that corporations need to embrace change and pursue new markets in an ever-evolving environment. But just as Apple under Steve Jobs have shown, companies don't embrace change; they instead fall back on the same solutions. Solutions like closed systems, reduction of alternatives, growth by buying innovation, feudalism, and slavery. Most farmers are already not much better than serfs on their own land. Now corporations are buying up enormous tracts of farmland with the intent of hiring people to work it, changing farming from a profession of small and medium-sized businesses into classic wage-slavery. And not incidentally ending fourteen thousand years of cooperative innovation.

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