Learning from the Drought of '12
The news outlets love a good disaster, and we've all been informed daily of the mega-drought in the Midwest. Three quarters of the US corn crop is under severe drought. Corn prices are up over 50% in the last month, soybeans are up almost 30%, and the USDA says they are still assessing the damage. No rain in sight yet and when combined with record low carryover stocks, we're probably looking at another record spike in prices. What I haven't heard in the news is any discussion over whether we have other options to avoid these increasingly regular crop disasters.
What happens to the crops in the Midwest impacts the world. All grain prices will be up. Meat, milk and egg prices will rise too, because of the animals dependence on these feed commodities. This year grain producing areas of the US have been hit hard. Last year it was the Mexican vegetables and southern US livestock. Since 2007, climate model predictions of increased weather variability are playing out in the real world. We can expect bumper harvests in between the crop failure years.
Farmers also have the extra burden of shouldering the other of the Twin Trends -- input price increases. As fossil energy production has leveled out since 2005, prices have increased, affecting the prices paid for fertilizers, chemicals, machinery, and seeds (which take energy to make). Along side the Twin Trends of increasing weather variability and increasing energy costs, we will have the Twin Crises of 1) increasing food prices and 2) falling farmer profits . Experts on climate and energy see no let-up in these trends.
People are asking,~ How can we keep food affordable (especially healthy food), and keep the business of farming profitable?
The cost of food is bound to increase from historic low costs, but 'healthy' food will increase less than 'unhealthy' food if we allow market forces to work. By 'healthy food' I mean food grown with a low use of fossil energy and grown close to market -- which will have the leg up on its 'unhealthy' industrial competition. Since 2005, and the sudden escalation of the Twin Trends, the local food movement has been growing steadily. New young farmers are locating in and around our cities, direct marketing to customers through CSAs, farmer's markets, and restaurants.
These new farmers are struggling, and there are still many logistical problems to solve as the local market grows. Fortunately, local food economies have lots of inefficiency in them. Yes, I'm saying that's a good thing. It's good because as energy prices go up, we can make local food more efficient as it grows in market size. For example, local slaughterhouses and crop aggregators are big unfilled niches that can make local healthy food competitive with ever increasing industrial food prices. The industrial system has no such slack in its production efficiency after 80 years of making strides to reduce costs. This study shows that even with the record high prices starting in 2008, higher input costs were shrinking conventional agriculture's net profit.
There are market forces at play pushing food production to be more decentralized, less fossil fuel intensive, closer to market, and, yes, healthier. BUT there is a countering force resisting movement away from centralized high-input monocultures. We must make sure that the countering forces do not harm the natural course of adaptation that is already emerging.
Smart policy would do three things:
1)Prioritize the growth of local agriculture, which grows vegetables, fruits, nuts, and raises chickens, eggs, beef cattle, goats, and milk cows on land surrounding our urban cores. Smart policy would educate perspective farmers on the efficiencies of permaculture design, subsidize land purchases, make land available for lease, incentivize slaughterhouses, develop food aggregating HUBS, alter city and county codes to make areas more farm and garden friendly, make soil building materials available at the neighborhood level for home-production. All these will help keep food more available and affordable than if we rely strictly on the conventional industrial supply lines. The growth in local low-input agriculture also has the side effect of being healthy.
2) Do not subsidize conventional agriculture unconditionally. Income crises will occur. Instead of giving conventional agriculture a blank check, any subsidization should be tied to conversion of land to practices that make the farm more resilient given the Twin Trends. Subsidies should be tied to practices such as cover crop usage, intercropping, crop/animal integration, conversion to pastures, and increases in soil organic carbon. Research shows that these practices can out-yield conventional practices. Current subsidized crop insurance programs place no conditions on practices. Our current policies are guaranteeing a net return on outdated and inefficient practices.
Local 'urban perimeter' agriculture will not likely supply a complete diet to all, and the vast hinterlands of the midwest will have a role. In 100 years, grains and some meat will still be produced far from markets and transported. But if we want such farms to operate without large subsidies, we must transition these farms to operate under lower input use and more resilient to extreme weather variability. A large portion of the land will likely be in pastures instead of grains, producing meat with less inputs. Grains will likely be grown in cover crops and in rotation with pastures.
3) Establish a national grain reserve to assure food in times of extreme emergency. A properly designed grain reserve would not operate as a subsidy, but rather as a market stabilizer by buying grain when its cheap and selling it when its expensive. Farmers of all types and sizes will benefit from relatively stable prices.
These three steps will help assure that our food is more resilient to the Twin Trends. Food will cost more regardless, but these policies will keep the price rises to less than if we continue along the conventional lines.
If conventional practices are kept afloat unaltered, then food prices will be artificially cheap in many years, and very expensive (or unavailable) in years where the system fails. With artificially cheap market prices, the more resilient, more input-efficient, local, urban perimeter agriculture will not scale up as quickly. This will leave our nation vulnerable to periodic food scarcity. And, as a nation as a whole, paying more for our food.
It looks like this year, the majority of people will be paying more for their food in the coming year. Our family will not be. We've been buying more local food for a few years. We pay more, but with this drought, our monthly food bill will not be increasing. The narrowing price spread between industrial and local food is propelling more people with every price spike to switch to local.
When the next mega drought (or flood) occurs in say 5 years, will we be ready? Will we have our cities ringed in farms, running off urban waste streams, growing their diverse crops upon an ever increasing sponge of soil organic matter. The deep soils and foliage canopies shielding crops and pastures from the worst impacts of drought and flood alike. Will our meat, eggs, and milk be produced upon pastures, resilient to feed grain price spikes? Will we have a grain reserve in place, assuring people a basic level of calories in extreme emergencies? To push forward, policymakers must keep the long-term trends and a vision in mind, and not fall into the narrow sighted tweaking of farm bill programs. We need to remember that we have options.