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It's the Food Economy, Stupid!

I believe Rod MacRae (shown here) is one of a handful of experts to develop a critique of today’s food system based on its bad business case and its failure to do proper scenario planning.
 
If you don’t like reading arithmetic, you will find his writings tough going, but as soon as you subtract that problem, it pays to keep on reading. This is powerful stuff that more food system critics need to understand.
 
Just to be straight about my relationship with Rod, he’s the one who taught me food math back in the mid-1990s, when I called on him to help with the economic case that Jack Layton, Gary Gallon and I were trying to make for our newfound Coalition for a Green Economic Recovery. We enjoyed our conversations so much that we decided to work on a book together, and the result was our 1999 book, Real Food for a Change, which was also co-authored by my wife, Lori Stahlbrand. If I may say so, this book was one of the first to make the case for local and sustainable food that fostered “health, joy, justice and nature.”
 
Subsequently, I replaced Rod as manager of the Toronto Food Policy Council, and he became a consultant and popular professor of environmental studies at York University.
 
Apart from knowing how to add, Rod is steeped in agriculture and ag policy. We’re different on both scores. I don’t check the math on my restaurant receipts, let alone charts in articles. And I am into the city side of food.
 
So, apart from presenting what Rod has to offer everyone, I will throw in my own two cents worth about how a city perspective could add new dimensions to Rod’s work.
 
A nice intro to his mindset is a 2009 article on why the Ontario government should invest in helping farmers transition toward organic. You may or may not think knowing more about Ontario is meaningful to your life, but you will get the method, which should be applied to every jurisdiction in the world.
 
The gist of the case he and his co-writers make is that organic is the only high-growth area of the farm economy, and governments should stop seeing it as a modest niche that is simply tolerated. In fact, he says, whether or not organic is a niche is a red herring.
 
The business case is much more a throwing down of the economic gauntlet. He shows beyond a shadow of a doubt that when more farmers transition to organic, the government and population will save tens of millions of dollars in healthcare and environmental expenditures. No More Mr. Niche Guy is his case.
 
MacRae’s business case is that the government should invest in organic rather than wasting money two times – once to encourage farmers to farm the wrong products in the wrong way, and then again to pay for medical and environmental clean-ups and medical damage done by the very projects the government subsidized.  
 
It’s the economy, stupid, with equal emphasis on economy and stupid!
 
The biz case for smartening up in Ontario is that spending $51 million over 15 years to help increase the number of organic farmers from today’s 489 to a possible 5343 will save the government the better part of $2.18 billion.
 
MacRae’s business scenario would also save farmers $18.4 million a year they now spend on fertilizers and $9.1 million a year they now spend on pesticides, and an uncertain amount (unknown due to terrible book-keeping by farmers and the government) on sub-therapeutic antibiotics for factory-raised livestock. The farmers also benefitted because they sold their food for a hefty organic premium.
 
But the government made much more money than the farmers. In this scenario, the government would save $145 million a year it is now spending on environmental clean-ups – that’s without counting global warming emissions or human health impacts from pesticide residues, which would also be dramatically reduced.
 
Over the 15 years of MacRae’s scenario, the $51 million total cost of his proposed deluxe transition program led to savings of $2.18 billion. Return on Investment doesn’t get any better! Since Ontario is in deep debt, it would seem to be time to smarten up, and do this kind of thing more often!
 
In devising this scenario, MacRae is thinking like a European. He is thinking of funding and supporting farmers because they will provide public benefits, not because they will make more money for themselves, which is the North American way of thinking about farm supports.
 
MacRae is also thinking of how to use money from one budget, agriculture, to create savings in other budget lines – environment and health. That’s just not a way of thinking that North American ag departments can grasp. There may be long lasting silos on many farms, but none so strong as the silos in governments.
 
The European programs he imports for his scenario are fairly simple. One swath of them can be called "supply push." Cover the farmers losses while they are transitioning from conventional to organic, for example.
 
European programs also cover “demand-pull” – methods of encouraging sales. Improve and standardize labeling so shoppers recognize and respect them, for example.
 
Both methods are foreign to the thinking of North American governments, who prefer blunt instruments such as cash giveaways to any and all people who grow corn for use as car fuel or pop sweetener.  
 
If I had my druthers, MacRae would have checked out two other possibilities:
  1. One, he would have asked what kind of measures would support resilience. A food system cannot be called resilient, for example, when the average age of farmers is in the 50s or 60s. So why doesn’t government support the entrance of young farmers and other new entrants, such as people who farmed in another country before coming to Canada?
  2. I think the ag ministries also need to look around them with an urban pair of glasses. How about supporting urban agriculture as a way to promote the proportion of organic food available? How about supporting school gardens as a way to educate the next generation of food buyers, and possibly members of the next generation of farmers? Or how about encouraging farmers to grow “world foods” for the multicultural population that is so pervasive in cities?
MacRae’s more recent publication is from 2015, and again features a business case for different food policies. The publication is called Dollars and Sense: Opportunities to Strengthen Ontario’s Food System.  
 
If Ontario food policy staff are so smart, why are they making the province poorer? Ontario is rich in land, sun, water and ingenuity – all the qualities needed for diverse agriculture and fish. So why does Ontario import $10.9 billion worth of food more than it exports? And why is the percentage of imports going up substantially every year. Is it time to check and see if a mistake has been made?
 
The first thing that strikes anyone who looks at the charts is that the deficits are across the board. They’re substantial ($2.8 billion in fruit and nuts, for example) in areas where winter gets in the way of year-round production.
 
But imports are also substantial in items that grow perfectly well in Ontario, There are major imports of dairy, and of beef, lamb, pork, chicken. Ontario imports over 7 million tons of lamb, for example. An unbelievable 70 per cent of Ontario farm acreage is planted in soy and corn. But other than grains gobbled up by the industrial system that Ontario ag policy is beholden to, there are shortages of flax, rye and buckwheat, the most nutritious and eco-friendly of grains.
 
Climate cannot be blamed for all the fruit and vegetable imports. Ontario has a deficit of apples --  8.6 kilograms per person – even though they store well for most of the off-season. The same is true for other vegetables that store well, most notably carrots.
 
Ontario carrots store well enough that they can be exported to an island in the Caribbean I visited this winter (see my picture on top). But we import tons of carrots.
 
According to MacRae, if we reduced imports of foods we grow well by 10 per cent, we would reduce our trade deficit by a billion dollars a year and create 1600 new jobs and $33 million in new tax revenue.
 
Please fill in the blanks of the two missing words in this sentence which best explain the thinking needed in senior levels of the government: It’s the _ _ _ _ _ _ _,  _ _ _ _ _ _ !
 
The deficit looks even worse if we count the agriculture opportunity of growing a healthy diet, instead of the industrial diet favored by the ag policy people. If we ate the local fruits and vegetables and grains that grow well in Ontario, there would be huge unmet demand (a deficit) in almost every standard food – sweet corn, oats, apples, green beans, wax beans, white beans, cabbage, apples, and potatoes, for example.
 
Just take one example. If we grew the oats we should eat for breakfast or baking, we would plant 25000 more hectares in oats that would generate 241 new jobs and $3.8 million in taxes. (Isn’t arithmetic interesting?) However, it might cause a decline in sales of laxatives.  
 
MacRae doesn’t even try to hazard a guess as to what the savings would be if the provincial government actively tried to promote healthy eating and discourage unhealthy eating. But chronic disease accounts for over half Ontario’s health spending and food is implicated in more than a third of chronic disease, so savings are bound to be huge if the province makes good food easier and more accessible to have.
 
I think there are two things MacRae might have checked out if he had a more urban perspective.
  1. One is to assess what portion of the tourism deficit suffered in Ontario – about ten billion dollars a year, as big as the food deficit, and no more blamable on lack of natural assets – is due to the fact that agriculture has taken little interest in supporting culinary or agro tourism, a mainstay of Europe’s booming tourism industry. Arithmetic-challenged though I am, I will hazard a guess that the tourism deficit could be reduced by a billion dollars a year, if the same effort were put into all areas of the province as has been put into the wine region around Niagara Falls.  
  2. I think MacRae could also apply an urban lens. When I used to partner with my economic development counterpart at the City of Toronto, we did the math on local food this way – for every dollar spent on locally grown food from the countryside, five dollars were spent on packing, distributing and processing that would never have been done locally if the food had been grown far away.
The city has as much to lose or win as the countryside on this file, so we should not divide the world into two separate spheres of urban and rural.

These are just some of the topics that get opened up when the gateway is opened to making the business case on the catastrophic market failure that is food and agriculture.   

Editorial Notes: This article was originally published in Wayne's newsletter of March 17th, 2016.

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