Food, Farming and Countryside Commission

Changing Economics

By Will Frazer

22nd April 2021

We recently hosted the third of five #RoutestoAction workshops, which explored the economic aspects of agroecology. The #RoutestoAction series aims to help build the evidence, ideas and community of practice for a transition to agroecology in the UK by 2030 - and we were joined by a fantastic mix of over 135 farmers, academics, NGOs, Government and civil society.

With presentations from the economist, Professor Allan Buckwell, farmer George Young, Vicki Hird of Sustain, Dr Courtney Scott of FFCC, Chris Clark of Nature Friendly Farming Network and Johnnie Balfour of PFLA and Balbirnie Home Farms and with questions from the audience the session covered a huge amount of ground in 90 minutes, including:

  • The potential costs associated with investing in agroecological practices and a more mixed farming system
  • The potential implications for food prices and food affordability
  • The potential opportunities and mechanics within the supply chain to support an agroecological economic model
  • The potential impacts and implications of our future trading relationships with the rest of the world on agroecological farming practices.

This blog discusses some of the evidence and ideas gathered from the panel speakers, the audience’s comments and questions, and the answers given in the survey that accompanied the event. We will use this material to inform the second phase of our Farming for Change research, due to be published in the spring.

If you would like to contribute your own ideas, please complete our survey.

What did we hear?
  • Arguments for agroecology, organic or regenerative farming have been around for many decades, though their portion of the market still remains limited, so there are clearly some substantial barriers to change. Key barriers to growing the sector, including economics, have yet to be effectively resolved and will continue to impede progress unless addressed.
  • It is clear a transformation of the food system is required but no one to date is really bringing all the challenges and complexity together in an holistic manner and being upfront with the trade-offs required. To transition to a more sustainable food system, we need to be upfront with the realities of reallocating some land away from agriculture, changing what we eat, accepting a change in our food price regime and putting in place the necessary trade and regulatory requirements to avoid exporting production overseas.
  • The way farm economics is understood could be reimagined around a farm's natural fertility rather than conventional metrics of size or area. Understanding that external input costs are non-linear to revenue is central to this understanding. Farms that focus on maximum sustainable output will see profitability improve and deliver more environmental and public goods by default.
  • It is important to appreciate the historical context. We have been living in a managed landscape for 400 years with an equilibrium between farming and nature, but is only since the start of chemical agriculture post-World War II that this equilibrium has come out of balance.
  • To shift towards agroecological systems, dietary change is essential. This is not citizen led change, but requires radical overhauls in how our food system functions, including political decision making and reallocating power from large food corporations.
  • As a nation we are not paying the social cost of producing our food. Until we do so, the food system will remain dysfunctional and we will pay higher costs in the form of diet related ill health and environmental degradation.
  • Reorienting supply chains to put the predominance of value with the producer is essential. This necessitates implementation of effective policy, including the move towards the public paying for public goods.
Comments from Professor Allan Buckwell

"There are three big picture challenges that our food system and land use face: climate change, biodiversity crisis and diet and health…I would importantly add three further considerations: the chronic economic marginality of much farming in Britain and Europe; the political hypersensitivity of food prices; and the globalised nature of agricultural commodity markets."

"If the UK moves to transform its food system onto a plane of higher environmental quality and higher environmental standards – and I suggest higher prices consequently – are we prepared to deploy the necessary carbon and environmental border adjustments so that the domestic inducements don’t simply provoke a flood of imports with cheaper, but polluting inputs?"

Comments from Chris Clark, NFFN

"We now understand that farm business should treat nature as a shareholder in that farm business."

"The economic and commercial prospects of farms…is driven by the availability and quality of natural fertility and natural grass and is driven by the ability of the farmer to use that resource effectively."

Comments from Dr Courtney Scott, FFCC

"To make dietary change is essential…This does mean big changes to the way we eat and the way we produce food and ultimately the economics of [how] the whole food system is oriented."

"When we talk about dietary change we automatically go into a frame of mind that this is a citizen driven change…This is not all on citizens, the system needs to drive this dietary change and be set up to support this dietary change."

"Inequalities are holding back progress, and there are many people in the UK who are experiencing food insecurity…And in a food system like the UK, this is not a problem of not having enough food in the system. It’s a problem of people not being able to afford that food and that rests largely with the economics that are happening outside of the food system."

"Cheap food is only cheap in the short term…their long-term costs will catch up with us either in terms of environmental damage from the production system or in terms of health costs and damage to us as individuals, but also to the health system as a whole."

"The ability of individuals and households to be able to afford food that they buy is largely determined by what happens post farm gate and is a political decision."

"Subsidies and tax breaks and free trade agreements provide a huge advantage to large industrial food producers and processors at international level, which is one reason why industrially produced food, even when it’s been shipped from halfway across the world, is often less expensive than agroecologically grown food from the farm next door."

Comments from Johnny Balfour, Balbirnie Home Farms

"A fundamental change in our mindset of thinking about agriculture is rather than as a linear system with inputs and outputs, it is a series of interlocking cycles that we’re trying to manage to get produce out of those cycles. In doing this – in simple economic terms – we have reduced both our variable and our fixed costs over the last few years."

"We are demonstrating to ourselves that farming with nature is actually better for our bottom line than not."

Comments from Vicki Hird, Sustain

"We need to rethink supply chains. So more of the value…goes to producers of food. And that means policy has got to change to make that happen."

"We need new supply chains. New farmer focused supply chains."

"We need policy shifts, we need changes in how governments pay for the public goods and how they advise farmers, we’ve got to have advice on business planning with these things in mind, we’ve got to have LEP’s (local enterprise partnerships) and any funding that’s been syphoned off to local and regional development and regeneration should support new supply chains and to make sure buying standards target good farming practices."

Comments from George Young, agroecological mixed farmer

"[We need to] make sure that we integrate the consumer into what we’re doing on the farm…which is the whole basis of food sovereignty and a really key part of agroecology, that is not talked about enough. Then you start understanding that it’s no longer about affordability, but it’s about value. Two words that have broadly similar meanings to a lot of people, but they’re actually really different."

Comments from the audience

"The language we use (subsidy/ investment/ grants) really does matter. In other sectors, government calls spending in whole system change, ‘investment in a green recovery'." Sue Pritchard

"Living wage and benefit levels need to reflect the real price/ cost of food. That way real prices could be paid." Charlotte Barry

"Public procurement must be an important driver for this system change." David Finlay

"Quality, locally produced meat doesn’t have to be more costly: the cost per meal depends upon the amount consumed as well as the price: a 20% reduction in amount will easily compensate for the perceived costs of marketing locally. Let’s get past this assumption that good and local inevitably means costly." Catherine Mack

"In order to effect positive change in the ‘food system’, those businesses who are pushing the agenda need to be required to fully take part in that change. And by those who push the agenda I am referring to the fast-food giants and the huge food processing businesses that are profitable for owners, but have drawn strong criticism for low pay to the workforce and poor relations with their primary producers. The Lancet report, The Global Syndemic, pointed out that industry and policy have repeatedly failed to take significant action. Food is a cultural matter. Fast food identities (McDonalds, KFC and so on) are in the common lexicon and not by accident. People meet and share experiences in those outlets. Cultural change is where agroecology has had more traction - and that is in locations in the global south where there it can be argued there has been a less food industry-focused cultural identity to begin with." Steven Jacobs

Questions

What will supply chains look like in 2030?

We asked the audience to imagine and describe how their local food supply chain would operate in 2030 within an agroecological food system. These are some of the components they came up with:

  • Seasonal, local, fresh, high quality, nutrient dense food available through a variety of outlets in communities
  • More supported community growing
  • More direct to consumer sales
  • Most farmers will be members of supply co-ops and supply co-ops deliver produce to the supermarkets
  • Citizens know where their food is coming from and retailers pay growers fair prices

And

  • I look forward to seeing examples of this very thing emerging in a spontaneous and individualistic way as different food groups begin to develop the possibilities for working with local producers, processors and retailers to build bespoke supply chains for procuring as much agro-ecologically sourced food as possible from within their prescribed area or region. Such systems would have a self-evolving capacity, based on the number of members, their perceived dietary needs and the food-producing capabilities of the available land. Such systems are necessarily hard to describe as each will all take on a life of its own, centred around their own specific circumstances and the particular set of personalities that come to work together.

How affordable would agroecologically produced food be in 2030?

We asked the audience to explain why their food may be more or less affordable in a predominantly agroecological food UK food system. Here’s what they said:

  • Hard to say, because food prices depend on a complex mix of political and commercial interactions and how they play out amongst the many decision-makers within the food system. We must wait to see how well the government stick to their stated intentions of only supporting farming practices that provide public goods other than the supplying of food. 
  • Probably more affordable, as it will mostly be coming from overseas, and unless there are trade imposed metrics (that are measurable, enforceable and embedded within trade arrangements) to ensure all food consumed by the UK is agro-ecologically produced, there will be little or no global gains. The UK, because of its wealth, will have the privilege of not having to produce as much food. This will probably take much longer than 8-9 years to fully evolve.
  • As long as there is a concerted national programme to raise awareness of the benefits of lower meat consumption (say a reduction of 20% per meal), less food "waste", from mis-shapen fruit and veg to liver etc), It will be no less affordable - and better for us because diets will be more varied.
  • High quality, nutrient dense food should be the norm and subsidised to make it affordable. Farmers producing high quality food should be rewarded.

More questions to explore

  • Where is profit in food systems?
  • What level of profit is going back to the farm?
  • Who is most likely to lever change in ‘the food system’?
  • Are farmers ready to downsize and reduce livestock after years of having to push the system so hard and numbers so high?
  • We are applying agroecological practices within a neoliberal, growth focused social and economic context; as regenerative and agroecological principles could be considered antithetical to ideas like growth and individual financial profit regardless of cost, is there a need for a new economic approach to match these systems?
  • Is ensuring security and affordability in the food supply chain a public good? Does ELMS recognise it as a public good?
  • Is the problem of modern farming really intensification?
  • Should government make direct intervention to regulate supermarkets to sell less UPF and more whole foods?
  • Can the system go part way there by, for instance, reducing but not eliminating mineral fertilisers and PPP’s, but adopt some practices?
  • The global commoditisation of agriculture is driven by big money and large corporate interests, whose investments dwarf other levers for change. How best to challenge these global monopolies?
Research shared by the audience

The ‘4 per 1000’ Initiative: https://www.4p1000.org/

Reconnecting people with nature through agriculture: https://www.mdpi.com/journal/agriculture/special_issues/People_Nature_Agriculture

Investing in local food hubs: https://www.sustainweb.org/blogs/feb21-food-hubs/

Indy Johar on making sense of highly complex systems and make effective change: https://www.youtube.com/watch?v=X3cphdAQdug

Farmer focused supply chains: https://www.sustainweb.org/blogs/feb21-farmers-need-power-money/

Comments on the trade and agriculture commission: https://www.sustainweb.org/news/mar21-trade-agriculture-commission-report/