How different would the world be if we paid the True Cost of food and farming?
By rob hopkins 10th December 2013
What would our food system look like if the impacts of production on the environment and on public health were taken into account? At present the polluter doesn’t pay, and those producing food sustainably are not rewarded for positive outcomes. How might things work if the true costs of agriculture were taken into account? Tamzin Pinkerton, Food and wellbeing Editor for Transition Free Press, recently attended the True Cost Accounting in Food and Farming conference, organised by the Sustainable Food Trust at the Royal Geographical Society in London. It described itself as “a unique opportunity to discuss the development of a new economic model for a sustainable future”, and featured a great programme of international speakers. So how was it? Over to Tamzin:
“I arrived at the National Geographic Society, the beautiful South Kensington conference venue, early last Friday morning. For two days prior to the conference, many participants had been attending workshops and brain storming sessions together, so by Friday the buzz of ideas and connections had already filled the space. As guests took their seats, (including familiar foody faces from the UK, international growers, writers and NGO representatives, and an encouraging number of young students), I delved into the conference literature in preparation for the day ahead.
For those of you unfamiliar with the notion of true-cost accounting (as I was prior to last Friday), it is, briefly, the idea that the price of a product should reflect not only the cost of production and transport etc, but also the environmental and human health costs incurred to produce that jar of coffee, bunch of bananas or loaf of bread, for example. In simple terms, this would mean that a loaf made from pesticide heavy, GM wheat grown on a monoculture based farm in the US, would cost more to the UK consumer than would one made from organic wheat grown on a biodiverse farm in Suffolk.
Our current system would then effectively be turned on its head, ensuring that polluters in food production would be held accountable for the damage their practices cause. At the same time, it would mean that producers who support environmental and human health would be rewarded with tax breaks and exemption from polluters fees, while their produce would become more accessible and ultimately more profitable. Consumers would also be able to make more informed decisions about the products they buy, having a greater incentive to purchase the safer, healthier and cheaper products. True cost accounting is therefore a way of giving the environment and human health a presence and value within the economic system.
The term ‘externalities’ is used to describe environmental and human health costs currently not factored in to the price of products. An example of these would be the cost to the NHS of treating patients with obesity as a consequence of poor, modern-day diets. Further examples would be supermarket procurement practices that encourage large amounts of waste along the supply chain, or farming methods that require the subsequent clean up of water and ecosystems.
The Sustainable Food Trust (SFT) is working to promote true cost accounting in the food industry, and is also calling for more independent research to look at the nature of these externalities as well as how costs can be assigned to them. The purpose of this conference then was to raise the profile of true cost accounting, to bring together leaders and organisations in the field, and to explore ideas for action.
The list of speakers for the day was diverse and brilliant, and each one could easily have filled an entire morning with riveting stories, research results and plans of action. As it was, time was tight, but by presenting an array of fascinating perspectives the audience was definitely left wanting to find out more for themselves.
Patrick Holden opened the event by discussing the importance of stories to help connect us to our food cultures and embed our relationships to food. Prior to founding the SFT in 2011, Holden had been the director of the Soil Association for 15 years. I was particularly struck by the shift in his views about what is needed to effect change in the food industry. While he clearly still values organic farming, he now sees that all food systems need to be overhauled, and that focusing efforts on the small, organic food market alone was never going to be enough. He argues that work towards the latter was well intentioned, but naïve and overly optimistic. As a result, the focus of SFT is broader than that of the Soil Association, looking to cooperate not only with producers that are certified organic, but with all those using sustainable production methods.
Following Patrick Holden was a video message of support from Prince Charles, who had visited a workshop the day before but who was unable to be present at the Friday conference. Here is that video:
The Prince spoke of the impossibility of feeding the world on the back of weakening ecosystems. He argued that the crucial missing piece in today’s food industry is that the polluter is not held financially accountable, and that this needs to change. The Prince called for more research into finding ways of making ecological farming more profitable, and he ended on a note of cheerful optimism, saying that we do have the capacity to turn the current tide.
We then launched into the first session of the morning entitled Current Food Systems – The Hidden Costs. Professor Jules Pretty of Essex University, kicked off with his keynote address, The Need for Change. He discussed the growing awareness of the impact of farming externalities over the years since the so-called green revolution of the ‘50s and ‘60s. This led to the study conducted by Pretty and others in 1998 that attempted to calculate the cost of these externalities in the UK, (including wildlife damage, soil erosion, food poisoning etc) and the figure they arrived at was £2.4 billion per year – an amount that was in fact higher than the net income from farming at the time.
Pretty also acknowledged that this figure didn’t reflect the full extent of farming externalities – it didn’t for example, include the costs of pesticide-induced harm to human health, which would no doubt have added to the total quite considerably. It was nevertheless an important step towards assessing the true cost of food production, and Tim Lang’s study in 2005 built upon this, coining the term ‘food miles’ and exploring the costs of food transportation. The thrust of Pretty’s argument was that we need to increase yields in sustainable and small-scale agriculture. In doing so, we would protect our natural capital whilst ensuring the world’s population is well fed.
We often hear that we already produce enough to feed the entire world population, but the point illustrated by Pretty’s work on externalities, is that much of that food is produced in a way that is costly and harmful to ecosystems and human health. The focus, then, needs to be on increasing the yields of sustainable growing methods – whether through habitat design, agroforestry, mixed cropping techniques and others – to ensure not only that the environment is cared for, but also that people are eating nutritious, health-supporting foods.
Following Pretty’s keynote address were a series of short presentations by five other speakers. Professor Whendee Silver of the University of California at Berkeley, discussed the importance of locking carbon into the soil and asked whether agricultural practices can help to manage the carbon cycle so as to be part of the solution to rising CO2 levels. She argued that preserving grasslands, as carbon rich eco systems that cover 30% of the globe’s landmass, could be a way of off-setting the carbon we release into the atmosphere.
During the questions session later on, Silver also emphasised the power of word of mouth, saying that everyone at the conference was a communicator and we all have a responsibility to share stories and ideas gleaned from this conference to inspire curiosity and provoke debate.
Professor Tim Lang, of City University, followed with his discussion linking food policy and public health. Lang has been looking at the global burden of disease, focusing specifically on those diseases that are food related. He has estimated that the global costs of treatment for diabetes are approximately $1.7 trillion, that cardiovascular disease incurs $15.6 trillion and that cancer costs $8.3 trillion.
His point then, is that even if our food prices currently don’t reflect these health externalities, we are already paying for them through our taxes and our health care systems. Lang argues that we need to design our food system around ecological and public health, and that a dietary shift – away from the over-consumption of meat and towards plant-based diets – will support health and cost us less.
Next up was Peter Blom, Chief Executive of the Triodos Bank. Blom argued that our environmental, financial and social crises are connected by the practice of borrowing from the future instead of learning to build on the past, and that we need to rid ourselves of the illusion that over indebtedness is acceptable and that money will always be there. He identified three principles that would ensure environmental, social and financial success and that can be applied to any sector: transparency, sustainability and diversity.
Nadia Scialabba, the Senior Environment Officer from the FAO in Rome, then spoke about her work modelling low impact agriculture, for positive environmental impact. She discussed how organics currently internalise the external costs whereas conventional agriculture does not, and how this skews consumer choice and leaves little financial incentive for a shift to sustainable farming methods. And, in the current system, food prices have been so prohibitively high for millions, that it is unrealistic to expect them to pay the cost of natural resources on top of those prices. A new system is therefore necessary. Scialabba also emphasised the huge gap between knowledge and action – that numerous case studies exist proving sustainable methods can produce healthy yields etc, but that action is yet to follow in any meaningful way.
Lastly, Guillermo Castilieja of the Gordon and Betty Moore Foundation spoke about his conservation work in the Amazon, the role of funding organisations, and the need for collective, multi stakeholder action if we are to effect change in the food system. After a brief (organic, fair-trade) coffee break, the next session followed under the title of True Cost Accounting in Practice. This was where the idea of true cost accounting began to come alive for me, as we dug deeper into the realities of externality costs as well as the complexity of attributing costs.
Dr Pete Myers, the founder and CEO of the not-for-profit organisation Environmental Health Sciences, was the first to speak. The focus of his research is a matter close to my heart, and looks at the human health consequences of chemical contamination in our environment, particularly from agricultural pesticides and herbicides. This is an area that highlights the need for far more research into farming externalities, as Myers pointed out that only the tiniest amount of chemicals have been subjected to independent studies and only a fraction of studies currently connect the cause and effect of widespread chemical usage in our environment. Much headway has been made in recent years however, particularly in the field of epigenetics, exploring endocrine disruption as an effect of chemical exposure and how events in the womb play out over a person or animal’s lifetime.
Myers emphasised the point that low doses do matter, citing studies conducted on mice that show how the most minute traces of hormone disrupting chemicals can cause obesity. Worryingly, Myers also pointed out that the tools we currently use to assess what is safe in the chemical world, are deeply flawed and based on out of date science from the 1950s. I was thrilled that Myers was included in the line up though as I often feel this is a crucial, but much neglected and misunderstood area of the debate around food – one that does however, have an important role to play in the true cost accounting approach.
Nadia Scialabba then spoke once more about her FAO report, published earlier this year, that looked at the environmental impact of food waste along food chains across the world. This is the first, large-scale study of its kind into food waste and its findings are staggering. They calculated, for example, that the cost of food waste, based on producer prices, is $750 billion USD per year. The full summary of this report can be downloaded here.
Tristram Stuart, the food waste campaigner and founder of Feeding the 5k, next spoke on the same topic of food waste and the costs it incurs. He estimates that a 1/3 of all food produced is wasted, and calculates that if the land used to grow this food were simply left untouched, we would sequester 26 billion tons of carbon in its soil. Stuart is particularly keen on the idea of feeding food waste not fit for human consumption, to pigs. This is a practice currently banned by the EU, but one that he argues would be 67% more energy efficient than passing it through anaerobic digesters. Stuart also pointed out that food companies are so concerned about their brand image, that forcing them to internalise the cost of waste through a true cost accounting mechanism would have a dramatic, positive effect on their practices.
Adrian de Groot Ruiz, Executive Director or the organisation True Price, then took the stage to discuss the methodology of calculating the true cost of food products. Together with the SFT, True Price conducted a study on the price of coffee produced in Brazil, comparing true cost pricing of conventional and sustainable coffee products. They found that, by factoring in the cost of all externalities present in the production methods, a 250g pack of conventionally grown coffee (with a current retail price of $2) would have the true price of $5.17. By contrast, the true price of a 250g pack of sustainably produced coffee, was found to be $4.58.
De Groot Ruiz added though that as these sustainable methods improve in efficiency and yield, they estimate that the true price of the same pack of coffee could be reduced to $3.79 by 2018. This was a fascinating breakdown of how true cost accounting would work. The gap between current, cheap retail prices and true prices assigned to the more sustainable option, remains however. How this can be addressed in the context of increasing levels of food poverty around the globe, is an issue that was raised a number of times during the day and is one that clearly requires much careful research and attention.
Last to speak in this session was Helmy Abouleish, managing director of SEKEM, an organisation that works for sustainable development, community building and biodynamic farming in Egypt. I found his story particularly inspiring and he delivered it with passion and humour. Abouleish inherited the vision from his father of reclaiming desert soil, whilst also tackling social and economic challenges faced by Egyptian society. He quoted Mandela saying that ‘It always seems impossible until it is done’, and despite much scepticism, they have, since 1975, created communities and lush, productive farms in what was formally a barren desert. Abouleish explained that their focus on producing rich, nutritious compost and protecting the living soil, means they use 40% less water than their neighbours. The scale of their vision and extent of their achievements is quite staggering – do have a look at their website to get a full picture of the many projects they are engaged in.
By this point, my head was bulging with inspiration, and I spared a thought for the hard-working graphic designer, busy capturing the day’s highlights on a very long piece of paper running alongside the stage. Below is the first section of her work – I am hoping the full piece will be posted on the SFT website soon. Once this last session ended, off we all went to enjoy a delicious organic lunch that would sustain us through the afternoon.
The first session after lunch, Ecosystems and Food Systems: Valuing the Connection, began with a talk by Pavan Sukhdev of the global initiative, The Economics of Ecosystems and Biodiversity (TEEB). Sukhdev, an environmental economist, has been leading TEEB’s work to assess the value of what they refer to as ecosystem services – those mechanisms within our ecosystems upon which our economies depend. One example of this would be the crucial role that bees play as pollinators, and as Sukhdev pointed out, ‘No bee ever sent you an invoice’. That was my first favourite quote of the day. My second came later in his talk when he described externalities as ‘the biggest free lunch in the history of the world’. He described how, for example, the true costs of cattle ranching in South America are actually 18 times higher than the apparent costs.
TEEB also works to determine the cost of the loss of biodiversity and of environmental damage, and their aim is to ensure their findings are incorporated into decisions made by businesses and governments across the world. Sukhdev argued that the reason change isn’t happening on any grand scale is simply because the changes needed to protect our environment and health do not, in our current system, increase profit for corporations. He also referred to the work of the organisation Trucost, who are collecting data and attributing cost to the externalities produced by practices of the top 3000 global companies. In closing Sukhdev was keen to draw attention to TEEB’s recently initiated study on agriculture and food, a scoping workshop for which will be held in January 2014. See here for more information.
Following Sukhdev’s talk were three brief presentations by leaders in the field of conservation. Peter Seligmann, Chief Executive of Conservation International, began by focusing on the role of corporations and their relationship to conservation work. He was broadly optimistic about the shifts happening within corporations, which he saw as being driven by enlightened self-interest and a growing awareness of their own dependence upon the health of the environment. This elicited some scepticism from members of the audience, but Seligmann remained firm in his outlook as he spoke of the growing desire amongst corporations to act as partners with, rather than predators of, our ecosystems.
Ann Tutwiler of Biodiversity International then followed, with a stark picture of the rapid decline in biodiversity in recent years. She began by describing how of the 250,000 globally identified plant species, 7,000 of them have been used by humans throughout history, but now only 3 of these provide 60% of our total energy intake. Specific plant families tell a similar story: there are 3,000 varieties of the quinoa grain but we largely consume only 2; there are 1,000 varieties of banana but we mostly eat only one, known as the cavendish; and there are thousands of varieties of rice, but only a dozen are now widely grown.
Tutwiler pointed out that the regions of the globe that are rich in biodiversity also have high rates of poverty and that this is a precarious position to be in, as farmers struggling on the bread line won’t choose to conserve their ecosystems unless they have a perceived use for biodiverse species. Lastly, Tutwiler sited some fascinating research recently conducted in post-disaster zones in Central America, that found that those farms with greater biodiversity experienced only 50% loss of crops, as compared with the 100% losses experienced by conventional farms in the same areas. The biodiverse farms were also able to recover more quickly than their conventional counterparts.
Last to speak in this session was Mike Clarke, Chief Executive of the RSPB. Clarke also presented a bleak and shocking scenario, currently faced by bird populations around the world. He told us that since 1980, birds have been dying at a rate of 1 every 8 minutes. Many species are heading towards extinction, and Clarke gave the example of the turtle-dove which, according to current levels of decline, will be extinct within 7 years largely because of a decline of wild flowers. Clarke referred us to the brilliant publication entitled The State of the World’s Birdlife, which was launched earlier this year and is available to download here. He concluded by saying that the cost of a declining link between nature and human beings is too great, and that it is crucial that the SFT succeeds in making true cost accounting happen.
After a short break, we reconvened for the final session of the day: Testing the Proposition: Debate. A panel of five experts was gathered to discuss ideas and plans for action, and was comprised of the following:
- Peter Blom – Chief Executive of Triodos Bank
- Henry Robinson – Deputy President of the Country Land and Business Association
- Ellen Gustafson – Co-founder of Food Tank, USA
- Richard Mattison, Chief Executive of Trucost
- Patrick Holden – Chief Executive of SFT
John Humphrys of Radio 4 chaired the panel and opened the discussion with a flurry of media related (and food unrelated) jokes. I was hoping this session would be a fitting end to a rich, thought-provoking day; that it would be an opportunity to digest what we had learnt, and to identify, or at least begin to discuss, what steps would come next. It did seem though that Humphrys misjudged the mood at the conference – it had been buoyant, serious and determined – and instead, by unnecessarily and quite patronisingly grilling most people that spoke, he created one of antagonism and frustration.
As a result, most of the questions that came from the audience were attempts to defend organics, local food or the SFT vision, when instead it would have been more helpful to integrate lessons and ideas that had arisen in earlier sessions. That aside, the panel were robust in the face of Humphry’s interrogations, and Gustafson was particularly eloquent as she defended the need for affordable, healthy and safe food for all.
Having now digested the day, there are a few questions that remain for me. For one, there are clearly some externalities that are easier to quantify, in terms of cost, than others. We can be certain of the cost of a short term clean up job, but how would we establish the financial cost of child labour, life-threatening disease or the extinction of a native bird species? Complications of assigning costs arise not only because such externalities have multifaceted and complex consequences, but also in that there might be a danger of reducing what is invaluable – life and health – to a matter of economics. Reframing ecology in terms that policy makers understand may push the debate into political circles, but aren’t we then ignoring the sacredness and preciousness of the ecosystems that sustain us, and the value that they hold far beyond the market place?
A further question I have is around what would need to happen to make true cost accounting a reality. It would require support and commitment from policy makers if the market is to be restructured in such a way that protecting the environment becomes more financially profitable than damaging it. And I wonder whether being so reliant on the current system and the political will within it, could prevent the radical changes hoped for by the SFT. But I am still deeply excited about the SFT vision and am optimistic about their ability to realise it. Most of my optimism comes, I think, from the strength of feeling and collective dedication to this vision, displayed from so many sides of the food debate at this conference.
I am also particularly encouraged by the broadening of the definition of sustainability that was evident throughout many presentations and discussions – one that is concerned not only with the lowering of CO2 levels in the atmosphere, but includes also the need to protect our bird populations, to eliminate child labour, to support community cohesion, to prevent the use of pesticides that cause life-threatening diseases, to halt the destruction of virgin forests, to make affordable, nutritious food widely available, and to create an economic system that values all of the above.