In last week's Victual Reality, I took Alice Waters and Michael Pollan to task for praising recent hikes in industrial food prices as a prod for promoting sustainable agriculture.
"Higher food prices level the playing field for sustainable food that doesn't rely on fossil fuels," Pollan told The New York Times. Not likely so, I argued.
I should have emphasized more how much these two icons have done to advance sustainable agriculture in the United States -- and to advance my own education. (I've written about Pollan here and here; and Waters here, here, here, and here.)
And when I used the example of improving school lunches as the kind of thing that Waters and Pollan should be advocating for, I should have noted that Waters is a long-time champion of transforming school lunches. In fact, I quoted Ann Cooper, the "renegade lunch lady" on mission to bring real food into school cafeterias, without noting that Waters' Chez Panisse Foundation pays part of Cooper's salary.
So I criticize Waters and Pollan from a position of great respect. However, I still find their notion that higher industrial-food prices will automatically boost the fortunes of sustainable agriculture quite wrong. Here's why.
In my Victual Reality piece, I argued that higher prices for food commodities could actually bolster fast-food giants, which ...
... can likely absorb higher input prices and still churn out crap -- and rake in profits. If that's true, prices at the drive-thru won't rise quite as steeply as those in the supermarket line, giving people yet more incentive to abandon their home kitchens and flock to the Golden Arches.
As if on cue, a Wall Street Journal interview with Burger King CEO John Chidsey unearths this choice nugget:
If you look in the fast-food hamburger space, it is unfortunate for the greater economy as a whole, but we benefit from the pressure people feel from a disposable-income standpoint. People who cannot afford to go to Applebee's, cannot afford to go to Chili's, we are the beneficiaries of that squeeze. It's very hard for me to imagine that the economy could ever get so bad that somebody could not afford to go buy a Double Cheeseburger from McDonald's or a Whopper Jr. from us for $1. If you go to the grocery store, I really challenge you to find something for under $1.
Burger King, you might remember, is the firm whose penny-pinching intrangisence is forcing poverty wages on thousands of Florida tomato pickers. I guess driving a hard bargain with suppliers (i.e., farmers) is profitable in more ways than one.
Then I came across this gem, from FoodProductionDaily.com:
As with other animal produce, egg prices have increased in the past year as a result of higher costs for grain. This presents food formulators with a quandary. Eggs are important to provide structure and texture in a number of food categories -- yet the higher costs are putting pressure on their margins. While food manufacturers can pass on some of the costs, this is not possible for all. Some firms are taking a long hard look at formulations, to see whether they can use cheaper, alternative ingredients to achieve the same results.
"Cheaper, alternative ingredients," eh? Like what? Seems that a company bearing the ominous name of "Gum Technologies" has come out with a weird goop consisting of carrageenan and locust bean gum designed to replace eggs in industrial baked goods. In fact, the company has developed no fewer than "three blends which it says can mean a reduction or elimination of eggs without compromising the sensory properties of the finished product."
Never mind that carrageenan, an industrially processed seaweed derivative, has been pretty definitively linked to colon cancer. For food manufacturers, here's the important bit: the company claims its product can "help cut production costs and increase your profit margin."
For me, the bottom line is this: industrial food purveyors, whether they be processors like Kraft or fast-food giants like Burger King, will use any means necessary to absorb higher input costs and preserve their share of the U.S. market.
Higher commodity prices, alone, won't bring sustainably grown, healthy food to the masses.
Comments
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Sean Casten Posted 5:00 am
07 Apr 2008
I get it, but...
...it seems to me like the broader community that criticizes agriculture is trying to have it both ways. (This is a criticism of the community, not of this post, or Tom P. in particular.) When food was cheap, farmers couldn't make mortgage payments and farms were being consolidated into agro-giants, many (including Pollan) criticized a system in which it didn't pay to farm. Now, as food prices have increased, we criticize agribusiness for running prices up (see: Mexican tortilla riots), shifting our empathetic focus from the producer to the consumer.
I'm not suggesting that high corn prices are a panacea, nor even that I am smart enough to understand the economics of agriculture. But it does seem to me that there is a valid point to be made about the impact of food prices on the economics of farming, and that at least within that framework, there are benefits from expensive food.
It is perhaps an overly semantic point, but one that bears repeating - namely, that low prices are good for buyers, high prices are good for sellers, and there is no price at which nobody wins.
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sindark Posted 5:06 am
07 Apr 2008
Don't forget about land
Higher land prices, resulting from increased biofuel cultivation, could also make new non-intensive farms more difficult to establish.
a sibilant intake of breath
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Maywa Montenegro Posted 5:31 am
07 Apr 2008
The hidden costs of food
I thought your column last week was excellent--and not overly critical of either Pollan or Waters, although I'm sure they appreciate your attempt this week to emphasize their huge contributions to the sustainable foods movement.
One point I'd add to your original piece: The answer to our current food conundrum you said, "is to make sustainable food more broadly accessible and affordable," with initiatives like Washington state's vegetable snack program.
Another "answer" might be to underscore that industrial food--no matter how cheap--comes loaded with a number of hidden costs. Not only is this in the difficult-to-quantify form of damage to the environment: the phosphate mining, agrichemical pollution, and dead zones you mention. It is also the explicit health costs associated with industrial-style eating: The dollars we may save at the drive-thru window we end up paying (often many times over) at the doctor, when obesity, diabetes, and various other ailments of the overfed set in.
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Jason D Scorse Posted 1:23 pm
07 Apr 2008
Tom....
I agree with you 90%. But I also think that a lot of people- poor and rich- spend a lot of money on useless garbage and not enough on their own health. Many poor people can't afford organic food, but many can but instead choose to spend their money on other things. I was low income for a good portion of my life and went without a car, a cell phone, a new computer, new clothes, a new tv, but never skimped on food. It's both a matter of priorities and price.
I teach environmental economics and blog at www.voicesofreason.info.
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Ron Steenblik Posted 4:51 pm
07 Apr 2008
Tom is right, Pollan is not
I, too, very much respect Michael Pollan. (I'm not so familiar with the works of Alice Waters, though it sounds as if she's doing good stuff, too.) But I fail to see why high commodity prices help producers of sustainable agriculture.
Sure, high prices means that, all else equal, higher-cost producers have more of a chance of covering their cost. But, as sindark puts it, "don't forget about the land". Prices for commodities (especially wheat, corn and soybeans) that more than cover costs generate what economists call "rents", which then are reflected in the price and rental charges of farmland. (In Iowa, for example, average land values for farmland have more than doubled since 2000, and approached $4,000 per acre in 2007.) And, since sustainable or organic agriculture is land-intensive, as opposed to chemically intensive, that drives up their costs disproportionally.
Several months ago, I posted a link to an article about a group of Hmong farmers who were finding it increasingly difficult to be able to make the rental payments on land they had rented from a local corn farmer, and which they were using to grow organic vegetables for sale to local markets. The article is no longer available, but here is an exerpt from my posting:
(I presume the writer meant, "even though, prior to the ethanol boom, their farms WERE three times more profitable than a typical Minnesota farm.")
Partially offsetting the rising cost of land, perhaps, is the rising cost for synthetic fertilizers. But the markets for all fertilizers are connected, so any organic farmer looking for horse manure, say, is also facing higher input prices.
Finally, as illustrated by Tom's example, rising food prices eat into household disposable incomes. Many, if not most, people put calories first, taste and the sustainability of how their food has been produced second. All else equal, thus, sharply higher food prices favour consumption of the cheapest food items.
These are only my personal opinions.
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caniscandida Posted 6:03 pm
07 Apr 2008
ah!, la poesie!
TP wrote:
<<
Pollan here and here; and Waters here, here, here, and here.
>>
How doth the humble Bumblebee
Bend forth from Flow'r to Flow'r,
And pick the Pollen here and here,
With no Thought of the Hour!
As well the tender Crocodile
Pluck'th Fishes without Fear,
From midst the Waters of the Nile,
Here, here, and here, and here!
Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.
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algertz Posted 10:27 pm
07 Apr 2008
economic misunderstanding
You're confusing 2 economic effects: an income effect and a substitution effect. You're absolutely right that the worsening of the economy and the overall rise in food prices will likely encourage Americans to choose cheaper, lower quality food options. But there is also a substitution effect. As the price of industrial food rises, as it will continue to do with rising demand for corn and oil prices, the price of local, organic, sustainably grown food is cheaper by comparison, leading consumers to consume more of it. To tell which of these effects will be greater, ie whether higher food prices increase the percentage of their diet that Americans get from sustainably grown, local food, we would need to know more about the market.
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Ron Steenblik Posted 7:17 am
08 Apr 2008
Are you sure?
Al Gertz: you don't say whether your comments are addressed to Tom or me, but we (or at least I) did not confuse the two economic effects. Rather, I doubt that substitution effect is very strong, given that prices of arable land are rising (and organic, sustainably grown food tends to be require more land than industrial food), and even the price of manure is starting to rise. ("Manure has been relatively cheap compared to fertilizer but with fertilizer prices increasing, the price for manure has gone up as well ... ", according to Rob Kallenbach, University of Missouri Extension forages specialist.) There are even power plants running on manure.
I agree, however, that higher petroleum prices should favour local produce, all else equal.
These are only my personal opinions.
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