Economics Of 'Commodity Farming' Vs 'Relocalisation'

[Jez]

Great article (and sub-links) which demonstrates how export 'commodity farming' effectively economically bankrupts rural production areas, while by contrast, 'relocalisation' and shifting even just part of the area's production towards growing for local markets, would assist in balancing the ledger back in their favour.

Obviously there is only so much land and resources available for production - and other factors need to be taken into account, but the raw data is compelling reading...especially when we factor in better practice leading to reduced inputs etc:

Meter's work shows that commodity farming, rather than building wealth, extracts money from rural communities. In a seven-county region of southeastern Minnesota in 1997, farmers brought in an impressive $866 million selling their wares. However, amazingly, they incurred $947 million in costs to do so -- a loss of a cool $80 million. Federal subsidies covered just half of that loss; the rest had to be made up by non-farming activities.

Moreover, nearly half of the $947 million in incurred expenses left the area, as payments to distant suppliers of seeds, fertilizer, and pesticides, or to banks in the form of interest.

Meanwhile, though, the seven-county region's 120,000 households were busily buying food and eating it. Meter reckons that southeastern Minnesotans were spending $500 million on food annually -- and only $2 million of it on fare grown within the region. Yet if they could manage to buy just 20 percent of their food from nearby growers, that would amount to $100 million in additional sales for the region's farms, more than wiping out their $80 million loss in 1997.

In case study after case study (click to view) -- not only in the Midwest, but also in farming-intensive areas in California, Arizona, and the Southeast -- Meter teases out similar scenarios. Farming for distant commodity markets sucks resources out of communities, and residents of those communities spend heavily on food from outside. He doesn't suggest that such regions turn insular and stop supplying or buying from outside markets; just that they consume a much higher portion of their food output locally.


Full article available here (click to view)

[gnoll110]

What if the Midwest stopped trying to feed the world and started focusing on itself?

I do so love the opening line of "Bread Basket Case", by Tom Philpott.

It's no surprise that the same message and mantra that has driven Australia farming since WWII has been at work in the US.

And what is that mantra, "You got to grow more food or we'll all stave!".

Farmers don't just act on there own. They, like the rest of us, largely take their cues from their surroundings.

Such efforts are important, and point to a way forward for revitalizing farm economies in the Midwest and in other farming regions. Yet they may not be enough to remedy 50 years of disinvestment in local-food infrastructure. In the Midwest, the built environment -- grain elevators, freight networks -- has been carefully rigged to accommodate mass production of a few inedible commodity crops.

In The Omnivore's Dilemma, Michael Pollan asked the renegade Iowa farmer George Naylor why he kept growing commodity crops despite the ruinous economics. His reply is worth noting: "We've got a long-term investment in growing corn and soybeans; the elevator is the only buyer in town, and the elevator only pays me for corn and soybeans. The market is telling me to grow corn and soybeans, period."

Indeed, there are many cases of governments resuming parts of leases where the government felt that the farmer had not cleared enough land. The resumed land was used to start new farms, often by ballot. This meant that some farms were not viable, even before the current wave of consolidation began in the 70's.

So next time you see what you consider to be bad practice (over cleared land, over glazing, etc), don't just blame the farmer. It's also the product of time and place.

[Jez]

Good points Gnoll - similar scenario to banning rainwater tanks in the suburbs eh? Legislation helping to usher in bad practice.

I'm sure as you say, the article has a lot of relevance to Australia as we have followed the same path as US farmers.

Be very interesting to see similar studies done for Australian regions - but you'd have to suspect the result would be practically identical.

[gnoll110]

similar scenario to banning rainwater tanks in the suburbs eh? Legislation helping to usher in bad practice.

I know that it's only about 15 years ago that rainwater tanks stopped being illegal in suburban Canberra. I knew someone who tried to have on put in, in the early 90's. She still couldn't put it in the front yard (with screening). She wanted it there, so that it didn't take space in her permaculture back garden.

Be very interesting to see similar studies done for Australian regions - but you'd have to suspect the result would be practically identical.

Last night as I read the linked info, I was asking myself those questions. Questions like where to get the data, how to cluster (local governments) areas etc.

[Jez]

I know that it's only about 15 years ago that rainwater tanks stopped being illegal in suburban Canberra.

It's only recently been lifted in most urban parts of Queensland hasn't it Gnoll?

Last night as I read the linked info, I was asking myself those questions. Questions like where to get the data, how to cluster (local governments) areas etc.

Don't know whether you could collate all the data without doing a dedicated study...especially when you consider how many rural Australians travel well outside their local area to do 'big shops' - including groceries. Certainly export figures would be easy to come by...but input costs and local food expenditure could be tricky.

[gnoll110]

I know that it's only about 15 years ago that rainwater tanks stopped being illegal in suburban Canberra.

It's only recently been lifted in most urban parts of Queensland hasn't it Gnoll?

Don't know, never lived in Urban Queensland (except while living away from home for education). As the biline says, still a Queenslander working down south!

Last night as I read the linked info, I was asking myself those questions. Questions like where to get the data, how to cluster (local governments) areas etc.

Don't know whether you could collate all the data without doing a dedicated study...especially when you consider how many rural Australians travel well outside their local area to do 'big shops' - including groceries. Certainly export figures would be easy to come by...but input costs and local food expenditure could be tricky.

Yer, some of the data would be tricky.

Wouldn't where you go for your 'big shop' define local? Then there is Telstra's definition of local, that is that small that in some places it does not include any grocery shops! The population base needed to support some important functions/businesses means regular 3 hour drives to get to a 'big shop' town, hence my question about 'how to cluster (local governments) areas?'. Welcome to the Tyranny of Distance.

If you where basing a study on Toowoomba, how far west would you go? Charlton, Oakey, Dalby, Tara or Birdsville?

For me, mushrooms grown in Toowoomba would be as local as those grown in say Tara. "Alien" mushrooms are those trucked from Victoria or the cans that says "Made in Australia. From Imported or Local Ingredients" or "Product of Thailand".

It raises the question of what 'local' and 'bioregion' mean. Are these studies about local areas (the closet schools, shops, GPs, PO, Police Station)? Or regions, that is, an area that includes things like the nearest Uni, medical specialists, Hospital with an ICU etc.


I think they where regional studies, areas of several local government areas or a local government area that included a city large enough to have a Uni, major hospital etc. (remember the US has a four tier government system(?), were Australia has a three tier system).

Gnoll110

[Jez]

The studies are of county areas Gnoll - and US county areas are generally pretty small...even in Texas. :lol:

Just as an example of shopping habits, the place we're moving to when this house sells, the people there often seem to take say a monthly trip to Atherton or Cairns for shopping, while others that have high school age kids boarding in Townsville would probably incorporate a shopping trip into picking up or dropping off the kids.

So even with North Queensland's huge electoral zones, I think that covers three of them!

Also a good example of why inland rural areas need to become more self-sufficient in the coming age of fuel price hikes and shortages...though already car pooling or taking shopping lists for friends on these trips is becoming fairly common I think.