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Thank big farms and chemicals for cheap food

Mick Keogh - Tuesday, March 08, 2016
The renewed interest in farming and how food is produced - stimulated by endless gourmet traveler and cooking shows on TV - is a positive development for the agriculture sector in Australia, bringing with it tourists, new customers, regional growth, investment, and even increased undergraduate enrollments in agriculture courses. But it also brings with it new risks for agriculture, that if not managed carefully could result in major disruptions and ultimately drive up the price of food.

For all the focus on farming and food that is now occurring in the media, much of it is directed at rustic and small-scale farm enterprises, and especially those that have adopted natural or organic production systems. While these farm enterprises are extremely valuable in attracting tourism and providing a different lifestyle for jaded city-dwellers, the vast majority of them only produce minimal volumes of food and fibre, and make only a minor contribution to total agricultural output.

A reminder of this fact was provided by ABARES in a presentation at the annual Agricultural Outlook conference in Canberra, at which the following graph was displayed. It shows that the largest 20% of Australian farms (those in decile 9 and 10 of farm sizes) produce in excess of 75% of total output, while the smallest 20% (decile 1 and 2)only produce about 5% of total output. 

This highlights pretty clearly that, without the largest 20% of farms - those often categorised as "Big Agriculture" or industrial agriculture, the price of food would certainly be much higher than it is at present.

A second fairly sharp reminder about key factors in the success of modern agriculture in feeding the world was provided during a visit to a restaurant strip close to Bondi Beach, which has undergone a major transformation over recent years with the emergence of all manner of different types of restaurants and food outlets. Right in the middle is a fairly upmarket food supermarket, and in pride of place was the fresh egg section. Those not from some of Australia's trendier and more upmarket suburbs might be surprised to learn that the prices for eggs started from $3.49 for Barn-laid conventional eggs, and ranged up to $10.19 for organic free range eggs, as the following picture shows.



There is nothing wrong with this range of eggs being available, or the fact that some farmers opt for organic or natural production systems, rather than more conventional production practices. Some consumers clearly want to have this range of choices available, or the retailer would simply stick with ordinary old cage eggs at $2.80 per dozen. 

However, if it is assumed that the market for each of these egg categories is reasonably competitive, then the range of prices on display provides a pretty good indication of the additional costs involved in organic production, rather than the use of conventional agricultural and veterinary chemicals. This provides a sharp reminder that in the absence of modern agricultural and veterinary chemicals, the cost of food would be much, much higher than it is at present, and the task of feeding 7 billion people would consume considerably more of the earths natural resources.

The emerging risk for agriculture (and for most of the world's food consumers who cannot afford $10 per dozen eggs) is that the community's new found fascination with a rustic version of farming will drive attitudes and policies that oppose modern farming technologies, and unnecessarily restrict the use of safe and effective agricultural and veterinary chemicals. The longer-term consequences of these attitudes will be reduced agricultural productivity and ultimately higher food prices.

Every now and then there is a need to remind consumers that the real reason that food is more affordable and plentiful than it has ever been in history is due to "Big Agriculture" and multi-national agrichemical companies!
 
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