Sunday, December 10, 2006

The Economist on how ethical food isn't

Local food, organic food and fairtrade food. They all sound good don't they? They are part of the mantra of the Greens. The idea behind each of them is:
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Local food is "better for the environment" because transport is "bad" for the environment, and it also appeals to the inherent positive communitarianism of the Greens, and the socialist xenophobia;
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Organic food is "better for the environment" and "healthier" for you because it doesn't involve "artificial chemicals" (because, apparently, natural ones are benign, you know, like snake venom) and it is better for the environment because of it; and
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Fairtrade products are "better for society" because you are paying a lot more for a commodity, ensuring the producers in developing countries get more money and be wealthier. In other words, it is about paying people on very low incomes more for what you buy off them.
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In the childlike world of simple platitudes this all sounds very good and plausible. In fact, as the Economist reports this week with its cover article, most of this is about feeling good, rather than doing something constructive. When examined more closely, applying any one of the "local food, organic food, fairtrade" labels to something may either be a waste of money, or worse, counterproductive to what you actually want to achieve.
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The local food argument has already been blown out of the water by the Lincoln University study and a separate report by the UK Department for Environment, Food and Rural Affairs which also says that there is less environmental impact importing tomatoes from Spain during winter, than growing them in heated greenhouses in Britain, and that half of the UK food vehicle miles are consumers driving to and from shops. This means it is better for food to be distributed from large supermarkets than people driving further to multiple smaller retailers. The NZ Greens have thankfully taken these finding and have written to their UK counterparts. So the local food argument is extremely dodgy, not helped by the massive protectionism for European agriculture under the Common Agricultural Policy. Removing this distortion would do far more for the environment (and lower food costs, and taxes in Europe) than any campaign for food miles, which is actually counter productive. Quite simply, the local food argument is a combination of misguided environmentalists and old fashioned trade protectionists. The UK farm lobby is in favour of it for old fashioned reasons, it helps them keep their prices up because people think they are helping the environment, when, much of the time, they are doing the opposite. You see, transport costs are only a small proportion of the energy used in food production.
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However, while the NZ Greens appreciate this, they remain wedded to the latest money making enterprise of the food industry - organic food. The Economist quotes a number of researchers who counter claims that organic food is better for the environment. These come down to:
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- Organic farming produces lower yields and requires much more land to be cultivated to produce the same amount of food. Dr. Norman Borlaug, an agricultural scientist, argues that environmentalists argue from the comfort of living in prosperity and is quoted saying "If they lived just one month amid the misery of the developing world, as I have for fifty years, they'd be crying out for tractors and fertilizer and irrigation canals and be outraged that fashionable elitists back home were trying to deny them these things". He points to how global cereal production tripled between 1950 and 2000, but the land used increased by only 10%;
- Anthony Trewavas of Edinburgh University argues that organic farming uses more energy, because instead of fertiliser and pesticides, weeds are kept at bay by frequent ploughing and other energy intensive techniques;
- There is no evidence that organic foods are healthier or non-organic are less healthy.
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Organic food may, at best, be a good choice on the basis of taste and quality. Certain foods may be tastier and more enjoyable because of how they are produced. However, this is not simply an organic matter. Indeed there are big differences between non-organic food produced in Europe and that produced in Australia and New Zealand in some cases, if simply because subsidies in Europe encourage far greater use of fertilisers and pesticides than down under. Nevertheless, it is also clear that the word "organic" has become a useful tool for food sellers wanting to put a premium on their products based on perception rather than reality.
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Fairtrade food is a bigger con. While sometimes local food may make sense, and sometimes organic food may be more enjoyable, fair trade is entirely counterproductive.
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The concern is that low prices are "unfair". Well they are not. Low prices exist because not enough of a product is being sold compared to what is being produced. They are a signal to stop production and move to something more profitable. Fairtrade buyers guarantee price floors for producers and pay a guaranteed premium over the market price with the benevolent notion of encouraging producers to develop their families and communities. Unfortunately it also perpetuates production and may increase production of commodities that are already oversupplied. If Fairtrade coffee demand increases, more will be produced, reducing the price for the rest of the coffee market making those producers poorer. The fundamental problem is that too much coffee is being grown - paying more for it EXACERBATES that. It is basic economics. Some argue that the high price enables them to fund diversification, but the Economist points out that there is hardly much incentive to diversify away from something paying you such a premium!
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Fairtrade certification also often is available to small co-operative producers, not family owned firms or plantations because the certifiers can't guarantee the workers get the premium. In other words, it is also about changing the corporate form of producers, which may shut out many workers who cannot afford to get into a co-operative (the most poor).
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However, the biggest argument is that it is wasteful. Fairtrade retailers see buyers as premium purchasers prepared to pay extra, when one economist calculates that 10% of the premium paid for Fairtrade coffee gets to the producer, as everyone else in the chain gets their cut. People pay more for it so those selling take advantage of it - meaning, of course, there is less money available for people to spend on other goods and services.
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There is room to do more research on this, but it is clear that the words "organic" and "fairtrade" are potentially a major ripoff of consumers that does little for what is claimed. They are not necessarily healthier and does not benefit the environment, or producers in poor countries - as it encourages them to produce more of what people don't want. It is economics rubbing against good intentions, and as is almost always the case, non-evidence based slogans might make you feel good, but they wont do you, your wallet, the environment or the world any good.

10 comments:

leelion said...

Good post. There's a trendy coffee shop in Auckland with a trendy owner who is very very big on "fair trade coffee" blah blah blah.

He's a really nice guy, full of enthusiasm and wit, and we get on well but I'm wondering whether to tell him that I believe his overt "fair trade" promotion is socialist bollocks...hmmm.

Reminds of that classic quote from T.S. Elliot:

"Half the harm that is done in this world is due to people who want to feel important. They don't mean to do harm -- but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves."

uk_kiwi said...

Interesting topic, go the Economist.

Organic veges are a bit of a scam for sure, most pesticides applied in the OECD are pretty safe these days (not sure about those Chinese produce though!) but hey, if someone wants to spend a little more for a percieved benefit, then that's just marketing / capitalism in action! If someone feels healthier as a result, well they probably are. And fertilizer runoff is reduced into the bargain.

As for Fair Trade, I imagine that's the same thing- the percieved benefit is that you are helping someone who would otherwise be at the mercy of the coffee cartels, never mind that the coffee oversupply and low price is partially due to international aid programmes!

Swings and roundabouts...

libertyscott said...

Quite right uk_kiwi, people can buy organic if they wish - just like many buy snakeoil "natural remedies" some of which are good, most of which are inert, and a few are toxic.

It does show there are better ways of helping those in developing countries.

Rachel said...

How old are you?

Freedom food etc is a perennial win-win concept. Consumers can engage in feel-good shopping. And, from a business standpoint, companies make money. That is capitalism if you hadn't noticed.

Don't expect you will be CEO any time soon.

libertyscott said...

My age is irrelevant, and when you end the post with a shrouded insult you don't deserve a response to the question.

I am not saying government should act, but first:
- the local food argument is about protectionism which is NOT freedom or capitalism;
- organic food is fine if people want it, but it is a lie to claim extraordinary health benefits or environmental benefits. Also some advocates of organic food want the state to give it advantages or disadvantage non-organic food. Capitalism is not the right to make money out of fraud;
- fairtrade products are downright destructive of those they claim to assist. Again, while many make money out of people with these products, it is a lie to claim the markup is helping poor people. Remember also that many in fairtrade see it as an anti-free trade movement.

That is why it matters. If people pushed all of these in the context of free trade, then it would mean choices are being made in a more even handed way.

I don't care if people pay a fortune for some food, but i object strongly to sanctimonious twats telling me that buying local organic produce is better for me and the environment when, often, it is the opposite.

James said...

Rachel.....are you a tennis fan? cos you just got served girlfriend! ;-0

Graham Keal said...

I'm reseraching an article about Fairtrade so this debate raises very interesting questions and the initial artcle raises valid concerns, but there are counter arguments and the determinedly right-wing stance does not always convince. If it is "a lie" that Fair trade helps poor people, how will you convince the man or woman who can afford to educate their children or access clean water because of improvements paid for from the Fairtrade dividend?

Re organics, it may be that the increased incidence of cancers in developed countries is unconnected with toxic residues left in foods. Personally, I'd rather eat organic when I can and pay a small premium now rather than find out 30 years on that there is a connection and I've left it too late. This year I grew organic runner beans from last year's seed. Cost, nil. Food miles nil. And they tasted marvellous.

Oliver Rowe said...

Whilst I feel that the fairtrade debate is more turgid, it is clear that there are farmers being exploited in a way that we, the consumers, would like to find a way to change, maybe the 'fairtrade' process in it's current form isn't the best way to go about it. But I feel that you, claiming as you do to know something about these things, should apply that to moving the debate on, rather than taking pot shots at those who, from a very distant, and seemingly powerless perspective, are, in a rather wooley kind of way, trying to help.

It seems this is your preferred mode of thought however, and seems to suit your readers (see James' post 12/12/06 referring to Rachel's 12/12/06) so I doubt you will do much to affect any change.

You don't seem to be able to engage in the economist's story sufficiently to grasp the idea that it has, as you and I do, it's own political agenda. We all know that 83.2% of statistics are false and the 24.6% that remain are easily manipulated. The Lincoln report is not nearly as level headed as it seems, and as Tom Philpott's article in Grist.org points out there is a drive to create an environment for changes that will hopefully create long-term solutions to the problems that are causing concern on a global scale. (I do think it interesting however, that he didn't tackle the fairtrade side of the Economist rant).

I'm not a tree hugger, or an eco warrior. But I have a sensible level of concern for the environment. I have a strong, vested interest in locally produced food, and would dearly love to see a more energy and economy efficient way of going about getting hold of it. My main drive is seasonality and it's resultant awareness of local and remote diversity, but I also enjoy engaging with food and food communities on a local and reachable scale. If this can lead to a positive impact on the environment in the long term then that simply reinforces my feeling that it's the best way to go about things.

libertyscott said...

Graham: You said "If it is "a lie" that Fair trade helps poor people, how will you convince the man or woman who can afford to educate their children or access clean water because of improvements paid for from the Fairtrade dividend?"

Well, the question is whether it is better to fund this through aid or through encouraging them to produce an oversupplied commodity (indicated by the low price). It isn't sustainable in my view to keep doing this. Remember also that much of the fairtrade dividend is pocketed by all those along the way hiking up prices because they know the customers are less price sensitive.

Good on you for growing your own. I buy organics sometimes as a matter of taste, which of course makes sense, because sometimes organic food is produced by those who are quality focused.

Oliver: "it is clear that there are farmers being exploited in a way that we, the consumers, would like to find a way to change" yes and more specifically ones in places like New Zealand and Thailand who are efficient producers facing subsidised and protected producers in Europe, Japan and the USA, among others. If you mean coffee producers, explain how they are being exploited? What alternative opportunities are available to them? Having a low price is the best way to dissuade them from producing and doing something else with the land - and if you want to support charities that help with that, then fine.

I know people are trying to help and care, but you know the "road to hell is paved with good intentions", and it is about time that the intellectual robustness of these approaches was examined, rather than the woolly headed leftwing guilt trip that childishly aims to "do good", but can do the opposite.

I agree that if people respected seasonality it would be the most helpful difference that could be made - and for me it is a quality matter as well. However the food debate cannot ignore the absolute bastardisation of the food industry from the Common Agricultural Policy and its equivalents in Japan, USA et al. Some food produced locally in Britain has a lower environmental/energy impact that food produced elsewhere, some produced in NZ does - but it is all hidden in subsidies, quotas and protectionism.

My agenda is just that people pay the cost of producing and shipping the food to them - the price of some foods will rise, others fall - but nobody should pretend that the food market in Europe is efficient or geared towards environmental outcomes - it is wasteful, inefficient, environmentally and socially disastrous, on a global scale.

Ken said...

The demise of Science...which is to have no "agenda". The Economist web site, brought to you by...small organic farmers...no, Royal Bank of Scotland.

There seem to be LOTS of bad assumptions here...that "Victory Gardens", personal or neighborhood scale are not possible, that all shopping trips have to be petrol powered, that all local, organic produce is only available from "small, specialized, out of the way" markets...

Odd, too, "intellectuals" demanding proof that foods free of deadly poisons grown on real soil rather than NPK fertilizer are better.

How would one calculate, say the costs of the U.S. entanglement in Iraq into the cost of food production? How about the cost of obesity due in part to propaganda and subsidies from governments to the meat and dairy industries?

Who benefits from systemic illness and physical dysfunction such as we have in the U.S.? Any wonder, then, that eating real food like our grandparents took for granted is not a priority?