Commodity supercycles, Windup Girls and Family Farms

Commodity supercycles, Windup Girls and Family Farms

In our SRI portfolios, we screen companies and industries for those actors who run sustainable businesses. Their usage of resources and fulfillment of broader responsibility counts as much as their financial prospects.  Ocassionally, we step back from our narrow interests in a specific company or industry to look at the broader picture.

We did that recently while reviewing the latest quarterly letter from Jeremy Grantham at GMO. In a note last year, Grantham had highlighted the impact that intensive conventional farming practices can have on the quality of soil. Healthy soil takes many, many decades to develop and the intensive use of pesticides and fertilizers can destroy microbial life in topsoil. Once that happens, it requires a continual regimen of fertilizers to make the land productive.  Intensive commercial farming techniques have killed life in the top soil, and this will have a long-term impact.

Those who’ve read Michael Pollan’s Omnivore’s Dilemma might remember the section on Polyface Farms. Pollan describes Salatin’s effort to rescue a ravaged industrially farmed tract using a complex crop and animal rotation regimen. It requires prodigious  knowledge of the local environment and intellectual rigor on the part of the farmer. The level of effort is a couple of magnitudes greater than that required to flood a field with fertilizers, pesticides and irrigation.

If intensive, fertilizer based farming permanently damages our agricultural production, this will have long-range impact for us. What does the steady depletion of our ability to produce food mean for the economy and our race? The first impact will be felt by the world’s poor, who will be priced out of food. This would lead to a rush to accumulate scarce resources and political unrest, possibly more revolutions like those we are seeing in the middle east.  Since the industrial revolution, the effort we have expended to raise crops and feed ourselves has steadily declined.  In the mid-1800s, fully three-quarters of all American workers lived and labored on farms, that number is under 3% today.  The story of progress in the 20th century has to a large extent been driven by the unshackling of vast numbers from the plough. A world where more human effort is required to raise the same amount of food would be one with lower growth, fewer advances and less comfort.

While, we’ve been thinking about these big trends, we’ve been following the Olympics, and the incessant ads reminding us that “luck” had no role to play in the success of any athlete. The truth, however, is that luck plays a large role. Most of the successful olympic athletes were lucky to be born into families or in nations where they were assured a consistently high caloric intake, access to a top-notch training program, and institutional support from their countries and employers. Meanwhile, many, many people in poorer parts of the world will never have that opportunity. The lottery of birth is truly amazing.

Life occasionally imitates art. For a dystopian vision of where intensive commercial farming and climate change might lead us we would recommend reading The Windup Girl, Paolo Bacigalupi’s richly imagined novel about a world ravaged by climate change, genetic modification and crop failures. Robert Heinlein’s book, The Moon is a Harsh Mistress tackles similar topics, from the standpoint of a colony on the moon. Of course, our salvation may lie in the exploration of our solar system, which is rich in resources. But the space program has been as underfunded as investment in training farmers to use organic practices.

 

Comments are closed.