Tag: e-book

How agroecology could save the government billions

Since Labour came in to power, Rachel Reeves has been under pressure to close a £22 billion hole in the budget. In early March this year, the government stopped any new applications to the Sustainable Farming Incentive (SFI). This left would-be ecological farmers in the lurch, their plans to sow wildflowers, apply green manures, and build hedgerows abandoned amidst a funding crisis. The scheme is under review. But should politicians view nature friendly farming as an investment, rather than spending?

Unlike most other government spending, the SFI could produce a return. Payments to farmers to use less chemicals and create more habitats for nature means the food that they produce is often organic. Organic food prices are too high because supply does not meet demand. More organci food means that markets in organic food will grow. Greater consumption of organic food means greater health and wellbeing and less health costs to the NHS. In 10,000BC I present the potential savings to the NHS and wider society that could be created through a real food economy. Poor diet costs the UK around £75 billion every year, which means the government could afford to spend £15 billion and gain a return on investment of 5 to 1. 

How would we spend the money? More farmers would be encouraged to embrace ecological farming and farmers would be paid to engage with their customers. Ecological farmers embrace diversity as a way to outwit pests and disease; a diverse planting plan means a diverse diet. Investment in leadership and entreprenuerial talent in the organic sector with support for more mainstream organic brands would help to break the luxury, high end association with organic foodstuffs. Tax breaks on organic farm income would support organic farmers further. Equity relief would encourage investment in organic farming. Under the SFI there would be a longer conversion period of ten years, rather than two, for conventional farms to transition to certified organic, allowing for organic yields to match conventional. Organic certification would be funded. Academic research into plant guilds and livestock would develop organic varieties. Marketing costs and direct sales schemes could also attract funding. TV advertising, billboards, signage in supermarkets, free tasters, community cooking classes, meet the farmer days, pick your own, farm cafes and farm shops would all help to reconnect the consumer with where their food comes from and to embrace whole foods.

In 10,000BCI argue that a real food economy is worth investing in as as much as mobile phone technology was in the 1990s. With enough political will, and vision, real food could revolutionise our relationship to farms, and food. Britain is the worst consumer of ultraprocessed foods in Europe, our health costs are soaring, we need a revolution.

Further investment in agriculture would be raised through new farmers. Britian’s farming population is in decline. Could it be that agroecological farming that embraces creativity and a relationship with the land is a more inviting propect than industrial, chemical farming? If half the number of farmers who studied agriculture went on to becomes farmers, there would be a million new farmers by 2055. 30,000 new farmers a year, I argue in 10,000BC could raise a minimum of £250,000 each in start up capital, land and housing. That amounts to an investment of £7.5 billion annually in the rural economy. Each farmer would come to employ farm labourers amounting to circa 90,000 new jobs in farming every year. 

An agroecollogical model does not just feed people well, but it also, sequesters carbon, protects waterways, nourishes the soil, creates wildlife habitats and, little mentioned, has the potential to stimulate the economy. Farms become places of recreation inviting the consumer to “get on my land”, not “get off my land”. Intensive horticulture and agroeforestry systems maximise the produce gained from the land. Fertility of the soil builds naturally.

Overall, billions are saved via the health economy, further tens of billions are saved in natural capital, and yet more billions are raised in private equity invested in a new wave of ecological farms. The SFI was a step in the right direction, More ecological farms means more organic food means more people able to buy organic food. With greater funding the SFI could be the key to providing “organic food for all” while bringing billions to the UK economy in savings and investment.

Read more about “Organic Food For All” in Chapter 6 of 10,000BC here

What’s negative interest got to do with agroecology?

One of the core prinicples of agroecology is fair distribution. It is not enough to just grow more food, but that food must be distributed to everyone who needs it. Profiteering on mass produced grain generates profits for the middlemen, but the food is often taken away from the countries that need it. We live within a highly competitive economy. Margins are squeezed and the produce sold to the highest bidder, on the international markets. There is no incentive for businessmen to act responsibly, in fact the opposite is true. There is every incentive to act irresponsibly, to ignore social values and to ignore the hungry. One little discussed reason for this pressure on business is the threat of bankruptcy. Where does this threat of bankrupcy come from? Interest bearing money creation means bankruptcy is ever present for enterprises around the world.

What is interest bering money creation? Consider a brand new economy: the central bank creates £10 in year 1 and loans it to a group of businesses. £2 is charged in interest in the first year, not created, just charged, so the businesses owe £12 in year 2. Where does that extra £2 come from? There is only £10 in circulation. The bank can create more money and issue more loans, but eventually, when the economy slows down, at least one of the businesses will go bust because there is not enough money in circulation to meet the debt repayments. This is reflected in thousands of insolvencies in Britain each year. Some call it creative destruction, sorting the wheat from the chaff, but in reality it is feeding a dog eat dog mentality. Few directors would voluntarily pursue an ecological or ethical strategy under these conditions. 

In contrast to positive interest bearing money creation, negative interest offers a way out of this complex. The banks create £10 in year one, and only demand £10, or less, in year two. “Doesn’t that mean we’d pay to keep savings, and receive money for being in debt?” asked a friend. In theory, yes. But there would be ways to mitigate the effects of negative interest such as savings trusts that stood outside the interest environment and zero rated loans. Savings trusts for retirement, buying a house, school fees, a car, a computer could all sit outside the negative interest environment. In Japan in 2016, the Bank of Japan introduced a rate of -0.1% in an attempt to ease deflation. The banks offered a three teir savings structure to protect the majority of savings: +0.1%, 0% and -0.1%, with only a fraction paying the negative rate on their savings.

A negative interest rate has the potential to improve the macroeconomic conditions of the economy, as well as changing the public’s attitude towards cash. Cash is not to be hoarded but reinvested back into the economy, either as loans, spending on goods, or gifting. On a macroeconomic level, money is created at a negative interest rate, or a zero rate, creating an situation where low return industries such as food and farming suddenly appear much more appealing.

In a developed country, where most of our daily needs are met, economic growth will be necessarily slow. Areas of growth will be sporadic rather than the norm with innovations improving the basics of life rather than introducing entirely new ways of being. Growth comes in the form of improved efficiencies, such as AI tools to get better search results, quantum computing to process large volumes of data more quickly and robotics to streamline supply chains. We await the next big thing such as flying cars, space travel and clean energy to power our next growth spurt, but in the mean time it makes sense to consolidate what we have. Agroecology offers an opportunity for the quality of our food to be improved. Organic food is a substitute product for conventional food and while it does not offer the obvious returns of IT investment, it does improve the quality of life of the people who eat it.

In a low growth environment, which is what most developed countries are currently facing, areas of low growth (not necessarily zero growth) should be embraced. Qualitative benefits such as improved public health and natural capital like soil and water quality should be accounted for in investment proposals. If we factor in the opportunity costs of organic food, produced agroecologically, conventional food has a poor return on investment.

Negative interest is a counterintuitive idea that is based on recreating our cultural relationship with money. Eisenstein discusses it in more detail in his book Sacred Economics. I included an introduction to it in 10,000BC because hoarding large amounts of money gained during high growth periods is creating significant inequality. Hundreds of thousands of people now rely on food banks because even the price of food is too much for them. Our system of positive interest bearing money creation fuels our addiction to high growth economics, which increases inequality and ignores low growth areas such as agroecology. Negative interest could increase spending, particularly in low growth areas that are being ignored in a positive interest environment. By spending time in a negative interest environment, zero rated loans also take some of the pressure off company directors, because the threat of bankruptcy is reduced. Social aims such as reducing hunger become more viable.

Read more about negative interest in chapter 8 of 10,000BC, On The Quest For Equality, here.