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Costing the Earth

Patrick Holden on the true cost of food production

01-04-2014 | Intensively farmed food may be cheap to buy, but ultimately we all pay a high price for its nasty consequences. Sustainable Food Trust founder Patrick Holden explains that to build a more sustainable farming system, we first have to account for the true costs of food production.

False accounting

The question that frames the whole discussion is this - why is it that sustainably produced food costs more if you’re a consumer and is less profitable to produce if you are a producer? We’re living in a topsy-turvy world where that is the case. You’d think that buying food which is better for you and the planet ought to be more affordable. But the reality is that doing the right thing is the more expensive option, often to the point where it prices products out of reach of consumers. And it’s so unprofitable that there’s not a strong business case for farmers. That’s why more farmers aren’t farming organically and more consumers aren’t buying organic food.

  Patrick Holden240

“You’d think that buying food which is better for you and the planet ought to be more affordable.”

Patrick Holden, organic farmer and Sustainable Food Trust founder  

The reason is that the polluter doesn’t pay. From the damaging emissions causing climate change and the negative impact on biodiversity, to the downstream cost to public health and wider social and cultural impact - producers of intensive food are not financially accountable for the consequences of their farming systems.

At what cost?

Take nitrogen fertiliser for example, the foundation stone of intensive farming. It costs famers about one euro per kilogram to buy, but the financial benefits are perhaps two or three euros. So on the face of it, there’s a good business case for using it. But researchers have recently tried to put a price on the damage it causes, including green house gasses, pollution of water courses and damage to human health. We don’t pay for these directly in the food. They’re hidden elsewhere – in the cost of climate change to society or higher health service costs for instance.

The economists worked out that this hidden cost is at the very minimum four euros per kilo, but could be as much as 23 euros. So the damage nitrogen fertiliser causes exceeds the financial benefit to the farmer. But as that cost is not seen by the farmer, the business case for them is still to use it, even though it’s costing society more money than the farmer gains.

Carrot and stick

So we thought what can be done about this. We started to identify the various damaging consequences which are present in intensive farming systems, trying to assess the scale of the damage caused and put a price on it. In doing so we can start to work out how to develop mechanisms – be they transferring subsidies or taxes, or other policy and economic instruments – which ensure that in future the people causing damaging consequences have to pay for them. And on the other hand these mechanisms can reward producers whose production systems deliver positive benefits to the environment and society.

You could say at its essence it’s a carrot and stick approach. Make sure that those who cause damage are accountable. And that there are good positive financial incentives for those who are improving environmental capital, human and environmental health.

Mobilising public pressure

So what can we do about it, both as consumers and citizens? As consumers we can continue to buy food which comes from more sustainable food farming systems. That’s local food, sustainably produced food, organic food. This supports the farmers who are already farming more sustainably and will help the planet. But we need to do more and this is where the citizen bit comes in. We need to be aware of the true cost accounting issue and that something needs to be done about it.

Armed with this information we can use our votes to encourage governments to do something about it. In the end, informed public opinion is the biggest force in the world. Once we can get enough people to realise the damage done by our present food and farming systems, we can mobilise the power of public pressure to change it.


photography HERMIEN LAM interview by WILL FERGUSON

CV: Patrick Holden

Patrick Holden is the Founding Director of the Sustainable Food Trust. Between 1995 and 2010, he was the Director of the Soil Association and became a much sought after speaker and campaigner for organic food and farming. He spearheaded a number of prominent food campaigns around BSE, pesticide residues and GM food. More recently, he was a member of the UK Government’s working group on the Foresight report into Future of Food and Farming and is Advisor to the Prince of Wales International Sustainability Unit. Patrick started a community dairy farm near Lampeter in 1973, which is now the longest established organic dairy farm in Wales.

True Cost Accounting

In December the Sustainable Food Trust conference brought together world-leaders from across food, farming, conservation, research, finance and government policy to investigate why our current economic system makes it more profitable to produce food in ways that damage the environment and human health, instead of rewarding methods of production that deliver benefits.

Visit their website to see films of the event's speakers, including Triodos Bank CEO Peter Blom on financing the food system.


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