Why a return to small-scale farming isn’t going to happen

A common trope in peak oil circles and other communities skeptical of industrial society’s long-term future is the assumption that the trouble society faces due to oil depletion will be addressed by a return to small-scale farms. Many people have embarked on permaculture projects, others have fled to the countryside to sit out the coming collapse of modern civilization.

The idea should be simple to understand: People need to eat to survive, everything else is secondary. Thus when all the excess layers of complexity enabled by fossil fuels are stripped away, we will be left with a situation where agriculture is the main potential source of employment. In addition to this, the fact that industrial agriculture depends on oil means that lack of oil will make methods of farming that were rendered non-viable by new technologies viable again.

I am skeptical of this suggestion for a number of reasons that I will aim to outline in this essay. The first issue I want to address is the fact that capitalism doesn’t per definition assign a fair market value to products that adequately conveys the underlying issues involved in their production.

Anyone who looks at fossil fuels should understand the issues involved here. The first problem we notice is that fossil fuels are sold at a price that doesn’t allow us to address the damage caused to our environment. The second issue we notice is that fossil fuels are not even sold to us at prices that cover the costs that companies incur to extract them.

As Gail Tverberg and others have noted, the limits to growth we have encountered express themselves in the form of low oil prices, rather than high oil prices. This is caused by the fact that consumers can no longer afford to pay high prices due to debt limits. As you might have noticed in the years since 2008, you’re not spending a significantly larger share of your income on food. In fact, as of speaking in 2016, world food prices are very low again. What has primarily risen in cost are insurance, college tuition and rent.

Societies where a large section of the population works in agriculture have one thing in common: The vast majority of people’s income is spent on food. In our society, regardless of whatever decline in standard of living we might have experienced, most of our income in the developed world isn’t spent on food, just roughly ten percent is.

It’s important to note, that most of this doesn’t end up in the hands of the farmer who grew the crop. A disproportionate amount of that share ends up spent by restaurants. Another large share of the price ends up distributed to the variety of participants in the logistical chain that leads to food entering the supermarket.

The big secret of small scale organic farms is that they’re economically non-viable. They’re kept alive through government subsidies on one hand and on the other hand, through consumer lifestyle choices. People are willing to pay a lot more for a product that can be marketed to them as being a “responsible decision”.

But what happens, when people end up in a situation of economic scarcity? As I will explain to you, the consequence of this will be that agriculture will merely become even more mechanized. The products that are cheap and affordable for us, are the same products that tend to require relatively little physical labor. The reason for this is because employees are expensive.

What makes employees expensive? A variety of factors. Employees are susceptible to accidents and sickness, that lead to costly medical expenses. Employees have to be paid regularly, even if circumstances prohibit you from making effective use of their labor. A hailstorm in the Netherlands recently confronted farmers with this problem. Their greenhouses had been destroyed, so they found themselves confronted with a situation where they had to continue paying their employees, despite being unable to make use of their labor.

Employees are also unpredictable. They could go on strike, they could make errors, they could become sick, they could steal from their employer or they could sue their employer for exposing them to conditions that render them infertile and give them cancer. For farmers, employees are a massive burden, one that they would happily get rid of if they could.

There are very few conditions imaginable that would render it financially attractive for a company to replace a machine with laborers. If we run out of oil, phosphate rock, water, fertile soil and other essentials to grow crops, companies won’t respond by hiring more laborers. Rather, what will happen is that companies will pass on the costs to consumers.

How will consumers react when costs are passed on to them? Consumers will start to cut down further on their food expenses. What this means is that they will cease to go out to dine as often, as this is the easiest place to cut down on expenses. Another option for them is to substitute more expensive food items with less expensive food items.

How could consumers cut down on their food expenses? One option will be for them to let go of their picky lifestyle choices. To eat only the flesh of animals who had a good life and saw sunlight in their lifetime is a decision that people can make who have excess money to spend. Similarly, to eat organic foods grown without the use of fertilizer and pesticides requires a position of choice that few people will have as their budgets are reduced. Organic foods require roughly twice as much labor input and as a result are more costly.

One important problem to understand when it comes to how agriculture will change is that the diversity of crops we eat today would amaze people who lived just a century or two ago, in a time when our diet was almost entirely dominated by cereals. Grain is cheap and simple to grow. As our medieval ancestors developed improved agricultural methods and saw their population grow, the dominance of grain in our diet merely grew. Between the eight and eleventh century, cereals grew from a third of our diet to roughly three quarters of a typical person’s diet.

By the 18th century, the European diet was almost completely composed of grains. Then, by the late 19th century, wheat yields began growing faster than the rate of population growth. As a result, per capita staple food consumption eventually reached a peak. Something unique happened: Regular people were left again with disposable income that they could begin spending on different food items that had been until then affordable to them and reserved for the upper classes: Meat, fruit, vegetables, chocolate, coffee, tea, etcetera.

Our health has improved drastically as a consequence of our reduced reliance on grains alone. Scurvy has practically disappeared, as have rickets and other disorders caused by our poor diet, which led us in much of Europe to have a lower life expectancy than hunter-gatherers until well into the 19th century. In the poorest regions in the world however, most people still have diets that consist for 80% or more of cereal grains.

The problem, as you might have anticipated, is the fact that the new foods we added or re-added to our diet, are luxury goods. We eat them, not because they are a cost-effective method to ensure our survival, but because they improve our quality of life. For a hunter-gatherer, these two motives roughly align. The foods he happens to have access to will also typically be foods that are relatively healthy for him.

For those of us living in civilization, these two motives have been opposed to each other for hundreds of years: What’s cheap and easy for us to produce (wheat, rice, corn, potatoes) is not what happens to be most healthy for us. The real risk we face now, if our standard of living continues to decline at its current pace, is a return to the type of diet we left behind. The free range bison meat and organically grown pesticide free blueberries you buy at Whole Foods don’t inherit the future, the big sack of potatoes and industrially produced white bread you buy for a fraction of the price will.

It’s important to understand that for the staple crops we eat, the advantages that industrial agriculture happens to have over any more sustainable forms of agriculture are much larger than the advantages it has when it comes to other crops. These advantages are unlikely to disappear anytime soon.

As a result, collapse doesn’t lead to a break in the trend of industrial food production. It means a continuation, even as people begin to discover the major problems associated with it. We will merely grow more dependent on modern industrial agriculture. The scale advantages that it happens to have are too big for us to overcome.

What we should expect to see is that it will become increasingly difficult for people to live far away from major urban population centers. Many small rural towns and island communities are already dependent on government subsidies to keep them alive and in most of Europe, the countryside is being deserted. Hyper-urbanization is part of the process of collapse that we will witness in the decades ahead.

This is unfortunate, because most of the critique aimed at industrial agriculture is of course justified. It is destructive in nature and tolerates very little biodiversity in its surroundings. Many people would also rather maintain their traditional way of life, rather than being reduced to passive consumerism. The only unjustified critique is the idea that we have a viable alternative.

The other side of the coin would be that ecological damage will be relatively limited if urbanization continues. The decline in subsistence farmers and the increase in rural flight towards the cities has opened up vast swathes of land that were formerly under cultivation. Today there are large plots of land where trees are growing in new forests that were formerly used for subsistence agriculture. Whatever life manages to survive outside of the cities may face less competition from us.

On the value of economic self-reliance: The green case for a Brexit

If there’s one thing I struggle to understand, it is how the green party reconciles its decision to support the continued membership of the United Kingdom in the European Union with its emphasis on the need to address climate change. As Baroness Jenny Jones has pointed out as a lone exception to the “green” consensus, British membership is merely going to exacerbate the underlying problems that have become the driving forces behind climate change. For us to successfully address climate change, the idea of free trade as an unequivocal good has to be challenged.

Gail Tverberg and others have noted that the established solutions to climate change do not appear to work. We have seen many ecological problems before, where the issue could be addressed through substitution and technological innovation. Ozone depletion was addressed by an international agreement to phase out CFC’s, addressing the buildup of persistent organic pollutants was similarly agreed upon through international agreements.

In the case of climate change however, things have worked differently. Climate change is a problem that is far more pervasive and intrinsic to the way our economy happens to function. The industrial revolution that led to the drastic rise in our standard of living was made possible by the exploitation of fossil fuels. To maintain our way of life in the absence of the fossil fuels that gave birth to it will be a gargantuan task.

Most efforts to reign in the growth in carbon emissions have so far proved futile. In the presence of free trade agreements, rising manufacturing costs have led to the shift of industry away from Europe, towards countries like China, where energy prices are still low and regulation is very limited. As a result, the decline in emissions in Europe has been more than compensated for by the rise of emissions in China.

As a result of the European Union’s freedom of movement, some efforts by nations to reduce their own carbon emissions have proved nonviable. In Germany, the introduction of an aviation tax led passengers to simply use airports in nations that border Germany. A similar attempt by the Netherlands to introduce an aviation tax similarly led to passengers flying in Germany or Belgium.

In the Netherlands, the decision to raise petrol taxes led to a sharp rise in people who bought their fuel just across the border, leading to an unexpected budget shortfall. You might argue that these were simply foolish policies, but they illustrate an important principle: The current division of power is inefficient. It renders nation states impotent and the likely outcome is thus that the EU will be forced to draw ever more power towards itself.

We live in a globalized world, where every country can freely trade with every other country and where companies will soon be able thanks to TTIP to sue European nations that happen to hurt their interest due to environmental legislation that makes their business model less competitive. As a result, it becomes increasingly difficult for nations to protect the environment. We are stuck in a race to the bottom, where companies will simply shift their energy intensive processes to whatever nation still happens to have cheap fossil fuels.

You might assume that the rise in renewable energy will address these issues. If solar power were to become cheaper than coal, companies would have no more incentive to move their manufacturing base from countries like Denmark and Germany to countries like India and China that still use dirty energy in large amounts. Thus we’d have no reason to challenge free trade agreements.

There are however reasons to be very skeptical of this suggestion. Certain processes appear highly dependent on fossil fuels. Even if we accept the suggestion that renewable electricity will soon be cheaper than fossil fuels (a big if), we have to consider the fact that coal is used not just to generate electricity, but also to manufacture steel as well as a variety of other processes where intense heat is needed. Renewable electricity can compete with fossil fuels because fossil fuels waste most of their heat in the process of generating electricity. When the end-product needed is heat rather than electricity, fossil fuels have a strong competitive advantage.

More importantly perhaps, international trade itself is a process that seems impossible for us to render carbon neutral. There will never be cargo airplanes powered by solar power, as the batteries simply can’t store the massive amounts of energy needed for these planes to lift off the ground. Air transport is instead looking at biofuel to become carbon neutral, which means that we will end up massively increasing our land use if we wish to maintain the growth in air transport.

The transportation of goods by trucks might be physically possible to do with electric vehicles, but it’s difficult to envision this ever becoming economically competitive with trucks that run on diesel. Similarly, we run into trouble when we envision carbon neutral merchant ships. Forty percent of the world’s merchant ships are registered in Liberia, the Marshall islands and Panama, because these nations place few regulatory burdens on the merchants. How are you ever going to enforce a target of zero carbon emissions on such an industry?

This is all nice and well, you might argue, but isn’t our economy reliant upon international free trade by now? This is correct, but the degree to which we will rely on international free trade in the future is a choice we make ourselves. To a large degree, the trade that happens between Britain and other nations is excessive.

Note for example, that Britain imports 61,400 tonnes of poultry meat a year from the Netherlands and exports 33,100 tonnes to the Netherlands. Britain also imports 240,000 tonnes of pork and 125,000 tonnes of lamb while exporting 195,000 tonnes of pork and 102,000 tonnes of lamb.

It’s quite clear that the suspension of trade barriers has lead to the unnecessary and wasteful transport of a variety of goods between different nations. But why does it happen? Even if trade between nations is free, wouldn’t the invisible hand of the free market end up limiting excessive transport to a minimum?

There are a number of issues intrinsic to the European Union that might contribute to this. For example, the VAT system of taxation encourages carousel fraud, where fraudsters earn an estimated 50 billion Euro per year, by exporting products across European borders and receiving VAT back they never paid in the first place. As a result, some products in the EU are transported across borders for the sole purpose of tax fraud.

Similarly, to protect certain long established industries, the EU only allows certain regions to use particular terms for their food products. The EU only allows cheese to be called Feta cheese if it happens to be produced in Greece, while Parmesan cheese has to be produced in the region of Parma.

As a result of this, the main way for food producers to earn money becomes to produce a product with a protected status, as you don’t face competition from outsiders who might be able to produce the product too. The limited number of producers restricted to a particular geographical region also enables the creation of economic cartels that keep prices artificially high.

There are of course arguments to be made in favor of this policy, but in practice the combination of free trade between European nations and the regional protection of food items, leads to the excessive shipping of products across nations that could just as easily be produced domestically.

We can choose to grow more dependent on the import of products from foreign nations, or we can attempt to maintain the natural economic barriers that existed for centuries before we became dependent upon fossil fuels. This would also have the effect of rendering us less vulnerable, should international trade happen to break down for whatever possible reason.

It’s not hard to envision how the consequences of free trade and increased reliance upon foreign nations could come back to haunt us. Saudi Arabia, the world’s second largest oil producer, is a politically unstable nation. It’s bordered by two nations that have large swathes of territory governed by Al Qaeda and Islamic State and also happens to have a domestic religious minority of Shia Muslims, who happen to live on top of most of the oil fields. If Saudi Arabia ever goes the same way as Venezuela or Libya did, it’s easy to see that there would be international consequences.

Similarly, the Suez Canal lies next to territory home to terrorist groups that have successfully taken down airplanes. At some places the canal is a mere 300 meters wide, so it’s not hard to see how domestic instability could shut off the canal, causing enormous global disruptions in the free exchange of goods.

The more complex a system becomes, the more potential points of failures emerge. Free international trade has turned into an immensely complex system, host to a variety of factors that could lead to cascading failures, many of which are difficult for us to anticipate.

An exit from the European Union today would provide Britain with the opportunity to reduce its economic reliance on other nations. If an exit does not occur this year, there probably won’t be another opportunity for many years to come. In the meantime, the global economy and the European Economic Area would grow increasingly interconnected, ensuring that if the United Kingdom were to leave in the future, the economic consequences would be much bigger.

To me it is clear that the best solution is for the United Kingdom to make use of this once in a lifetime opportunity to leave the European Union. Leaving the European Union would help prepare Britain for the inevitable era of economic contraction that is ahead when the global economy runs into finite limits. The limited resources we have on our planet would be used in a less wasteful and more efficient manner again.

Perhaps most important of all however, Britain’s political borders were shaped by the geographical boundaries that an island has. Boundaries exist in nature for a reason, they contribute to diversity and create isolated communities that can survive even as other communities are in turmoil. This phenomenon occurs at every level, from the appendix that hosts bacteria that recolonize the intestinal tract after disruption, to islands like Socotra where species survive that have gone extinct everywhere else.

Nature never puts all of its eggs in one basket, nor should we. As we all know today, Britain’s isolation ultimately proved to be to everyone’s benefit when previous utopian experiments imploded and Britain was able to help reestablish order on the mainland of Europe.