By Matthew Warnken           

Tuesday, 2 October 2007

Increasing global populations combined with severe drought are likely to combine in a global 'food shock' where countries are unable to feed themselves. Market reform is needed - not to pay farmers to walk away from land made unproductive after years of abuse and neglect, but ongoing payment to restore ecosystem services so we can continue to feed ourselves.

The link between the current farming crisis in Australia and cost cutting (or supply chain 'management') may not be immediately obvious. However, the strategy of cutting the costs of goods sold is unsustainable in the long term, a fact highlighted by the ecological realities of food production - or lack of food production in times of severe drought.

Cost cutting is unsustainable
The underlying arithmetic of cost cutting is that more production is required at lower margins in order to maintain profitability. Unfortunately, farmers are at the bottom of the food supply chain and are forced into a mass production mentality by the purchasing power of large retailers intent on cutting costs.

The market focus is thus increased production, as opposed to investing funds to maintain or restore ecosystems. Production systems accordingly treat the land as a form of hydroponic media, requiring various inputs of nutrients, pesticides and water to attain desired growth.

However, by not managing to build ecological resilience, these farming systems are increasingly vulnerable to severe weather events, such as drought.

Food shock threatens basis of society
Last week former National Party leader John Anderson warned the long-term impacts of drought on food production, in combination with increasing global population, are likely to combine in a global 'food shock' where countries would be unable to feed themselves.

The consequences of such a food shock should not be underestimated. Authors such as Jared Diamond and Tim Flannery have articulated the often overlooked relationship between human civilisation and supplies of domesticated crops and animals. No food means no society.

Under severe drought conditions there is zero food production and under prolonged drought we have the current situation where farmers are being paid $150,000 by the Commonwealth to walk off unproductive farms. Not only is there no food production, but the capacity for future food production is undermined by a marketplace that rewards short term returns at the expense of long term sustainability.

The elevated levels of assistance provided to farmers have also met with criticism, especially by owners of other small to medium enterprises who receive no government pay-outs if their non-agricultural businesses suffer downturns.

The rationale for providing farmer assistance is that the drought is not a market issue and is unaffected by management or administrative skills (or lack thereof). In other words, it is not the fault of the farmer. However, this explanation fails to understand the true consequences of an economy that does not internalise environmental costs and we have yet another example of flawed public policy that refuses to address the underlying cause the farming crisis.

Sustainability credits for eco-services
Rather than paying farmers to leave farms, we need an economy that pays farmers to invest in the provision of ecological services such as resilient systems of food production in low rainfall climates, soil restoration, water conservation and management, and enhancing biological diversity.

Some form of 'sustainability credit' could finance farmers to undertake the long-term restoration of unproductive lands. In times of severe drought there would still be annual payments made to farmers to protect the future productive capacity of the land and engage in ongoing research and development in low rainfall food production systems.

This form of payment would enhance our long-term food productive capacity, a fundamental necessity if we want to secure a long-term future for Australia.

Vantage Point columnist: Matthew Warnken is a sustainable business and research consultant with Crucible Carbon. Contact at This e-mail address is being protected from spambots. You need JavaScript enabled to view it