Alternatives to the Agricultural Industrial Model

The Central Hawke’s Bay area of New Zealand is a warm to hot summer dry environment with strong hot equinox winds.  An in-stream dam (Ruataniwha Dam) is being promoted for irrigation of 25,000 hectares of flat land.  The intensification of agriculture puts the high value Tukituki River system at risk.  The promotors of the dam argue economic growth and ‘no alternative’.  

The following is an article prepared for a local publication in April 2014.

The propaganda surrounding the Ruataniwha dam argues that we have two clear options: a life of desperation if we don’t industrialise more; or an economic nirvana if we do.

Both positions are false, and leave no room for thought on what issues and opportunities we have – and we have many. Rather than seek to understand the root causes of our issues we were presented with one operational proposal.

One. A dam.

There was no suggestion that it might be worth thinking about why we have a long-term decline in commodity prices and profit margins to growers, and consequently, an increase in farm aggregation, a reduction in the returns to both staff and the local community.


Figure 1. Long-term real world commodity price trends

Nor do we discuss how farm aggregation, corporate farming, and the loss of local ownership and processing impacts on our communities. It is assumed we can do nothing about it. Yet the key to local economies is creating diversity and value within the land, adding value locally through long, local value chains, keeping control of as much of the value chains to the consumer as possible, and retaining the distribution and spending of that money locally. Create, keep and distribute value. Attract enterprises that want to live and be a part of our space. Make our place a great place to live for all. An upward spiral, rather than the downward one we are currently in.

Proponents of commodity development also don’t question the assumption that a healthy environment is somehow in competition with the economy. It is not. A healthy environment is the key to both cost reductions and price increases within discerning markets. It also gives us the quality of life that keeps our own and attracts others. This is particularly ironic given that the reaction to the EPA decision on nitrogen limits by some proponents of the dam shows they still persist in believing that more pollution and more land aggregation, with less local processing and more migrant labour, is apparently the only hope for Central Hawke’s Bay.

More intensification of industrial commodity-focused, price-taking large-scale sameness, with more pollution, is not the answer. It is the problem.

All these are issues and assumptions at the core of visualising and realising our alternative future. And underlying all these issues is how we view economy, land and people.

Our Colonial Commodity Past (and Present)

New Zealand primary production has been living within a downward-spiraling commodity trap since 1973 when Britain entered the European Community. We used to get a relatively fair price and, like all good colonial suppliers, the focus was on commodity primary production with short or non-existent value chains. Without the benevolence of a British buying public, we entered the real world.

But we did not change our essential strategic approach, and 12 years on from 1973 our class was still being taught to maximise agricultural production, no matter the potential within the farm system for greater value, or the environment, or the long-run consequences of a grow lots, cheap, strategy.

Our mistake was in thinking that the solution lay in this production of more, ever more cheaply. By so doing we de-emphasised quality and diversity, almost treating them as disdainful hippy alternatives. Just pour more fuel on a system that is spiraling downward.

It does not matter what new technology or infrastructural investment is promoted to our producers. If the basic strategy of commoditising product, land, people and environment is not challenged, then margins will continue to fall, there will be less enterprise and ideas, less potential realised within our landscapes, less people employed, and more profits and processing jobs centralised out of the local economy.

Viewed from the top and moving clockwise, figure 2 is a representation of the vicious cycle that we are in.


Figure 2. The Vicious Cycle of the Primary Sector Commodity Strategy

The ultimate end point for this sort of nonsense is a local Mordor, with people treated like Orcs, and Sauron happy in his tower with the big roving eye. Lack of diversity, environmental destruction, loss of local profits and local spending, and the loss of ‘social capital’ including such things as trust, justice, participation and creativity. It is through this social capital – along with the potential of our landscapes – that local economies flourish.

However, these underpinning social and environmental capacities and qualities are the very things we destroy in pursuit of economy because we do not understand the linkages. But we have nice shiny models with lots of dollars in them – none of which include the social and the environmental things, naturally. And because they do not, they are next to useless. E.F. Schumacher said it best:

[Financial analysis] is a procedure by which the higher [environment & social function, resilience, virtue, judgment, justice, the long-term, etc.] is reduced to the level of the lower and the priceless is given a price. It can therefore never serve to clarify the situation and lead to an enlightened decision. All it can do is lead to self-deception or the deception of others. Schumacher 1973. Small is Beautiful


Figure 3. Contemporary “Dysfunctional” Agribusiness Landscape (Dr Simon Swaffield 2000)

Partly – but only partly – the problem is the commodity and factory ideal. Cheap production is our colonial identity, still very much a part of the agricultural education and research tradition, supported by policy and media. You cannot get away from the latest prophet – usually peddling some new technology – arguing it is our moral duty to produce more to feed the world, and never mind the loss of profit, increase in risk or social and environmental destruction wrought by such self-serving rhetoric. But it is seductive because we are so tied in to producing lots of cheap stuff.

This is a myth that should be not so much put to bed as kicked far out the door. Some facts then. Twenty-five to 35% of food is wasted. We produce more than enough food, and could feed up to 9 billion comfortably, some argue 14 billion. The problems are geo-political (distribution and the ability to pay) rather than the ability to produce, though there are the rising problems of energy use and associated land addiction to continued inputs within the industrial model of food production.  Two billion people earn less than $US2 per day, not a market we can supply without having the cost structure of Bangladesh, which, of course, is where the corporates and their GE allies would have us get to in the interests of their profits, not ours. Small farmers – not corporates – produce 80% of the world’s food. The UN produced an extensively researched report in 2010 arguing that we need to get off the delusion of high-energy corporate agriculture and shift to ‘agro-ecological’ farming systems – essentially learning to use free services (like clover, topographical patterns within the farm, pollination and other biodiversity functions, water holding etc.). They are repeating what Morgan Williams argued in the Parliamentary Commission for the Environment’s report in 2004 Growing for Good. The answers are there. They are just not being listened to.

Those who benefit from the ideal of producing more are the processors of the primary produce, the researchers – who incidentally don’t get funded for researching ‘agro-ecological’ approaches in New Zealand – the corporate suppliers of the ‘next big thing’, and the middle men who clip the ticket on the way through. Wendell Berry, author of a classic thesis on the loss of family farms through commodity and corporate farming – The Unsettling of America – called them the ‘exploiter’ class, whose trading of commodities he considered a corruption of culture involving a breakdown in morale, community integrity, personality, farmers, communities, and local trades and craftspeople. What he wrote about the US rural economy in 1977 is highly relevant to what is happening in New Zealand today.

The Potential Future for Central Hawke’s Bay

What we could have as a future is a mirror of this nightmare.

We want an economy where there is high value local processing and jobs, owned by locally owned small and medium enterprises that spend their profits and buy locally, supplied by family farms whose production holds price or is sold at a premium. We need high social capital, morale and initiative within our people with the opportunity to be creative. We want resilience to market changes, so diversity and differentiation is the key. We also want clean rivers and a landscape that can hold water from our rains to mitigate both flood and drought, provide good things for free, and provide us with the marketing messages – healthy land, healthy food, healthy community, therefore pay more for the privilege.


Figure 4. The Virtuous Cycle of High Value Local Landscapes

All this involves a rethink. This is the other problem. Our understanding of what ‘development’ entails. I do have a vision for a diverse landscape for Central Hawke’s Bay that isn’t partitioned into 1000 hectares blocks of pure grassland extending over hill and through dale irrespective of the potential of sites. The future could see a greater, more mature mix of pasturelands, croplands, woodlands and wetlands, each with multiple benefits and each creating the potential for more diversity and enterprise (figure 5). However, I would not dare to suggest that we would have olives on the hills in the Huatokitoki or truffles in Poukawa.

ImageFigure 5. Potential Integrated Landscape Vision (Swaffield 2000)

Which relates to what we mean by ‘development’. Development is not about building ‘things’; structural projects. Jane Jacobs, who wrote two excellent books on local economies, said it best: “Development is not about a collection of things but rather a process that creates things.” Those processes feed off each other to create a positive ‘virtuous circle’ (figure 4). What Jacobs was referring to was developing the very opposite of the self-reinforcing ‘vicious’ circle of cheap monocultural commodity (figure 2).

So rather than build a physical monument to someone’s ego sold on a false hope and living within the same cheap commodity theme, the focus shifts to the capacities of economic strategies, land, and people. These are the key ‘sites of action’ that are critical to the shift.

Getting off the emphasis on industrialised cheap commodity and re-focusing on market position and price retention is paramount. Embrace diversity and flexibility. The industrial spin merchants promising a temporary margin increase from some new technology are working in their interests, not ours. We ought to be particularly wary when they promote technologies that actually decrease our market position to the lowest grade of foodstuffs, such as GE.

The second key is to realise the potential within our climatic and landscape systems, both in terms of the land use patterns that create a resilient landscape – economically, environmentally, and socially – and in terms of creating capacities in our soils that lower input requirements and hold water against gravity and drying winds. Given our climate, and the threats of more extreme weather events in the future, then increasing these capacities over the wider Central Hawke’s Bay area is far more important than the 24,000 hectare proposed for irrigation. Water holding increases our resilience to droughts and floods while at the same time creating economic benefits, increasing biodiversity, water quality, economic options, lowering energy needs, and increasing carbon stores.

The research effort on land should be focused on building agro-ecological understanding, not led by production and techno-fixes. We need to work with climate and land, rather than try to force land areas that are uneconomic in pasture away from the woodlands and wetlands to which they are far better suited – economically and environmentally. That potential is also critical to the market position of our production. The mega-trends for discerning consumers are tasting the local difference (Terroir), environmental and food quality, and food safety.

We need to build the capacities of our people as critical to vibrant social systems and economies. Researchers and thinkers like Jacobs, Putnam and Sen emphasise social factors like participation, justice, trust, and the freedom to think, debate and create as essential. Those who emphasise spreadsheets and dollars usually destroy these capacities because they view ‘labour’ as an unconscious ‘factor of production’ without ideas; and people as box-ticking robots rather than having their own values and ideas.

There are other keys. Localising and building on the value off the land is also vital. So we should emphasising local processing, decentralised co-operative systems, and control of the value-chain to the end market. Family farms are far more important to a local economy than large-scale mechanical enterprises owned out of the region and staffed by cheap migrant labour.

All of these are strategic considerations to build the capacities of economy, land and people. These are moral issues as well as strategic issues, neither of which the financial and economic models capture, which is why qualitative strategy should always comes before quantitative finance within any development or investment framework.

The idea of healthy land, food and community and a strong shift away from corporate commodity, has not been seriously considered by the proponents of the dam. A focus on the one (dam) game in town, public relations, and the bamboozlement of sense by finance, has completely trumped strategic thinking. They are still thinking within the commodity trap, and cannot think themselves out of it.

Chris Perley

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2 Responses to Alternatives to the Agricultural Industrial Model

  1. michael says:

    Very thoughtful economic analysis. I personally think animal agriculture is a sunset industry, like steam power last century. Passing all food through a cow before eating it is inherently wasteful and we would do better to invest in plant based agriculture.

    • cjkperley says:

      Hi Michael. The problem with universal plant based agriculture is that much of our (hillier) landscape is not amenable to that form of activity. I think there is a great deal of room for animal based agriculture; particularly if we change our focus from the industrial.

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