Renewable Matter # 08 / January-February

The Unbearable Heaviness of Food Production

by Gianfranco Bologna

Worldwide, the environmental cost of intensive and industrial agricultural practices amounts to $3 trillion yearly, a staggering sum, bigger than the UK’s GDP. These are the bewildering data emerging from a study published by FAO (Natural Capital Impacts in Agriculture. Supporting Better Business Decision-making) in collaboration with Truscot advisors, a team of experts providing support to companies and investors to understand the repercussions of environmental issues from the business point of view.

But the study, besides estimating the environmental costs caused by unsustainable food production practices, highlights methods to start alternative approaches to intensive agriculture able to provide better results from an environmental and economic point of view to the whole agricultural sector. In reality, there is a wide range of viable solutions to promote more sustainable agricultural practices that will reduce impacts and help countries tackle the food-production-increase challenge while satisfying the needs of growing population.

Today, agriculture and animal farming take up 38% of the world’s land surface: the most significant figure of human-induced physical transformation on the planet’s ecosystems.

These activities rely on goods and services available for free thanks to natural systems that provide viable soil, stable climate and good water resources. The analysis carried out by FAO and Truscot studied agricultural and animal farming practices of over 40 countries that represent 80% of four agricultural crops (maize, rice, wheat and soya) and four of the significant commodities of animal farming (beef, milk, pork and poultry). In particular, they analysed the economic benefits deriving from a range of alternative agricultural and animal farming methods in four case studies: animal farms in Brazil, rice production in India, soya in the USA and wheat in Germany.

The study showed that today animal farming costs amount to about $1.81 trillion. In Brazil alone, the environmental impact of beef production is estimated at $600 million, mainly due to damage caused by deforestation. While in China, pork production costs $327 million deriving from soil conversion for feed production.

While $1.15 trillion is the total annual cost deriving from the production of crops. China is ahead with $130 million for maize production, followed by the USA with $90 million mainly deriving from soil use modifications and water pollution. In Germany, wheat production costs $62 million, due in particular to water pollution from nitrogenous fertilizers.

But – as highlighted by the study – these environmental costs can be curbed by adopting alternative approaches. For instance, they could be reduced by 11% by decreasing the number and concentration of livestock in Brazil, allowing the vegetation to grow back.

If the economic and financial world began to understand the costs involved in the replacement of stocks and services nature offers us, the economic impact of the environmental degradation would be easier to assess.

According to a recent study carried out by Robert Costanza and other famous ecological economists, between 2007 and 2014 – due to ecosystem degradation – humanity lost $20 trillion a year in environmental services. And the study only took into consideration “direct” ecosystem services: fresh water to produce food, soil quality, wood value etc. It did not account for “indirect” ecological functions such as the preservation of top predators in ecosystems’ food chains, crucial in guaranteeing their productivity and resilience. Or pollinators necessary to keep agriculture alive. 

But even so, it is clear that the entire global economy is heavily subsidized by nature. If productive economic systems should pay for these services, even if underestimated, there would be a 27% net reduction in the global economy output. 

This is why it is vital to spread the results of the many authoritative international programmes including The Economics of Ecosystems and Biodiversity (TEEB), Intergovernmental Platform on Biodiversity and Ecosystems Services (IPBES), and the Natural Capital Project.

All these analyses show how managing ecosystem sustainably is crucial and advantageous for all countries and economic sectors. It is fundamental to start a new economy based on the paramount importance of natural capital and its protection, otherwise we will have no development or wellbeing alternatives.

 

 

FAO, Natural Capital Impacts in Agriculture. Supporting Better Business Decision-making, June 2015; tinyurl.com/q5b3kh7

Costanza R. et al., “Changes in the global value of ecosystem services”, Global Environmental Change, v. 26, May 2014; tinyurl.com/m9l4t6n