True-cost accounting in food and farming

Patrick Holden / Sustainable Food Trust.
Patrick Holden / Sustainable Food Trust.
Unsustainable farming systems that damage the environment and public health thrive at the expense of sustainable producers. Patrick Holden makes the case for "true cost accounting" ...
We must account for the real costs of food, or sustainable food systems will never break through to the mainstream.

We live in a time when the need for sustainable food and farming systems has never been more urgent. Earlier this year, over 200 leading scientists signed a consensus statement on Maintaining Humanity's Life Support Systems in the 21st Century. It expressed deep concern that society has reached the tipping points for a range of environmental and social consequences to our behaviour, which could significantly degrade life on earth by 2050.

Our current industrialised agriculture is at the very heart of these impacts. Increasing demand for food due to population growth, plus changing patterns of consumption as we eat more meat and heavily processed foods, means our systems of farming and food production are coming under increasing pressure.

The agricultural crisis

Yields of conventionally produced food are falling. Soil the world over is being degraded ten times faster than nature can restore it. Widespread damage is being done to the earth's ecosystems through the use of chemical pesticides and nitrogen based fertilizers. Farming is making an immense contribution to greenhouse gas emissions.

In short we are fast approaching a sustainability cross-roads. The long-term viability of our current globalised food system is being seriously called into question.

We need an alternative system of production, one capable of producing sufficient quantities of healthy, nutritious food, whilst replenishing and restoring the vital systems on which humanity is entirely dependent.

The problem is that when it comes to our economic and political environment, the cards are stacked against sustainable food systems to such an extent that I have come to believe they will never break through into the mainstream.

Accountability is non-existent

Currently, food producers are not financially accountable for the impacts of production on environmental and public health. This means that the polluter doesn't pay, and those that are producing food sustainably are not rewarded for the positive environmental outcomes they generate.

This economic system privileges unsustainable practices by redistributing the costs of their damaging impacts from the private sector to the public sector. So, for example, we pay for the cost of cleaning pesticide and fertilizer residues out of our water, in our water bill, when this cost should be more appropriately borne by the polluter.

Farmers and food producers that aim to make products which respect and replenish the natural environment, pay a great deal of additional cost and reap little reward for their efforts.

However the retail case for sustainable products is based entirely on the producer's ability to engage consumers in the story of their product, thus convincing them to part with more money. This limits the market potential of sustainable food to those who are wealthy enough or care enough to pay a premium for the perceived benefits.

We must account for the real costs of food, or sustainable food systems will never break through to the mainstream.

The underlying problem is that it is more profitable to produce food in a way that is damaging, than in a way that delivers a range of environmental and public health benefits. This can only be changed by introducing 'true-cost accounting' for our food systems: a system of economic accountability which would make tangible the costs associated with different systems of production.

Calculating the real cost of food

So what is the real cost of our food? A growing group of environmental scientists, activists and thinkers, myself among them, are getting closer to determining it. The Sustainable Food Trust convened a first meeting last spring in Kentucky, that brought together this diverse group of people who come to the issue of 'true-cost accounting' from varying perspectives.

The Working Group includes Pavan Sukhdev, who has been instrumental in putting a economic value on nature's 'ecosystem services'; Pete Myers who has been looking at the use of endocrine disruptors (chemicals which disrupt hormone function) used in agriculture; and others with their own specialist focus. The Group will work to put hard monetary figures on a range of 'externalities' both positive and negative associated with our food production.

'Externalities' are those costs which sit outside what we pay for when we buy our food. Take for example the £2.50 chicken that Hugh Fearnley-Whittingstall campaigned against in Chicken Run. 

Its externalities include the impact of greenhouse gas emissions from forests that were cleared to grow the soya and maize the chicken is fed on; the cost of cleaning up the nitrates and pesticides used to grow the crops; the cost of treating infection, and even deaths, due to antibiotic resistance that arises from their routine use in intensive production chicken sheds; and the disappearance of the family farms that used to raise flocks of free range chickens on a smaller scale, creating rural jobs.

Externalities are subsidies paid by society

All these externalitives serve to subsidize its price and make it cheap - while society as a whole is left to pick up the costs. Chicken is the most widely consumed meat, so these costs when multiplied are hugely significant. Those cheap chickens aren't so cheap after all!

The key aim of our Workiing Group is to place a clear monetary value on these 'externalities'. In turn this will enable the introduction of taxes and incentives that could ensure that farmers and food producers who cause damage to the environment and human health will be penalised, while those who protect the environment and promote human health would be properly rewarded for these beneficial outcomes.

This would rebalance our food system and ensure that sustainable food production was more economically viable than unsustainable food production.

Join the movement!

Our conference, True-Cost Accounting in Farming and Food Production takes place on 6 December in London at the Royal Geographic Society. It is primarily aimed at raising awareness of the need, across a broad public, for true-cost accounting in our food. It will present some of the research we have carried out, and outline the policy shifts needed to create a more equitable economic environment for sustainable food practice.

Urgent change is needed to create a fairer economic environment, redirecting existing support to encourage resilient, food-secure production. True-cost accounting in our food is a critical part of this; by mapping a new economic model for farming and food, we can create a system that supports sustainable farming practice and opens the door to a sustainable food future.

The True-Cost Accounting in Food & Farming Conference takes place on 6 December 2013 at the Royal Geographical Society, London, UK. Tickets are available.

Patrick Holden is the Chief Executive of the Sustainable Food Trust.


More from this author