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On the market for sustainability

Prompted by reading Jared Diamond's Collapse, I did a bit of information foraging on the progress of some sustainable environmental practices.

One of the bright sides in the US is organic agriculture, which has been growing by more that 20% annually for over a decade, and about 40% of consumers have bought organic food. The growth has taken organic food mainstream - most organic food is now bought in ordinary supermarkets, and organic companies, for better and worse, are being bought out by big food conclomerates.

Organic food still accounts for only 2% of the overall food market. But 20% annual growth can lead to a "tipping point" in a decade or two, when production techniques considered "niche" today become the norm.

The big deal, it seems to me (with no special expertise other than homework) is soil health. With organic farming, soil fertility is renewable, but conventional agriculture mines the soil. Soil degradation can lead to disastrous Easter Island-style problems.

Fisheries and forests are also being mined to the point of collapse. Jared Diamond mentioned the Marine Stewardship Council as the most reputable organization that is certifying fisheries for sustainable practices. The Forest Stewardship Council provides similar certification for forestries.

The activities of these groups seem less mature than organic agriculture. There are 11 fisheries that are certified by the MSC today, and 40 that have applied for certification. According to the most recent newsletter, 4% of the world’s total wild fish supply is now in the MSC assessment process. Right now, though, the only sustainably produced wild fish you can by at Whole Foods is Alaska Salmon.

The FSC claims that it has certified about 42 million hectares in more than 60 countries.out of 3.9 billion hectares of forest worldwide. The FSC partners with major buyers of wood products, including Home Depot and Kinkos.

When I lived in Boston (til 1999), I had friends who were excited by Community Supported Agriculture, also known as Farm Shares. This is essentially subscription farming. A small farm sells subscriptions to a growing season's worth of produce for $300 - $400. A successful CSA might have a few hundred customers. Every week, the customers are delivered a box of fresh produce.

At the time, this seemed to be socially beneficial but economically challenging, and that picture doesn't seem to have changed. A successful CSA generating $350/month from 250 customers yields $525,000 for a farm with a few employees and capital costs. Most farmers aren't doing nearly that much business. The median number of customers was 20. According to this survey, the median gross income from a CSA farm was $15,000.

A successful CSA, like this one requires a challenging combination of farming, person-to-person customer service and grass-roots marketing savvy. Given the economics and skill mix required, I wonder whether a franchising program of sorts would help?

With the cost of land near customers, it's not clear that this could ever be profitable without systemic land subsidy. Of course, the current agricultural system is heavily subsidized, but the subsidies support big corporations. And there is plenty of private support for institutions (churches) that provide services communities find valuable. But today, only a tiny minority feel that they want to subsidize a local farm.

In any event, it's clear that organic farming is economically viable in today's market system, and sustainable fish and forests might be. But CSA looks like it's not.

Meanwhile, the global water supply is integrated very poorly into the market system, so agricultural and individual users of water have little interest to conserve. Full privatization is wrong too -- poor people would die of thirst.

Global warming needs political solutions, and the US government has its head in the sand while the ice caps melt.

Potentially promising progress in some areas, solutions further away in others.

Posted by alevin at January 6, 2005 05:05 PM | TrackBack

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