12 May 2016 Story Nature Action

The Economic Invisibility of Agriculture

We need to change the way we do intensive food production, not only for our health but for the health of the planet.

Agriculture is at the centre of human well-being and sustainable development. It has influenced our value systems, our cultural heritage, the structure and location of our communities, and the development of other sectors in the economy.

However, the ties between food systems and human health and cultural heritage are increasingly becoming invisible, as are the impacts that our production systems are having on nature.

This invisibility discourages stewardship of our natural resources and fosters their unsustainable use, generating negative impacts for both present and future generations.

A 96-page TEEB for Agriculture and Food (TEEBAgriFood) Interim Report , published in December 2015, seeks to explain the complex links between ecosystems, agriculture and the food we eat.

TEEBAgriFood is a research initiative that applies this approach to agriculture and food, providing detailed insight into the importance of ecosystems and biodiversity, and the (visible and invisible) impacts of different production systems on human and ecological well-being. The initiative also showcases relevant policy opportunities for promoting sustainable development.

Owing to access and distribution problems, some 2.3 billion people in developing countries consume under 2,500 kcal/day, while 1.9 billion in developed countries are consuming more than 3,000 kcal/day. While many are dying of want and starvation, others suffer from lifestyle diseases stemming from over-consumption.

This need not be so. Approximately one third of the food produced in the world for human consumption every year — around 1.3 billion tons — gets lost or wasted.

One of questions the study aims to answer is: Are we paying the correct price for our food? In some cases, we may be paying too little (as the economic system does not capture the full range of public costs through negative impacts on natural and social capital), and in other instances we may be paying too much.

“Cheap food can be very expensive in the end, [causing] extra costs to human health but also to biodiversity,” says study leader Alexander Müller.

However, just because food has a price tag does not mean that all ecosystem services must have one. Indeed many should not and cannot, such as the spiritual values that agricultural landscapes provide us. These are real ecosystem services, they affect our well-being – in fact they can provide purpose to our lives – but they will not have a dollar price tag.

The TEEBAgriFood Interim Report is the first major technical output following several months of preliminary research on different agricultural sectors and alternative production systems. It includes a number of exploratory studies on agroforestry, inland fisheries, livestock, maize, palm oil and rice.

Positive impacts of agriculture
As well as providing the food and sustenance we need, agriculture and food systems also create employment and income. The sector employs one third of the world’s economically active labour force, or about 1.3 billion people.

An estimated 2.5 billion people are involved in full- or part-time smallholder agriculture, while over one billion people living in rural poverty are dependent on agriculture for their livelihoods. As such, agriculture is the socio-economic backbone of rural landscapes.

Agriculture also makes positive contributions to nature, if well-managed. The agricultural sector does not produce only food – it also produces feed for animals (for human consumption), fuel (both traditional fuels and modern biofuels) and fibre for artisanal and industrial production. Thus the agricultural sector contributes inputs to many other industrial sectors.

TEEB
What is TEEB? The Economics of Ecosystems and Biodiversity (TEEB) is a global initiative focused on “making nature’s values visible”. Its principal objective is to mainstream the values of biodiversity and ecosystem services into decision-making at all levels. It aims to achieve this goal by following a structured approach to valuation that helps decision-makers recognize the wide range of benefits provided by ecosystems and biodiversity, demonstrate their values in economic terms and, where appropriate, capture those values in decision-making.

Health and biodiversity impacts
“TEEBAgriFood specifically wants to capture the values of ecosystem services and biodiversity across different agricultural systems where a variety of management practices are used,” says Müller.

“We look at the impacts arising from the production, processing and distribution of food on natural and social capital, and analyse both the health impacts of consumption patterns and the impacts of the systems on human health.”

Globally, an estimated two billion people are experiencing micronutrient malnutrition. Vitamin A deficiency – the greatest preventable cause of needless childhood blindness and increased risk of premature childhood mortality from infectious diseases – still affects 250 million preschool children and a substantial proportion of pregnant women in lower-income countries.

In some African countries, yields from rain-fed agriculture could be reduced by up to 50 per cent by 2020 owing to climate change. This is likely to aggravate the burden of undernutrition in developing countries, which currently causes 3.5 million deaths each year.

How we grow our food also impacts human health via environmental factors. In Sumatra, recent peat fires associated with clearing of agricultural land have forced the evacuations of infants from the region with air quality indices remaining above 1,000 for several weeks (>300 is deemed dangerous).

There is also growing evidence of adverse health impacts from exposure to agrochemicals. Moreover, it is estimated that 52 per cent of land used for agriculture worldwide is moderately or severely affected by land degradation and desertification. Agriculture is thought to cause around 70 per cent of the projected loss of terrestrial biodiversity. In particular, the expansion of cropland into grasslands, savannahs and forests contributes to this loss.

We depend on nature more than we think
All of these invisible as well as visible impacts will need to be assembled and evaluated through a universal framework, in order to provide analytical consistency and comparability across systems, policies and business strategies.

These impacts might be created by one agent in society but borne by others; that is, they are “externalities”, whether positive or negative. The large negative externalities arising from our eco-agri-food systems complex can be addressed by a range of regulatory reforms, policy reforms including fiscal policies and incentives, and market-based mechanisms.

A universal, widely accepted framework for recognizing, demonstrating and, where appropriate, capturing the values of these externalities will play an important role in addressing this challenge. Furthermore, to be comprehensive, all hidden costs and benefits of different food systems must be assessed in their entirety, both in terms of their life cycle and their impacts on all dimensions of human well-being.

The full range of stakeholders will need to be involved in managing and reducing negative externalities and increasing the provision of positive externalities, says the report. Such stakeholders include farmers, agri-businesses involved at all stages of the value chain (in food processing, distribution and disposal), government entities (at local, national, regional and international levels), and citizens.
The TEEBAgriFood study is designed to demonstrate that the economic environment in which farmers operate is distorted by significant externalities, both negative and positive, and a lack of awareness of our dependency on nature.

It seeks to overcome the common practice of viewing ecosystems, agriculture and food systems as distinct silos. A selective analysis, not recognizing agriculture holistically, leads to suboptimal decisions with far-reaching consequences.

For more information see: www.teebweb.org/agriculture-and-food
For information on TEEB events at the United Nations Environment Assembly in Nairobi, Kenya, on 23-27 May 2016 see: http://www.teebweb.org/event/unea-2/

Related Sustainable Development Goals