Food and agriculture: shifting landscapes for policy

Where does our food come from? A popular slogan tells us that our food comes from farms: “If you ate today, thank a farmer.” Supermarkets cater to the same idea, labelling every bag of produce with the name of an individual farm. Food marketers, farm lobbies, agriculture ministries, and politicians from rural districts all perpetuate the notion that our food comes from family farms, invariably portrayed as sunny smallholdings on verdant hillsides.

But the reality is that modern food is no longer a product of small farms, and hardly even a product of the agriculture sector. Changes in global food systems have created an ever-widening divergence between what is produced on farms and what consumers purchase, at least in rich countries. In modern economies, food is primarily a product of the manufacturing sector and the service sector, rather than of farms and agriculture. When we sit down to eat, we should not only be thanking farmers; we should also be recognizing the people who never get mud on their boots: chemists and clerks, truckers and traders, baristas and bakers. These office, factory, and shop workers arguably contribute as significantly to our food supply as farmers themselves.

The economic facts are striking. Of a consumer dollar spent on food in the United States, less than 20 cents goes to farmers. Food processing and food service are both larger sectors in terms of value than agriculture. US labor force statistics show that as many people work in food and beverage manufacturing as on farms. Employment in restaurants and food services is far higher still. (Similar figures hold for the United Kingdom and most other OECD countries.)

The dwindling role of farms in the food system stems from massive shifts in consumption, production, and trade. With respect to consumption, a key driver has been the growing demand for convenience. This reflects underlying shifts in the value of time, especially women’s time, as there are far more women in the workplace today than there were when food was mainly a product of small farms. With this rise in the value of time, demand has increased for prepared and processed foods that reduce or minimize the effort required around mealtimes (as documented recently in this Food Policy paper). This has shifted much food consumption out of the home:  Figure 1 depicts a striking trend for the US; within the next ten years, about half of consumer food expenditure will go towards food consumed outside the home.

On the production side too, major shifts have taken place in the structure of farms and in the location of production and processing. Most farms remain small, even in rich countries, and the largest farms tend to be family-owned and family-managed. But large farms increasingly dominate production. A recent study from the USDA’s Economic Research Service found that more than half of US crop agriculture in 2007 took place on farms with over 1,100 acres of cropland. Animal agriculture has also consolidated rapidly; by 2007, half of American dairy cows were kept in herds of 570 cows or more, compared to a comparable figure of 80 cows in 1987.

Large farms are massively capital-intensive. On the largest US crop farms, an acre of wheat, maize, or soya requires less than three hours of labour per year. By one estimate, the value of land, equipment, and structures required for a medium-sized grain farm in the midwestern US might approach $8 million.

Today’s large commercial farms are miles removed from the mixed crop and livestock establishments of yesteryear. The farms of storybooks have not disappeared; but they have lost market share to large and ultra-specialized producers.

Farm production is still to some degree tied to geography and climate. But processing has become global. Since processing can take place anywhere capital and technology are available, it has become mobile. Food trade has shifted away from bulk commodities towards processed and semi-processed foods (Figure 2). Food value chains frequently now involve multiple countries, with processing carried out in places that are neither the sources of the raw commodities, nor the ultimate destinations of consumption.

For instance, the US National Oceanic and Atmospheric Administration notes that “today, up to 90 percent of seafood consumed in the United States is imported…. A significant portion of this imported seafood is caught by American fishermen, exported overseas for processing, and then reimported to the United States.” As reported in another USDA study, the US exports whole fish to China and imports fish filets; fresh-caught shrimp are similarly exported to countries in Asia from which shelled and deveined shrimp are then re-imported. Similar examples can be found in fruit processing. As consumption shifts steadily towards manufactured foods, the logic of manufacturing value chains applies, and processing will move ever farther from the farm.

But globalized and commodified food chains raise major regulatory issues. Who monitors these globalized food chains? Does the food industry require different regulation than, say, the shoe industry? Does it require different institutional arrangements than those that were constructed to manage an early 20^th century model in which farmers sell more or less directly to nearby consumers?

How should food system governance take place today? At present, producers and retailers in rich countries engage in substantial self-regulation, driven by legal liability concerns and reputational risks. In some cases, this leads large industrial producers to advocate for government regulations so stringent that they effectively proscribe artisanal production. But this is not an adequate solution. When self-regulation breaks down (as with the UK horse meat scandal of 2013), consumers are quick to call for reform and regulators enact patchwork measures. But arguably more fundamental changes are needed, beginning with a forward-looking assessment of how the food industry is evolving. The starting point must be a recognition that food no longer comes from farms – and that governing the food system requires a broader understanding of how food is produced in the 21^st century.

Featured image credit: Veranotrigo by Soil-Science.info. CC-BY-2.0 via Wikimedia Commons.