“In the face of a rapidly overheating climate, collapsing fisheries, degraded soil, depleted water resources, vanishing species, and other challenges directly related to agriculture, we can no longer afford to pursue a flawed accounting system.”
What is the real cost of food? Does the price we pay reflect the environmental impacts, the public health implications, or the global warming contributions of any one foodstuff? Generally, the answer is no. The easiest way to change what people buy, in turn, is to change the price of the good, making environmentally and socially beneficial products cheaper and harmful ones more expensive.
However, as I lamented in a previous post, meaningful science on what those prices should be is quasi-non-existent. But this will change soon – with the “Economics of Ecosystems and Biodiversity” project, which is starting an investigation on agriculture and food called TEEBAgFood study.
The study is designed to provide a comprehensive economic evaluation of the ‘eco-agri-food systems’ complex, and 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.
A first step in the exercise has to be to create a framework of what to count, and how to do so. This is what the image above shows: green arrows are positive unaccounted benefits of production, red arrows negative ones. These come into play when looking into different production systems: even producing the same good, like chicken or shrimp, could have a very different price tag depending on what practices are followed, and how they are integrated in the surrounding environment.
In a next step, TEEBAgFood has commissioned a series of exploratory studies that apply the TEEBAgFood framework to specific products: livestock (dairy, poultry and beef production); rice; palm oil; inland fisheries; agro-forestry; and maize. These studies should come out shortly.
The central discussion in any of these valuation exercises is always: does this put Nature or culture ‘on sale’? Do we, by virtue of assigning a dollar value, say that it’s all right to buy this product if the consumer is willing to pay the price? The mid-term study report actually addresses this concern in a roundabout way: “It is difficult (and at times inappropriate) to value cultural services in monetary terms, but this ‘limitation’ sits comfortably with the TEEB framework in general and TEEBAgFood in particular. TEEB is not in any way supportive of the commodification of nature. These values can be expressed in qualitative terms, or quantified, or quantified as well as valued. […] While some of these services or disservices cannot be (and from an ethical standpoint, should not be) reduced to a monetary value, they still need to be recognized and accounted for in decision-making.” Basically, they are saying “these issues will be ignored as long as they are not on the accounting balance sheet, but putting them on there does not mean that we think of them in mere dollar terms.”
I look forward to reading – and reporting on – the exploratory studies. It will be a serious challenge for the research team to identify, weigh and assign values to all of these flows, and if done well, this could serve as a really meaningful precedent for future investigation. Let’s see what we should really pay for a meal of steak and rice!