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Real Food Is Not Fungible: How Commoditization Eliminates Nutrition, Impoverishes Farmers, and Destroys The Earth
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September 21, 2011
4:33 am
First-Eater
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This article should, by rights, be an entire book: the consequences of agricultural commoditization are profound and far-reaching. By necessity, I am concentrating on a few key points.

Where's The Real Food?

One of the largest movements in 20th century agriculture was the commoditization of food.

In 1900, 41% of the US workforce was directly employed in agriculture, and each farm produced over five different crops for sale—not counting food consumed on the farm or sold locally, outside the commodity system. Furthermore, 60% of Americans lived in rural areas. (Source: USDA.) This means that the majority of Americans either grew their own food,…

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September 21, 2011
4:52 am
eddie watts
Guest

great read, thanks.

and posted to fbook too :D

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September 21, 2011
5:13 am
Halifax, UK
Gnoll
Forum Posts: 365
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June 5, 2011
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The music analogy really works. Great article for people new to the paleo lifestyle.

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Living in the Ice Age http://livingintheiceage.pjgh.co.uk
September 21, 2011
5:28 am
Tim W
Guest

Now I want some Wagyu beef...

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September 21, 2011
5:30 am
Adeline
Guest

Very informative, thank you !

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September 21, 2011
5:30 am
Franco
Guest

Well said!
And here in europe they're trying verry hard to expand the fungibility to all (plant) matter. E.g. there's a norm for cuccumbers which gives min-max for length, diameter and degree of bend even. If you're outside the norm your cuccumbers are not fit for trade in the EU!
And I know of no consumer here who gives a rat's ass about the shape and size of the cuccumber as long as it is tasty. A quality which is somehow lost in the commoditization process not only in cuccumbers. Dutch "water-tomatoes" come to mind as well.
If I think about, skinless chicken/turkey breasts seem the most fungible meat.
But industrial grain feed beef and pork aren't far from it as well.
Farmed salmon? One like the other.
How boring...

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September 21, 2011
6:03 am
Stipetic
Guest

Franco, all your talk about cucumbers brought back memories of my days clubbing along the Mediterranean (just replace cucumbers with johnsons)! Thanks dog taste is where it's at!

Anyway, J, thanks again for the stimulating read.

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September 21, 2011
6:04 am
Txomin
Guest

Well done, well done.

There is a lack of awareness regarding the consequences of the industrialization of agriculture. Your exposition is excellent. The current situation is evidently unnatural and, thus, as unfeasible as toxic (both long and short-term).

I have just read a post by Nikoley that also takes advantage of the Paleo angle to bring back to the fore essential matters (his post is more "out there" topic-wise but just as on target).

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September 21, 2011
6:34 am
Jen
Guest

Vague thoughts here:

I am no fan of the industrial food supply that is malnourishing much of the US population, but I have to wonder where we would be today if we still had 41% of the workforce directly employed in agriculture. Who would be doing... all the other stuff? Commoditization allowed a huge amount of resources to be diverted from agriculture to other economic activity. Real food might be vastly more expensive than it would seem at first glance.

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September 21, 2011
7:11 am
Jan's Sushi Bar
Guest

@Jen - all what stuff? Employment-wise, the number of people who provide services outnumbers the people who produce things 5-to-1 in the United States alone (111.5 million compared to 22.1 million).

Another excellent post, JS - between you and Richard Nikoley, y'all have gotten me ALL political today. :-)

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September 21, 2011
7:28 am
Brandon Foss
Guest

Jen:

Perhaps the 14 million unemployed workers we have right now.

http://www.tradingeconomics.com/united-states/unemployment-rate

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September 21, 2011
7:50 am
Sean
Guest

While you know I'm a big fan of real food, I think a lot of what you wrote violates basic economics.

First of all, just because something is a commodity, doesn't mean there's no quality assurance to it. Steel is a good example of that. American steel went bankrupt partly because it was producing low-quality high energy open hearth steel and relying on handouts and tariffs to prop it up. At the same time US Steel declared bankruptcy after having just built an expensive obsolete factory, smaller American steel factories were doing quite well. Steel is a commodity, yet high supply led to higher quality.

That's pretty typical, actually. I remembered reading about that many years back re: coffee. Many governments had subsidized their subsistence farmers to switch to coffee thanks to high prices in the eighties, the result was that coffee was deeply oversupplied. This drove the crappier stuff off the market. People became more aware of high-quality coffee of course. Same thing has happened with wine as so many countries have come online to compete with the traditional producers like France and Napa Valley (who itself was an upstart not so long ago). Now with all the competition from Australia, Argentina, Chile, etc, wine has gotten better and cheaper. Of course, wine has never really been a commodity but the principle is the same. In order to compete in a commodisized market one must distinguish themselves on quality.

We are seeing the same thing happening now as there is more of a market for high-quality food. The main problem for a small producer trying to get their high quality food to the market is the government's insisting on regulating what is organic or whatever. It is even worse here in Europe with these regional appelations and an EU bureaucracy that loves to create paperwork and regulations.

As far as future traders somehow living off of the poor farmer like a parasite, I could spend another five paragraphs explaining what's wrong with that, but I'll just say it is bullshit. Currency traders help businesses by minimizing the risk of international trades. By betting on the future value of the dollar in euros or whatever. Same thing with commodities futures. I'm betting that a pork belly will be worth this much in six months, it's my risk and no one is forcing you to trade with me. On the other hand, the government IS forcing me to handing over part of my income so that it can choose to subsidize corn farmer, and whoever the hell else it is politically expedient to grease. Those guys are the ones I have the problem with.

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September 21, 2011
8:08 am
Paul Verizzo
Guest

"Hidden in plain sight," is a phrase that often comes to mind with revelations like this one. Just like bird food parading as human food leaves a wake of health devastation, but eating hearthealthywholegrains is so, um, ingrained in our culture that few see the problem.

I have some other favorite "Hidden in plain sight" observations of modern life, like all the increase of mental illness, behavioral disorders, suicide, etc. as we become less and less communal. Think primal mental health. We NEED to be part of society, have face time, not Facebook. But I fear the genie is out of the bottle.

Anyway, I ramble........

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September 21, 2011
9:13 am
UK
Gnoll
Forum Posts: 49
Member Since:
June 14, 2011
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I can recommend Colin Tudge's So Shall We Reap for an excellent discussion on the race to the bottom that is the Western agricultural model.

The majority of our food flows through highly restricted and controlled markets (not free markets), that are run by a handful of corporations who have vertically and horizontally integrated throughout the food chain and who profit from the hegemony, soaking up most of the grants and incentives made available by governments, whilst avoiding taxes through the use of offshore 'shell' companies and flags of convenience.

Tudge's most pithy statement is "we can envisage a post-industrial society, but we cannot envisage a post-agricultural society". That is a deeply profound observation.

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September 21, 2011
10:24 am
WereBear
Guest

Wonderful article, and I would add that the other problem is that what they call food; is not.

Commoditization is the bane of the past century. Everything is homogenized and standardized; the music industry decides what we will listen to, and the publishing industry decides what will get put in books, and the agricultural industries decides what we are allowed to eat.

But the rebellion is already underway; bands and writers and farmers are all finding their own distribution chains. Spread the awareness... there is a better way!

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September 21, 2011
10:42 am
Kirk
Guest

For those who enjoy reading completely different viewpoints, check out the "Room for All" essay by Matt Ridley. Available at the rationaloptimist.com blog.

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September 21, 2011
11:52 am
Kaa
Guest

I am kinda curious of what do you think the alternatives (on the social, not personal level) are.

Do you want 40% of the US population to go back to being small farmers? How do you think that will work out?

Artisanal, hand-grown food is *expensive*. Who'll be able to afford it?

Productivity on small farms is notoriously low. What do you think will happen to the economy if a large number of people switch from whatever they are doing to small farming?

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September 21, 2011
1:58 pm
First-Eater
Forum Posts: 2105
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February 22, 2010
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eddie:

You beat me to it!

Paul:

"But it seems so unreasonable when YOU say it."  Exactly my point: if we actively encouraged commoditization with anything else but food, it would be immediately obvious why it's a stupid idea.  If a good can be commoditized, the market will do it by itself, with no help require from our government.

Tim W:

Apparently you have to grain-feed cattle for a long time to make them that obese...just like humans.

That being said, it is incredibly delicious.

Adeline:

You're welcome!

Franco:

There's a difference between "truth in labeling" and "you can't sell it unless it's a certain size".  From what I understand about EU commodity rules, they're often arbitrary and very restrictive, preventing people from selling goods at all.

Stipetic:

I do my best.

 

More to come!

JS

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September 21, 2011
2:35 pm
First-Eater
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February 22, 2010
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Txomin:

I've said for some time that "paleo is not just a diet and exercise plan".  Richard needs to hurry the hell up and read The Gnoll Credo.  

Jen:

There is the unemployment Brandon mentioned.

More importantly, as Jan mentioned, artificially subsidizing grains simply shifts employment to things that become cheaper as a result of the subsidies, like fast food and 'family restaurants'.  I'm not sure flipping burgers or waiting tables is a big improvement over growing food.

Then, recall that produce is still usually planted and picked by hand...there is a lot of seasonal migrant labor not counted in that 1%.  It's the planting and harvesting of grain that we've successfully mechanized.

Finally, keep in mind that as of 1900, tractors and cars didn't exist!  People still plowed their land with animals, and transported their food to market via horse and buggy.  We've invented quite a few labor-saving devices since then...so it is likely that the percentage of agricultural employment would decrease somewhat, and farm size would increase somewhat, independently of commoditization.

Most importantly, the extra costs we pay in health care for an obese, diabetic nation are difficult to pin down...but they're staggering.

Jan:

Exactly.  Given the number of people employed in dead-end jobs like call centers and waiting tables, I'm not sure we have an improvement to crow about.

Brandon:

Yes.  And that 14 million figure is dramatically understated, as it doesn't count those who have stopped looking, or the underemployed.

 

More to come!

JS

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September 21, 2011
3:47 pm
First-Eater
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February 22, 2010
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Sean:

I don't think we're arguing, except where you write that "a lot of what you wrote violates basic economics".  I take umbrage at that: I think you're reflexively projecting statist beliefs to me that I don't have.  Be warned that I'll throw down with you or anyone on any economic issue, anytime, anywhere :)

Moving on…

In a free market, commoditization would occur to the degree the market demanded it, and no more.

We don't have that.  As I mentioned, our government subsidizes commoditization through price supports on certain carefully selected crops — primarily corn, wheat, cotton, and soybeans.  This discourages the production of the food we actually want to eat, and encourages the production of fungible commodities.

"In order to compete in a commodisized market one must distinguish themselves on quality."

By definition, it is impossible to compete in a commoditized market on quality — because the definition of a commodity is “a good supplied without qualitative differentiation across a market.”  

The only way to compete on quality is to sell outside the commodity market.  Again, this is perfectly reasonable, assuming you have a free market where transportation is not a monopoly (railroads — oops), where storage is not a monopoly (grain elevators — oops), and where trade is unrestricted (government regulations on buying and selling food — oops).

Further discussion on "why real food isn't a commodity":

Raw materials, such as steel, make excellent commodities…because fungibility is a desirable characteristic for raw materials.  When casting, forging, or machining metal parts, I want to know that the metal I receive is absolutely consistent from run to run. 

Furthermore, raw materials have no value to us, as consumers: I'm willing to be that none of us has ever taken delivery of a contract of steel, copper, or October corn, because we have no way to process them into a finished product.  Even a blacksmith buys blanks cut and shaped to appropriate size.  The value is added by the manufacturers who turn raw materials into a usable, finished product.  

So it is with grains: I'm willing to bet no one here has ever bought raw wheat stalks and threshed, winnowed, and ground them into flour.  Most people don't even buy flour: we buy bread, cookies, and crackers. 

Real food, in contrast, is not a raw material: we eat it in something approximating its natural state.  In fact, that's basically the definition of real food: something we can either eat raw or prepare in our kitchen.  In this case, we value homogeneity far less than we value subjective perceptions like taste and texture, and difficult to measure qualities like nutrition.

Furthermore, homogeneity is usually achieved only by descending to the least common denominator, as I mention above in the article.

Re: trading

"Currency traders help businesses by minimizing the risk of international trades. By betting on the future value of the dollar in euros or whatever. Same thing with commodities futures."

Are you claiming that a significant proportion of commodities trading is farmers hedging their production — not traders and trading houses attempting to profit by outguessing the farmers, or by large firms frankly manipulating commodity prices and front-running their clients?  (See: $150+ oil.)

I think you have a naive view of real-life markets.

Furthermore, it is an indisputable fact that any profit made by traders comes out of the pockets of farmers and consumers.

 

In closing: commoditization of food is not primarily driven by consumer demand.  It's driven by government policy — and this inappropriate commoditization is destructive to food quality and our health.  Clear?

JS

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