Farming. Why do they do that? (part 2)

In today’s conversations we hear the word sustainable a lot. A big question is whether farming is sustainable. Would we farm if the practices weren’t sustainable? We know we need food, but why do we farm the way we do at all?

Sustainability can be defined in a lot of different ways. There is environmental sustainability (is it good for the environment?). There is economic sustainability (can we make a living, not go into debt, etc.?). And there is social sustainability (will it culturally be accepted?). For me, sustainability has to meet all three criteria and farmers today strive to be sustainable in all three areas.

Today’s complex system of farmers specializing in one or two crops or livestock and then trading with domestic and international markets was born out of trying to achieve maximum efficiency. Economists have long recognized the welfare gains from specialization and trade. The case for specialization is perhaps nowhere stronger than in agriculture, where the costs of production depends on natural resources, such as temperature, rainfall, and sunlight, as well as soil quality, pest infestations, and land costs. Different crops demand different conditions and vary in their ability to adapt.

almondsSo California, with mild winters, warm summers, and fertile soils produces a huge number of almonds, strawberries, and grapes. whatIsAnIdahoPotatoIdaho produces 30% of the country’s russet potatoes because warm days and cool nights during the season, combined with rich volcanic soils, make for ideal growing conditions. And here in Iowa our rich, deep soil, stable rainfall, and moderate climate make it an ideal location to grow corn and soybeans.

In 2014, according to the USDA, Iowa averaged 182 bushels of corn per acre. Alabama, in contrast, averaged only 100 bushels per acre. Is it any wonder Iowa planted more acres of corn than Alabama?

This system provides for what economists call comparative advantage. And by specializing in growing one or two crops, farmers can capitalize on another principle – economies of scale. If a farmer grew 50 different crops, they might need 50 different types of tractors to harvest each crop. But all that equipment would be very expensive. They would also need to find 50 different buyers to contract with and sell their crop because most buyers are specialized. Negotiating all of those contracts would be very time consuming.

Economies of scale means that whoever is best at producing corn should produce corn and exclusively corn so that whoever is best at producing strawberries should produce strawberries exclusively. Intern_agr_trd_final_loresThe two can then trade and have more corn and strawberries that they could individually produce. Iowa excels at a lot, but when it comes to agriculture we produce corn, soybeans, pork, and eggs like no one else. These products get traded all around the world and become important to the state’s economy and the world’s food supply.

This system of trade does have some costs. Obviously the farther commodities have to travel, the more transportation will cost. More fuel will be used in the process of transporting them. What we have to consider is whether the benefits of this system of trade outweigh the costs. Nearly every economist will tell you the benefits far outweigh the costs. Our challenge then becomes how can we minimize those costs? How can we minimize the amount of fuel used and other potential environmental impacts like carbon emissions?

Producing food locally does minimize some of the environmental impacts. But a system of local food production could probably not sustain the world. One economist estimated that to produce the same amount of food as we currently do locally, as much as 60 million acres would need to be put into production around urban centers. Most urban centers don’t have that land available. In addition, to respond to different climates and insects in those areas, the use of chemicals might grow by 23% to produce those crops. That seems unsustainable and impractical.

Today we need to think about the sustainability of agriculture and our food production system holistically. Is it sustainable from an economic perspective? What practices can we implement to improve efficiency? Is it sustainable for our society? Will the general public accept changes to the system? Is it sustainable for our environment? What solutions can we put into practice to reduce environmental impact or even work in harmony with nature?

None of these are simple questions or have easy answers. Top minds are working on these questions today. We also need students to become the top minds of tomorrow to continue to work on these issues. Will you discover the next agricultural improvement?

-Will

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