Again and again I hear proponents of a new and better farming system explain how it will improve agriculture, the environment and the climate, and at the same time increase profits in farming. Today, it is regenerative agriculture, yesterday it was market gardens and permaculture. The day before it was organic agriculture. But the advocates are not really understanding how commodity markets work.

In the Wealth of Nation, after the famous example of how the pin factory radically increases the productivity in pin making, Adam Smith continues to discuss how division of labour and markets are tied together: ”As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market”. I believe this observation is correct, and that it explains why a globalised food system never can work in favour of organic or regenerative farms.

The problem with a (globalised) commodity food system is not that the food from “other countries” is bad or that “they have lower standards than us”. Of course that could be true (It is said in most countries so there must also be some logical gap there….), but it can also be the opposite. No, the problems are on another level:

Those are relevant objections. I will not discuss them here, however.

What I do want to discuss are three other aspects of commodity markets, which work against the principles of regenerative/organic/agroecological (take your pick) farming:

  • A global food system can not be circular; you can’t close nutrient cycles and return all those nutrients embedded in the food to the land from where it came.
  • The global (the bigger) market drives increasing division of labour, which drives increasing specialisation, mechanisation and larger scale. This makes it very hard to compete with a regenerative organic production.
  • The global market disconnects and alienates people from the rest of the living, replacing lived experiences and wisdom with theoretical information and abstract knowledge.

While they, seemingly, have little to do with each other, they are essentially three sides of the same coin.

A global food system can not be circular.

While there are many ways, by which a farmer can activate nutrients tied up in the soil and get nitrogen from the air by nitrogen fixing bacteria, there is a real challenge to get sufficient nutrients to plants. Most organic or regenerative farms have some level of nutrient import to the farm. It can be compost materials from outside, manure from conventional farms, some feed or mineral feed to livestock etc. On a larger scale and longer term, it is absolutely critical that most of the nutrients shipped away from the fields is recycled back to the fields (I am well aware of that as sewage systems are working now a lot of nutrients are wasted and the rest is mostly contaminated, so you don’t want the sludge anyway – it is also not allowed in organic farming). But this is hard enough to accomplish on a local scale, and simply not practical on a global scale.

The global market drives specialisation and increasing scale.

For some, this might be a truism which merits no further explanation. However, I realise from many interchanges in person, in lectures and on social media that many people don’t see to see this logic.

The division of labour is a fundamental principle of the modern industrial society. It is based on that each individual person makes a narrow set of work with the assistance of machinery of some kind (a tractor, a drill, a truck or a computer). As Adam Smith notes with his pin factory example, this increases the productivity per man-hour tremendously. The twin to this specialisation and division of labour is a bigger market. With a bigger market, division of labour and specialisation can increase and with more specialisation you need a bigger market.

If you grow fifty different crops, it is incredibly hard to mechanise the production as each crops needs some special technology, storage facility, even skills and knowledge. In addition, each crop needs special packaging materials and logistics and perhaps different markets as well. If you want to be efficient you need to narrow the number of crops, and you will also narrow the “qualities” of these crops. It makes no sense to grow twenty varieties of tomatoes. The same goes for livestock

According to the same logic of division of labour, you will also specialise within the production. Instead of regenerating the fertility of the soil, you will buy bagged fertilisers, instead of spending energy on increasing bio-diversity on the farm, you buy pesticides to manage the increase in pests caused by the narrow number of crops. Instead of raising and training your children (or the neighbour’s children), you buy labour. Instead of being a jack of all trades you have to become a wheat/carrot/chicken producer. And so it goes on and on. Note that it is the scale and kind of the market that is relevant here, not if it is national, regional or “global” per se. What counts is the competition and volumes traded. A global market is just the worst because it is the biggest with the fiercest competition.

Some seem to believe that “the problem” is big companies, big food industries or big supermarkets. For sure they are problematic. But they are largely a result of the big market. Some say there is too little competition in the market as the markets are dominated by a few actors. But the reality is that the more competition and transparency there is in a market, and the bigger it is, fewer actors will dominate. The internet is of course the best place to verify this statement. In terms of services over the internet, such as online shopping, movie streaming, translation services or audiobooks there will be a few actors that take most business. The same goes for the digital infrastructure where companies like Google, Microsoft, Meta and Apple dominate their respective slots. I recently wrote an article about this phenomenon in the farm input industry.

Of course, there will be the odd farm that will survive in niches of the (global) market. There will be the extraordinary cheese or wine that can be exported to another continent. There was a demand for exclusive products already thousand years ago. There will always be some space for extraordinary products for an elite, and that is fine for those engaged in it, but it has very little relevance here.

For other small and diverse producers, the global market has no opportunities. They can only survive in special niches. e.g. there can be the producers of vegetables that supply a particular high end restaurant (here I would recommend this entertaining video on the farm-to-table movement, by Morgan Gold, even if I don’t fully agree with the conclusion/solutions in the end). Or a farm with grass-fed chicken that delivers directly to consumers. Or a CSA, a farming club, a Reko-ring or similar. All of them are intentionally shielded from the large anonymous mass market. Some believe that they should be scaled up, but that will not work. They could be scaled out, though.

I talk mostly about small scale, but what about diverse and large scale? Also here I am sure you can find the odd example that is working. Before you point to one of those farms, please check how they make their living. In my experience if such a farm is an organic, regenerative exemplary farm it will most certainly have external income, or being owned by someone rich enough (did I say King Charles?) or selling their services as advisors or selling their story on social media or whatnot. On big farms the logic of specialisation is the same, or even stronger, as the rate of mechanisation will be higher on a larger farm.

Commodity markets disconnect and alienate people from the rest of the living.

This is not a bug, no negative side-effect, but an inherent feature of commodity markets. The whole point with bigger markets is to break the tie between consumers and producers, between the people and the land. The only relationship that is supported in these markets are transaction with money, a fetish devoid of any meaning. Exchange of goods is not only about the goods themselves, equally important are the social connections and the meaning conferred in the exchange.

This is also one major reason for why so much of the food debate is mistaken and based on very theoretical discourses. The conscientious global consumer tries to avoid palm oil from Indonesia, beef from Brazil and a few more symbolic products. But, by and large, there is no way to assume responsibility of your footprint in a global market place. It is also a reason for why some people, without blinking, can recommend you to eat stuff that is produced on another continent, without contemplating what that really implies.

There is also a system scale objection to the idea that farms will be profitable once they do everything right. For sure, if one farmer adopts a unique technology, it can give her an advantage, but when everybody adopts it, prices will fall and you are back to square one. One agriculture economist in Sweden once stated that prices of agriculture products is determined by the lowest compensation where there still will be people willing to farm. This will continue to be the case as long as there is over-production in the farm sector, which most likely will continue also in the future. The opposite, under-production, may be a good deal for farmers, but socially and morally repulsing.

Therefore, it is better to realise that the anonymous mass-market, the commodity market, the global market – call it what you want – is not at all conducive for a diverse, organic, regenerative, agro-ecological farming, and to realise that converting the food system is as important as converting how you farm. It is essential to re-connect food to the land and the process of farming. This will give food an enhanced value not only as a supplier of energy and essential nutrients, but also as a source of meaning and experience of the land, of the living and of the people producing food.Email