Sunday, July 17, 2011

Capital vs Income: An Economics Argument for No-till and Beyond.

     Economists and businessmen understand the difference between capital and income very well.  However, the predominant actions of business over the last few decades would tend to suggest they don't - like the majority of us.  This is from not having a complete picture of the production cycle or rather the omission of certain parts of the production cycle.  

     Let's draw the distinction of capital from income.  Income is what the majority of us receive for doing work.  Income is an operating cost to the production cycle.  Capital is what is invested into the production cycle to get it started.  Income to a business is synonymous with profit after all operating costs are paid, and capital investments are recouped.  Income has a bit of flexibility to it and so it is able to fluctuate.  Capital is more rigid and is a fixed cost.  Technically, income could go away and the business would still operate (basically a non-profit model) but if capital goes away the business will shut down.

     Wendell Berry, if you don't know of him you need to, is one of the smartest men we have alive.  In his essays, he makes the point that we do not consider Nature as part of our economic equation.  More specifically the process in which Nature uses to create the assets that we use.  So I'm going to borrow a term coined by E.F. Schumacher in his book "Small is Beautiful: Economics as if People Mattered," called "natural capital" to combine their similar points of view.

     The easiest example of "natural capital" is to talk about fossil fuels.  Schumacher states, "No one, I am sure, will deny that we are treating them as income items although they are undeniably capital items.  If we treated them as capital items, we should be concerned with conservation: we should do everything in our power to try and minimize their current rate of use; we might be saying, for instance, that the money obtained from the realisation of these assets - these irreplaceable assets - must be placed into a special fund to be devoted exclusively to the evolution of production methods and patterns of living which do not depend on fossil fuels at all or depend on them only to a very slight extent."[1]

     Students of permaculture will be familiar with David Holmgren's book, "Permaculture: Principles and Pathways Beyond Sustainability."  For those not familiar with the idea of permaculture it comes from the joining of several words:  permanent culture and permanent agriculture.  In his book he makes the statement that we have squandered the first half of our fossil fuel supply.  Essentially treating it like income.  When we should have been using it to build solar panels and wind turbines and such.  The idea is that it takes a great deal of fossil fuel to produce the energy to produce these sustainable items.  That's the catch 22.  So waiting till we run out of fossil fuels to start building them is not going to work.

     Using fossil fuels as the example I'd like to look at another "natural capital" that we have overlooked - top soil.   1/32 of the earth is suitable for growing food.  Of that 1/32 only the top 3-4 inches of that land is considered top soil.  Check out this link at the American Farmland Trust. It views the world as an apple as it divides it - very poignant.  Each year we lose billions of tons of topsoil due to erosion from chemical and mechanical cultivation.  Even organic farming practices uses mechanical cultivation to turn the soil for planting and weed management.  This exposing of the soil allows for it to dry out and it then becomes vulnerable to wind and water erosion.  Not to mention it is nearly void of microbiological activity which has been proven to enhance plant growth.

     This happens because soil is seen as an input into the production process and not as part of the capital investment.  Therefore we "spend" our topsoil as if it were income in the process.  Relying on amending the soil with fertilizers and compost, which becomes part of the operating costs, rather than figuring out how to conserve our capital asset.  The fable of the "Goose who lays the Golden Eggs," is very apt here. This process's only rational ability to continue is to continuously increase the amount of compost and fertilizer that is applied to maintain a sense of fertility.  Thereby increasing operating costs which will be translated to the consumer in the price of food.  Not to mention this has minimal effect on the erosion that is occurring because the field will soon be tilled in again and exposed to heat, wind and water.  Take into consideration that it has taken thousands of years and the movements of glaciers to create our current top soil and you can see that, even with the addition of compost, we won't be replacing the lost top soil anytime soon. 

     The first step in solving this crisis is to minimize the erosion and even try and stop it.  This is done in several ways.  First the soil needs to remain covered at all times.  The vegetative growth will act as a protective layer against wind and the harsh rays of the sun.  The vegetative cover will provide a layer that reduces evaporation as well.  The soil being cool, shaded, moist, and protected from the wind will promote microbiological activity in the soil which will translate into healthier soil and therefore healthier plants.  The root structure of the vegetation holds the soil in place from water erosion.  The stalks of the vegetation will also slow down the movement of the water preventing it from gaining the momentum to cause wide-scale damage.  The slowing down of the water also allows the water time to percolate into the surrounding soil.  This not only feeds the vegetation and keeps the soil moist it also recharges the groundwater systems.

     The second step, and much harder to convince in modern agriculture, is the planting of perennials.  I've always had trouble with the words annuals and perennials when it comes to plants.  Think of annuals as having to be planted annually or every year.  Where as perennials are planted once and live for many years.  This allows for a sophisticated and complex system of root structures to develop.  Even perennial plants will have roots that die and when they do they decompose deep into the soil supplying much needed nutrients.  Additionally the deep root systems can transport nutrients to the soil's surface from many feet down. Nutrients that would otherwise be unavailable to shallow rooted annuals.  Lastly, the deep and complex root system creates a natural and complete irrigation system to water the soil and recharge the ground water supply the most effectively.

     So how can modern agriculture produce food and conserve it's topsoil.  Ideally the best way would be to inter crop vegetable and grain crops in between the best perennials of all - trees.  This is called forest farming.  However, forest farming is not compatible with modern harvesting techniques which make it inefficient on a commercial scale.  At least for now.  Another solution is to plant only perennials.  Wes Jackson at the Land Institute is developing a perennial wheat.  You plant it once, harvest it, and it grows back again.  Very similar to mowing your lawn.  But we don't have perennial   everything and with  most of the vegetables we eat the very act of harvesting kills the plant.  Enter no-till.

     No-till, in my opinion, is still at best a transition process.  It is a very good process and one we need to switch to now but it is only a bridge to the ultimate solution of forest farming.  In no-till the crop is planted without tilling and in between the crop is planted a cover crop.  A cover crop acts like a living mulch - choking out weeds and helping to retain moisture in the soil.  A cover crop will also add nutrients to the soil.  Ideally what one plants for harvesting should have a symbiotic relationship with its cover crop.  When it comes time to harvest, the crop is cut and the waste is left in the field.  Then the cover crop is cut and also allowed to decompose in the field.  After a certain amount of time of being left fallow, the field will be planted again without tilling the soil.  The previous crop and cover crop provides a mulch/compost into which the new crop will grow.  This is vaguely simulating how Nature would rebuild soil.  The only problem, and hence why I only consider it a transition process, is the cutting of the cover crop still opens the soil up to some erosion.  Albeit a minimum amount.  However until the agricultural industry can make the mental shift from concentrating on efficiencies to concentrating on effectiveness, this is what needs to happen.

     Once we start treating the top soil like a capital investment and begin conserving this limited resource, we will see considerable savings in operating costs.  No longer will we have to import compost and fertilizer into the fields.  (This brings up another interesting subject of nutrient loss.  When we here in California expend our dwindling water resource and our compost and fertilizer to create nutrient rich food, then ship it to New York where it is consumed and disposed of, we have effectively shipped off our water and nutrients as well.  Requiring us to import more nutrients and water which drives up the costs for everyone.)  The amount of water usage can be, by my estimates and they are only based on experience not empirical data, effectively cut in half.   In areas of good rainfall I believe irrigating fields could be stopped all together and reserved for cases of severe drought.  Interestingly enough if we were to plant more trees we could effectively alter the weather pattern preventing such droughts.

     The ultimate goal is to produce nutrient dense food sustainably that is the most affordable and available to all.  This can only happen when we start taking into account the "natural capital" into our production process.  By conserving our soil we can eliminate most operating costs and thereby increasing profits.  Profits that then should be translated to the customer in the form of cheap, healthy food.  Effectively creating a sustainable solution to the food justice issue. Such an economic model would also make chemically grown food too expensive to produce and usher back traditional organic farming.  Not to mention it would make our world a better place.

[1]  E.F, Schumacher. "Small is Beautiful:  Economics as if People Mattered," 1973.  Harper & Row Publishers, Inc.

1 comment:

  1. I stumbled across your blog looking for that very Schumacher quote. Great post. These ideas really are at the core of the changes that need to be made. I imagine you've read it already but if not I recommend 'Collapse' by Jared Diamond. Brings the consequences of our present misdeeds into focus. I couldn't subscribe to your blog BTW. Got a bunch of gobbldygook when I tried.

    We have just completed our first season on our farm (Helios Farm) up here in Wakefield, Quebec, Canada. It is the beginning of realizing what has been a long-term yearning. I love the universality of the philosophy that this metier engenders; I've never met you, don't know you from a hole in the ground, but I felt an undeniable kinship towards you upon reading your posts.

    Keep living the good life; I'll do the same.