More Liberal voices. A Response to the EC Consultation on Sustainability of the Food System

Lithuanian Free Market Institute in partnership with F. A. Hayek Foundation (Slovakia), Civil Development Forum (FOR) (Poland), Institute of Economic and Social Studies (INESS) (Slovakia), Institute for Market Economics (IME) (Bulgaria), Centre for Economic and Market Analyses (CETA),  (Czech Republic)and the Friedrich Naumann Foundation for Freedom (Germany) contributed to the public consultation of European Commission on sustainability of the food system, which took place from 09.07.2013  to 01.10.2013.

Sustainable food

Sustainability of the Food System

Objective of the consultation

A growing number of analyses question the long-term sustainability of the current trends in the production and consumption of food.  Many of today´s food production systems compromise the capacity of Earth to produce food in the future. Globally, and in many regions including Europe, food production is exceeding environmental limits or is close to doing so. Nitrogen synthesis exceeds the planetary boundary by factor of four and phosphorus use has reached the planetary boundary.

Response in brief

Even though at first it may seem that food systems and sustainability <…> is first and foremost an issue of economics and economic growth.<…> The Commission presents environmental bias when talking about sustainability of food.

The Oxford English Dictionary defines sustainable as “able to be maintained at a certain rate or level”. Therefore we propose that when talking about “sustainability” we should use the classical definition of the word, meaning nothing else, than the ability to maintain certain rate or level. This definition must be free from ideological, political, social, environmental or any other biases. This does not mean that the aforementioned issues are unimportant. But it would benefit the discussion and understanding if we separated “sustainability” from other terms like “environment-friendly”, “contributing to climate change”, “producing best value for producers”, “healthy” etc. In other words, if one thinks, that protection of the environment is the most important factor in food production, one should state this, and not use the word “sustainability”.

Even though at first it may seem that food systems and sustainability of it are agricultural, biological issues or any other for that matter, actually it is first and foremost an issue of economics and economic growth. If a farmer engages in commercial rather than subsistence agriculture, that is selling his crop or livestock, he is no longer just a farmer; he is an entrepreneur as well. Therefore it is a matter of economics and competitiveness.

The Commission presents environmental bias when talking about sustainability of food, we are running into the problem of using different definitions of sustainability once again. Why is the Commission stressing „environmental impacts“ above and in place of other impacts. Obviously environmental situation has effects on our ability to produce food in the future. But it would be more precise and useful if the Commission used precise wording. For example, the issue could be renamed „improving our technical knowledge about impact of current agricultural practices on the ability to produce food in the future.“

Option (e) implies that products or diets have hidden costs or externalities (implying that the externalities are negative). While externalities (whether positive or negative) are a useful theoretical concept, it is unfeasible to even try to quantify them. First, calculation of externalities of diets are impossible due to different products or diets having different effects on different people. Second, if we are talking about calculation of externalities of products, what should be the object, which experiences externalities? Soil? Biosphere? And for what periods of time? And should we include positive externalities as well? Such calculation would undoubtedly be subjective and biased towards the beliefs and assumptions of the evaluator. Commission has no business in trying to implement theoretical concepts in reality.

Higher animal welfare standards are not in line with food sustainability, because it leads to excessive regulations that in the end increase prices for the consumer. By that food is becoming less sustainable, because affordability is diminishing especially for people with low income. Sustainable sourcing of key food commodities does not need any promotion. It is already in the self-interest of people and communities from which the food commodities are coming to grow and trade production in such ways, that they can carry on doing it in the future. Organic production is possible on a small scale, more so yield levels would fluctuate a lot more, because of non-use of pesticides, herbicides and chemicals would make crops more susceptible to diseases, weather changes, water quantity and quality. It would also require natural fertilization and this is a source of large greenhouse gas emissions, because methane is produced by cattle. It is unclear why organic production is mentioned here at all, considering that organic production usually leads to smaller yields, larger requirements for land, and the produce is usually more expensive. Only by increasing food production, making it cheaper, and securing our ability to produce it in the future we can be approaching sustainability in food production. Therefore intensive agriculture, or more precisely, agriculture that concentrates on food production under market condition is the main driver towards food security.

To begin with, if we are consistent with the definition of „sustainable“ (maintaining current rate), we must acknowledge that only production can be sustainable. „Sustainable consumption“ is a meaningless and obscure term. Furthermore, what does „sustainable“ diet mean, what should it mean, and how can a government body decide what it is, given different needs, habits and preferences of each individuals? Interference with consumer choice by the government is not warranted by any objective evidence except for ideologically driven ideas that certain dietary choices by certain individuals are worse than others. Choices of diet should be left completely to the individual, his preferences and abilities. There might be some room for initiatives for labeling and promotion of sustainable food in the retail markets. Retailers might want to target consumers who prefer “sustainability”. However this should be done strictly by market actors (retailers, producers, suppliers, farmers) to encourage the consumer to purchase certain food products. Furthermore programs like Green Public Procurement guidelines are unneeded, distortionary, and usually lead to higher government spending and / or higher prices for consumers. Considering that public procurement must observe the principles of impartiality and procure procedures at the lowest cost in order to save taxpayers’ money, it would be completely inappropriate to distort the process of public procurement in order to promote certain agricultural products or practices.

It is general knowledge that many food products are suitable for consumption even after the expiration date. Therefore it would be feasible to allow adding additional date on the label. The product could thus have two “expiration dates”. One would indicate the recommended date by which the product should be sold. Another could indicate the date by which the product should be consumed. This would allow the retailers to reduce amount of spoilt products, to donate them or to sell at reduced price.

There are five actions that do not need any actions (binding targets for food waste, food waste reporting requirements, education campaigns on food waste prevention for adults, dissemination of information regarding sustainable food preparation and using leftovers, and developing/disseminating information for consumers to avoid over purchasing). These actions would only create more burden for businesses, would be a waste of money and time as in the case of campaigns for adults. Retailers could provide additional information about storage of food products, however currently there are enough data on labels regarding food storage. We must not forget to use common sense as well regarding food storage. Producers could improve labeling regarding the expiration date of food products, but it is difficult to imagine clearer labeling than expiration date or due-date or best-before.

Develop the system of using ‘best-before’, ‘use-by’, ‘sell-by’ dates, which could be used in labeling food products. Under such system retailers could still freely sell products which have passed the “sell-by” date, but haven’t passed the “use-by” date. This would reduce food waste in retail sector and allow economically disadvantaged groups to purchase food at discount prices.

Market actors are equipped with better knowledge to deal with future uncertainties, they can react more quickly and cost effectively. Market innovations, development of farming technologies, improvement in crop resistance to weather and disease lead the way to the day by day increased wellbeing of societies. However the current food system needs reform towards more market freedom, promotion of farming and entrepreneurship. Removing subsidies, quotas and regulations, not setting up policies or goals that promote certain agricultural sectors over other, certain crops over other are the path to sustainable food system, which is based on clear and simple rules.

Subsidies to farmers in EU are one of the main aspects of unsustainable food system in terms of economics energy use and land use. If famers claim that they need subsidies to carry on farming, it means that that type of farming (cattle growing, crop growing) is not sustainable, because there is alternative use for that land time and money, which are more valued by market. In addition subsidies are tax money which is given to farmers to continue their unsustainable farming. This as well does not encourage farmers to act as businessmen, but they instead act as lobbyist, and it does not translate into innovative business (farming solutions), development of new farming methods, technologies and searching for markets to sell their goods. The whole European CAP should be dismantled. This would lead to truly sustainable agricultural production, saving of taxpayers’ money, establishing market-based prices for agricultural outputs (products) and inputs (fertilizer, machinery etc.). Food security can only be achieved by allowing markets to function, not by stifling them.

There are two important actions. The first one is to run a “fitness check” of all food policies at all levels and if they are aligned. This would be a retrospective look on policies, rules and regulations adopted and measures could be taken regarding if such policies, rules and regulations need reform or abolishment. The second action is related to subsidies which are environmentally harmful. However, not only environmentally harmful subsidies in the food sector, but all farming and food subsidies are harmful and should be removed.