The agricultural industry is one of the biggest users of water, energy, and chemicals on the planet. Overall it poses one of the biggest threats to global biodiversity, which is why it deserves significant attention from the environmental community.

But when it comes to defining what is meant by “sustainable agriculture,” there is a lot of confusion. Many people think “organic,” or “local,” or “non-GMO,” or even “biodynamic.” It will come as little surprise that economists don’t think of the issue in this way; they primarily examine the basic conditions for the efficient use of resources in the agricultural sector.

The following outline is the beginning of what a move toward a sustainable agricultural system would entail:

1. Ending the full range of agricultural subsidies

It is impossible to even begin to work on a sustainable agricultural system when prices for agricultural goods are severely distorted by counterproductive government policies. The system of agricultural subsidies that exists in (mostly) the developed world is an anachronism that is an affront to any notion of sustainability. Farmers in rich countries are provided with a price floor for their products which leads them to produce more than they otherwise would; this leads them to farm marginal land and convert an excess of natural systems to food systems. The combined effect lowers the world price, thereby hurting farmers whose governments do not subsidize them (while helping the poor consumers of the world; more on this later). Most of these farmers are wealthy, making the current agricultural subsidy system inherently regressive, which runs counter to the social dimension of sustainability.

Eliminating agricultural subsidies should be a primary goal of all environmentalists, but the opposition to subsidies should not end there. Farmers receive many other types of subsidies in the forms of lower-priced water and energy. The water subsidies are particularly egregious in many parts of the country where water is a relatively scarce commodity and the value of water for environmental, industrial, and residential purposes is much greater than that for agriculture. For example, in any reasonable and rational water allocation scheme, water would not be used to grow alfalfa in the desert of California at a time when many of California’s rivers go dry, leading to the decimation of wildlife populations.

We all receive the energy subsidies that farmers do; mostly in the form of under-priced fossil fuels, which act as a passive subsidy. Since the price of carbon is not included the price of oil and natural gas these energy sources are cheaper than they should be in a well-functioning market that takes into account external costs.

If we phased out all of the direct payments to farmers and the water subsidies, and we accurately priced fossil fuels, the agricultural landscape would change dramatically, and in a much more sustainable direction. Farmers would be forced to use resources much more efficiently. The prices of resource-intensive products would also rise significantly, which would also lead to large shifts in consumer behavior (e.g. meat and dairy would be a lot more expensive relative to legumes, grains, and vegetables).

In addition, the issue of food miles would be at least partially solved by the fact that food would cost a lot more to ship, and thereby, demand would likely decrease for long-distance imports, causing a shift to more locally-grown foods. One downside to this is that countries that rely on food exports for foreign exchange might be harmed; this could partially be minimized by a move to high-value and specialty crops for which consumers would be willing to pay a premium.

2. Supporting the World Trade Organization

The WTO plays an extremely constructive role in moving toward agricultural sustainability. Its mission is to move the world toward a system free of subsidies, as well tariffs on agricultural goods, which provide another layer of price distortion. Unfortunately, the Doha Round is currently in its last throes because of the inability to agree on cuts in agricultural subsidies and tariffs. The power of the farm lobbies and large agribusiness throughout the world is disproportionate to its economic power, and until that can be curbed, it will continue to hamper efforts to move toward a sustainable agricultural system.

3. Providing access to food

As Amartya Sen brilliantly demonstrated in his landmark work Poverty and Famines: An Essay on Entitlement and Deprivation (and subsequent work), access to food is essentially an issue of access to money and resources that can be traded for food, not the absolute quantity of food produced in society. Put simply, in our international system, those with money have access to food.

This means that for those who are undernourished, the best option is to provide them with economic opportunities so that they can earn income or provide them with land and resources to grow their own food. While the latter course is attractive since it promotes a degree of self-sufficiently, it may limit people’s ability to climb the economic ladder; those who spend a large portion of their time engaged in subsistence work may not have the time to engage in economic activities that provide them with surplus and a route to a middle-class life.

4. Additional thoughts

  • The excellent international system of seed banks aids the cause of agricultural sustainability since all nations have access to the world’s shared genetic inheritance. Seed banks also provide an insurance system against the loss of agricultural biodiversity.
  • The issue as to whether GMOs are moving agricultural systems toward or away from sustainability is quite contentious. If, as the evidence appears to indicate, the overwhelming majority of GMO varieties are safe and do not present serious ecological or health risks, it seems that their potential to make plants more draught-resistant, productive, or nutritious makes them an asset for sustainability rather than a liability.
  • The issue of agricultural pesticides remains a serious concern, especially for consumers and vulnerable populations such as farm workers, pregnant mothers, and children. Much more research is needed to understand and evaluate both the individual and synergistic effects of these chemicals to which we are all exposed at increasing rates. Those that are the most toxic should be banned or severely curtailed while more benign substitutes should be developed for even those that pose less risk. This is one area where a more “command and control” approach is warranted, as opposed to “market-based” mechanisms, due to the uncertainty and our poor state of knowledge with respect to the effects of prolonged exposure to these compounds.