Carbon Farming to Reverse Climate Change

This paper outlines the global threat from Climate Change and proposes a simple economic model as a practical solution through which land use innovation can drive behaviour change and reverse global warming. The planet is warming, we are losing the race to save all the inestimable physical wealth and cultural value that humankind created over the centuries and yet we have singularly failed to use the most efficient tool for reducing carbon dioxide levels: photosynthesis. Nothing else comes close to sucking carbon out of the atmosphere, yet we neglect it.Two decades of policies to address the rising threat of catastrophic climate change have focused on reducing emissions. They failed, however, to slow the increase in greenhouse gas levels. Instead, directly and by default, government policies have brought about continuing increases instead.

Forestry and farming are the cheapest and most effective ways to take carbon out of the atmosphere, sequestering it in the vast unexploited reservoir of the soil and trees. Yet instead of actively pursuing these low-cost options we have deforested and degraded forest carbon and soil sinks.  How can we fix this?

The “4 per 1000” (‘Quatre pour Mille’) initiative launched at the Paris COP21 aims to do just that, by rewarding carbon farming.vBritain is a signatory and a Forum and Consortium member.  “4 per 1000” states that, if farming and forestry increased soil organic carbon annually by four parts per thousand per year, that would be enough to totally offset the annual 16 billion tonnes increase in greenhouse gas levels.  With carbon a marketable crop, we could stop worrying about global warming.

In 2015, the French National Assembly responded to ‘4 per 1000’ by setting a €56 (£50) a tonne carbon tax to comes into effect in 2020.

Carbon emissions reduction policies have failed so far:  

  • HM Govt has spent over £1.5 billion supporting Carbon Capture and Storage (CCS), the idea that you can capture CO2 emissions and bury them securely in the ground. For CCS to work and be effective it would cost at least €70 per tonne CO2 stored and require an increase in fossil fuel use of 35%.

  • The voluntary market has created credits for 1 billion tonnes of CO2 in the past 10 years. That’s a mere 1/500 of emissions. Cap and trade is subject to political vagaries. The European Climate Exchange and the Chicago Climate Exchange went bust in 2010 when EU political decisions led to a gross oversupply of carbon allowances.

  • The EU Renewable Transport Fuel Obligation requires mixing sugar beet ethanol, rapeseed oil or palm oil with petrol or diesel. 7 million tonnes of the world’s annual palm oil production of 66 million tonnes is burned as biodiesel, much more than is consumed as food in the EU. Land across the EU is degraded by intensive production of sugar beet and rapeseed for biofuel use, with negligible reductions and, even in some cases, increases in CO2.

The “4 per 1000” initiative is predicated on there being a price on carbon, whether emitted into the atmosphere or removed from the atmosphere. The Government sets a price for carbon and all emissions of CO2 are paid as part of a company’s tax bill, declared as part of its annual returns.  If a company can purchase carbon offsets for less it can deduct these offsets from its tax bill from carbon aware farmers. 

What would happen if there were a £50 per tonne CO2 price?

  • Nitrates, pesticides and herbicides would become uneconomic in many applications and farmers would minimise or abandon these inputs

  • Farmers would increase soil carbon by the use of grass leys and compost. They would minimise tillage and grow green manures to keep ground cover all year round

  • Carbon from straw, sawmill waste and forestry arisings would be converted into biochar (agricultural charcoal) then added to the soil to permanently enhance fertility and increase the carbon in the soil ‘carbon bank.’ Biochar is 80-90% pure carbon and stays in the soil for centuries.

  • Farmers would plant trees and hedgerows instead of growing rapeseed for biodiesel.

  • Wood burning would 10.5 billion be disincentivised. Wood would replace steel and concrete in buildings and homes. Wood is carbon negative. Modern cross lamination technology produces wood that equals or exceeds the strength, durability and load bearing capacity of concrete and steel.

  • The £1.5 billion Government subsidy to date wasted on carbon capture and storage research would be saved.

  • Peat use would end overnight - peat bogs capture more carbon than any land use other than salt marshes.

  • The sea would be more productive. Reduced fertiliser use and reversal of soil erosion would herald the end of harmful algal blooms that damage coastal ecosystems and fish stock populations.

Soil is the world’s most important and valuable commodity.  With a realistic carbon price, we would not suffer the resource misallocation of agricultural subsidies such as in the Common Agricultural Policy. 

Wind and solar are getting cheaper, but are nowhere near as competitive as 4/1000.  Money has been poured into supporting wind energy.  Every tonne of CO2 saved by onshore wind costs €162, from offshore wind £267.

A regenerating degraded forest can profitably generate CO2 savings for a cost of less than £5 tonne CO2.  Forestry management costs of planting, then thinning are minimal. Forests, pasture and arable farmland can easily sequester “4 per 1000 per annum.”  Yet we still lose 31 football fields per minute globally of productive agricultural land because industrial farming methods need take no account of carbon emissions.

How does a Carbon Price affect Fossil Fuel Prices?

A carbon tax would add $10 to a barrel of oil.  That is well within the range of fluctuations in the oil price (e.g. recent OPEC decisions).    

There is a financial opportunity. The Government simply establishes a tax that can be offset by carbon credits.  This then puts carbon dioxide, like any other valuable commodity, in the hands of markets.   

Fossil fuel emissions are 33 billion tonnes CO2 a year globally. At £50/tonne the market for carbon credits would be more than £1.5 trillion. If Britain leads on this by example then London would be the financial hub for carbon trading . The City of London has the depth of liquidity and the reputation for integrity that a global carbon market will need to succeed. 

The flow of cash into sequestration will be transformative.  Agricultural subsidies can fall away without impacting on land values.  Rural economies will be invigorated and farming can begin to remediate the misallocation of resources that current CAP policy encourages.

Auditing, validation and certification of carbon sequestration represents an opportunity for the certification industry, much of which operates out of the UK.

What is the scale of the opportunity?  Carbon sinks are primarily forests, fields and meadows.

The world has 1.5 billion hectares of arable land, 4 billion hectares of forest and woodland and 5 billion hectares of grassland, a total of 10.5 billion hectares that can be put to work removing CO2 from the atmosphere.  The annual net increase in CO2 levels is 16 billion tonnes.  If every hectare of our available land annually removed 4 tonnes CO2 then we would remove 41 tonnes of CO2 from the atmosphere every year, which would get us back to pre-industrial levels in just 35 years.

Is 4 tonnes CO2 per hectare realistic?

La Vialla, a biodynamic family farm in Tuscany, comprises 1440 hectares including arable, pasture, woodland, vines and olives. Taking this as an example and microcosm of the global distribution of land use types, the University of Sienna, using IPCC methodology has evaluated La Vialla’s annual carbon cycle for the past eight years. Calculations show that 4.24 tonnes of CO2e per hectare have been captured every year for the past eight years. 

 An obvious criticism of soil and forest sequestration is that it can be reversed through human and natural impacts.  A farmer can plough up the soil, a forester can chop down the trees and then much of the carbon captured is released back into the atmosphere.  An additional risk is that fire, war, flood or hurricane can reduce the carbon store.

A two-part payment can address this by providing:

  • a payment for the annual increment of CO2;

  • an additional ‘interest’ payment on the carbon that is stored in the carbon ‘bank.’

Soil is the foundation of our natural capital.  In a capitalist system it should be valued.

Farmers can insure against loss of carbon. Banks will advance loans against land to farmers who operate best practice carbon farming in the knowledge that the asset that is loaned against is increasing in value as its carbon content increases.

The cost of low carbon food would come down and the cost of high carbon food would go up. No longer would price be a barrier to eating food that is rich in nutrients, low in pesticide residues and which delivers tangential social and environmental benefits.

Carbon sequestration in farmland, pasture and forests is a cheap and effective way of reducing greenhouse gas levels.  Compliance with agreed Paris COP 21 targets will be unlikely if we continue to depend on technological solutions and biofuels to reduce emissions.  Using up precious soil and forests for the production of biofuels is wasteful, uneconomic and does nothing to help mitigate climate change. An economic incentive to maximise soil and forest sequestration of carbon dioxide is the most effective, practical and low- cost solution to achieving greenhouse gas reduction.


Harmony in food and farming












Capitalism Must Price Carbon - Or Die

This was a speech I gave at the Harmony in Food and Farming conference in Llandovery, Wales in July 2017.

Please click here to see video clips of the Prince of Wales, Patrick Holden and myself during the conference, which was organized by The Sustainable Food Trust. It aimed to develop an agricultural perspective on the ideas propounded in the book 'Harmony' by HRH The Prince of Wales and Tony Juniper.

In 1967 Joni Mitchell wrote a song called Woodstock that included these lines:

“We are stardust, We are golden

We are billion year old carbon

And we got to get ourselves

back to the garden”

We are indeed ‘billion year old carbon’ – the average person of about 80kgs/176lbs  contains about 15kgs/33lbs of carbon.  That ancient carbon is in our bones, our muscle, our fat and our bloodstream, as carbohydrate, fat, protein and other compounds.  The carbon in our bodies may have been previously in soil, in trees, in charcoal, in dinosaur turds, in mosquitoes, in honey...  It was everywhere before it ‘reincarbonated’ in us.  Carbon is immortal.   And it is stardust.

A billion or so years ago a very hot star kept getting hotter.  As it got hotter, it formed hydrogen, then carbon, then oxygen and then the other elements that we know.Sir Fred Hoyle, the great astrophysicist, described this as ‘stellar nucleogenesis’ – stars creating atoms.

When that star got too hot it exploded, became a ‘supernova’ and blasted its carbon, oxygen, hydrogen and rock into space.  Those chunks of rock and elements consolidated to form our solar system, with a sun that is still burning today with the remaining heat of the star that formed it a billion years ago.

Carbon is a promiscuous atom, it has 4 points where it can ‘mate’ with other elements.  That’s why there are so many carbon-based molecules and why carbon is the foundation of all living things.  Where there’s life, there’s carbon.

 According to Hoyle, life, in primitive form, was everywhere. This was called ‘Panspermia.’

Life in rock was called ‘Lithopanspermia.’

Life was fungi. That life bumbled along, depending on acid rain from the very CO2-rich atmosphere a billion years ago to break down carbon that was stored in rock. Then a miracle happened that changed everything.

Bacteria called cyanobacteria became able to combine carbon dioxide CO2 from the atmosphere with H2O water, using sunlight energy, to make carbohydrate C6H12O6, whilst excreting oxygen.  That carbohydrate was the sugar that is the basis of all living energy in plants and, eventually, in animal life too.

Once this happened, one can speculate that the rock-eating fungi saw their chance and organised the cyanobacteria into chain gangs, maximising their potential to capture carbon from the carbon dioxide-rich atmosphere, then at about 95% CO2.

These became algae, then simple plants, all busy making sugar to feed their own growth and, more importantly, to nourish the growth of the fungi that created them.

The fungi worked with other microbes in the soil, thriving on the sugar coming from the plants and delivering back to 'their' sugar-making plant all the mineral nutrients that they needed to grow.  Plants died and decomposed.  Fungi and bacteria died and decomposed. The carbon-rich detritus of their existence rotted down to become what we know as ‘soil’ – a most precious resource because it is the perfect habitat for fungi and bacteria and a rich source of recycled nutrients for plants.

This soil built up over millions of years, producing rich plant growth that eventually could support the large life forms such as dinosaurs and brontosaurs that existed in the ‘Carboniferous’ age.

This was the soil that early pioneers found in the American Midwest, rich in organic matter that ran very deep thanks to the 3 metre roots of prairie grasses.

When my great grandfather began to plough virgin prairie in Nebraska back in 1885, the soil on our farm contained over 100 tonnes of carbon as organic matter (organic matter in soil is approximately 50% carbon).  By the time I was born in 1944 this was down to about 20 and now it is closer to 10, totally dependent on fertilizer and pesticides.

Farmers are frugal, on our farm we grew and processed almost all the food that we ate, only buying in commodities like flour, salt, sugar and soap that we couldn't make on the farm.  Old calico flour sacks were washed and recycled as clothing, overalls for the boys and dresses for the girls.

Some enterprising flour companies printed pretty patterns on their flour bags when they realised this was happening.  My mother and her sister Thelma wore Nell Rose flour sack dresses.

The men were frugal too, but they were unwittingly wasting the most precious resource on the farm, the soil.  As the poet Wendell Berry put it:

 "We didn't know what we were doing because we didn't know what we were undoing." 

What we were undoing was all the decomposed plant matter that had been accumulating ever since those first Cyanobacteria sped up the process of life on Earth.

The destroyed soil lost its water holding capacity and lost its structure and integrity.  The result was the great Mississippi floods of 1927 when the river was 60 miles wide from April to October, sparking the Great Migration of African-Americans to northern cities as their farms were submerged for half a year.

Then in the 1930s the Dust Bowl triggered another migration, of "Okies" from their farms in Oklahoma, Kansas and western Nebraska as their farms became submerged in dust and dirt.  Richard St. Barbe Baker, an Englishman who founded Men of The Trees in 1926 and was a founder member or the Soil Association, helped restore the broken soils of the Midwest.  Operating under the banner of President Roosevelt's Civilian Conservation Corps he oversaw 3 million men who planted 10 billion trees between 1933 and 1940.  (These men also made good soldiers in WW2).

Tractors also played a destructive role, they could plough twice as deep as a horse-drawn plough, bringing up fertility and carbon from deeper in the soil.  My Uncle Floyd (pictured with me in 1947) still used horses to draw his 8-row planter because horses didn't compact the soil. Tractors did, weakening soil structure.

This experience alarmed people in Europe.  In Britain Eve Balfour wrote "The Living Soil" which proposed a new approach to agriculture that worked with nature and became known as 'organic farming.'

Eve Balfour collaborated with Dr. Innes Pearce who had shown at the Pioneer Project in Peckham that low income families did much better if they understood the basics of good nutrition and domestic hygiene.

Together they formed the Soil Association in 1947 on the premise that good farming would produce heathy food to nourish healthy people and create healthy societies.

My introduction to organic food and healthy eating came via the Japanese guru Georges Ohsawa, author of Zen Macrobiotics.  I imported the books to the UK and sold them via various bookshops.

I sold brown rice snacks at the UFO Club, where the Pink Floyd were the house band.  In February 1966 I opened a restaurant in Notting Hill to spread the macrobiotic message.  In 1968 my brother Gregory opened Seed restaurant, our larger restaurant in Bayswater, London.

Getting ourselves back to the garden


  • Balanced - Yin and Yang
  • Organic - Sustainable
  • Wholegrain
  • Food for health
  • 'Justice' (Fair)
  • Japanese (Miso, Nori, Tamari)
  • No additives, no hormones
  • Avoid sugar
  • Eat only when hungry
  • Exercise and Activity

Like the Stoics mentioned in the Prince of Wales’ book "Harmony" we believed in "an attunement between human nature and the greater scheme of the Cosmos."  We saw this through the prism of Daoist yin and yang philosophy and saw it as the key to a long and happy life ('macro' = 'big, long', 'bios' = 'life').

When we launched a range of macrobiotic food products in 1970 we branded them "Harmony" with a trademark that was a Yin Yang symbol with leaves and roots.

The company went on to become Whole Earth Foods a decade later - unfortunately 'Harmony' was a brand we couldn't register in our key European markets.

When I launched Whole Earth cornflakes in 1997 a friend Dan Morrell, who had founded Future Forests (later to become the Carbon Neutral Company) asked me if I'd like to take the corn flakes 'carbon neutral' -  a term he originally coined. .  He then commissioned  Richard Tipper of the Edinburgh Centre for Carbon Management to measure the carbon footprint of the cornflakes.

To our pleasant surprise we had to plant hardly any trees to offset the carbon used in growing, shipping, processing, packaging and distributing the cereal because the increase in the organic matter on the farms where the corn was grown almost completely offset the carbon emissions from everything else.  That's when I understood that, if we priced carbon into the cost of food, people would farm in a very different way.  It is now urgent that we do so

The UN has said that we only have 60 years of farming left. Farming generates more than a third of the annual increase in greenhouse gas. 

Volkert Engelsmann of IFOAM has calculated that we are losing farmland at the rate of 30 football fields every minute.  None of these losses come from organic farming, which is restorative and regenerative.

Industrial farming wastes energy.  It takes 12 calories of fossil fuel energy to produce one calorie of food energy.  A farmer with a hoe uses 1 calorie of human energy to produce 20 calories of food energy.  On a calorie-for-calorie basis a farmer with a hoe is 240 times more carbon efficient than a farmer with lots of equipment and inputs.  More than 30 years of trials at the Rodale Institute farms in Pennsylvania show that organic farming can sequester 1 tonne of carbon per annum.  They have also shown that once the soil is in good shape, the yields match those of industrial farming.

There is an effort afoot to attempt to bring market forces into bringing an end to this potentially disastrous loss of viable farmland.  Part of this is to attempt to appeal to the self-interest of companies like Unilever and General Mills whose supply chain will suffer if farmland becomes unviable and unavailable.

The French National Institute for Agricultural Research published a report in 2015 that stated that if farmers could sequester 4 parts per 1000 of organic matter,  that’s 0.04%, every year in their soil that would be enough to totally offset the annual increase in greenhouse gas emissions that is causing climate change.  That’s without counting any transition to solar, wind or greater energy efficiency.  As a result the French National Assembly voted a carbon price of €65 per tonne to take effect in 2020 and to include agriculture.  French Agriculture Minister Stéphane Le Foll then announced his ‘4 per 1000’ initiative which became part of the Paris Climate Agreement. It was endorsed at COP 22 in Marrakech and  36 countries so far have signed up to participate in restoring soil, the capital base of every nation.

The Prince of Wales co-authored a children’s book called ‘Climate Change’ that shows how carbon goes into the atmosphere and how it comes back into the earth and the sea.  The net annual increase is 16 billion tonnes.

A 3000 hectare biodynamic farm called Fattoria La Vialla in Tuscany Italy has its carbon measured every year by a team from the University of Siena.  La VIalla are sequestering ‘7 per 1000’ every year.  If everyone farmed like those 3 brilliant brothers  in Italy, whose farm is roughly 1/3 pasture, 1/3 forest and 1/3 everything else (grape vines, cereals, fruit, vegetables), then we would not only cancel out the 16 billion tonne increase in CO2 but would see a 12 billion tonne reduction every year.   Additional benefits would be greater biodiversity, cleaner water, less risk of drought and flooding and safer food.  (Their wine is pretty awesome, too).

Going beyond stopping degeneration is the regeneration movement.  This includes: Regeneration International, an offshoot of the mighty Organic Consumers Association in the US; the UN Food and Agriculture Organisation FAO; Soil and More (Netherlands); People 4 Soils (Slow Food movement); and Save our Soils (UK).

Corporations like General Mills are taking strong initiatives.  They have 100,000 hectares of land from their supply chain to be organic by 2020 as part of their carbon reduction policy.

But we still burn food.  One half of the annual USA corn crop is converted to ethanol using more energy to produce it than is embodied in the ethanol. It is mixed with gasoline to be burned as fuel.  The US is now exporting oil and gas yet still burns vast amounts of food in the name of 'energy security.'

We still destroy forests.  According to HRH the Prince of Wales this is at a rate of 15 football fields per minute.  If we valued the carbon stored in those forests at $20 tonne each hectare would be worth $15000.  Once the forest is cleared and then planted with soybeans it is worth $300 per hectare.  HRH described this in a speech in 2008 as ‘The greatest example of market failure in the history of capitalism.’

We still burn wood.  There is a false virtuousness to burning wood.  200,000 wood burning stoves a year are sold in the UK alone.  Wood smoke is more harmful to health than smoke from coal, oil or gas.  It takes a tree 50 years to sequester the carbon that is then consumed in a wood burning stove in 50 minutes. If a replacement tree is planted, will take 50 years to take that carbon back out of the atmosphere.

Wood has the resilience of steel and the load bearing capacity of concrete.  'Glulam' and other new wood technologies mean that wood can be used in 20 story buildings ('plyscrapers'), sequestering the embodied carbon in the wood for centuries.  We should never burn wood, it's a terribly inefficient waste of carbon.

Biochar, or charcoal made from wood, is a way to convert wood by-products into a carbon rich substance that can be put in the soil and will stay there for decades or even centuries.

It dramatically increases the population of beneficial microbes in soil, delivering a healthier plant immune system,  increased water retention and reduced loss of nutrients from leaching.  It is the best use for woody material that is not suitable for building or furniture making.  It is proven to help restore degraded soils and make them fertile and fit for farming again.  There are many examples of its benefits: tomato growers use it to combat plant diseases and increase yields; it cures honey fungus, ash dieback, chestnut blight, phytophthora and other tree diseases; it helps cocoa farmers overcome the devastating impact of black pod.  Stockholm uses it for all their new urban tree plantings as it enhances survival rates.  In Qatar the Aspire Park now use it for all their new tree plantings, with gratifying results.  Biochar in soil protects the beneficial microbes that are part of a plant’s immune system, its food supply and it’s water supply.

Farming and forestry would be transformed if carbon pricing were to be introduced for their activity.   People would plant trees instead of growing wasteful biofuels.  Prairie grass would replace corn in the Midwest.  Farmers would adopt regenerative methods such as organic and biodynamic farming.

Farmers would profit from farming carbon in 2 ways:

  1.  An annual payment for any increase in soil carbon and a charge for any decrease in soil carbon
  2.  An 'interest' payment on the actual level of soil carbon on the farm. This would be effective at around 10% annually.

A typical organic farm would benefit to the tune of approximately £100 per hectare and an industrial farm would have to pay a carbon tax of as much as £100 per hectare.  Farmers would change behaviour overnight and agribusiness behemoths like Monsanto, Bayer and John Deere would have to rethink their business model.  Taxpayer-funded subsidies to farming could be largely phased out as carbon markets would trade the carbon credits.

Farmers could also insure against catastrophic events such as flood and drought that might impact on their soil carbon.   However, farming with carbon in mind would reduce the likelihood of such damaging events.

Soil is Nature’s capital and the foundation of all life on Earth.  Capitalism is about valuing capital and pricing it.  Capitalism has failed to deal with carbon because industry, transportation and farming have been allowed to pollute freely at no cost.  All other forms of pollution are nowadays strictly controlled for wider social benefit. It is time for carbon to be priced and traded like very other important commodity.

We can get 'back to the garden' - the Garden of Eden.  We just have to price carbon and change the way we farm our beautiful planet.

"We are stardust, We are golden

We are billion year old carbon

And we got to get ourselves

back to the garden"

Subsidies - who really needs them?

Every year the governments of the world back winners in Big War, Big Ag, Big Energy and Big Pharma. The total bill to taxpayers? A stonking $3500 billion! Yes, $3.5 trillion. How much of this do you get? Nothing. You just get to pay for it. Unless you’re Big.

You can't blame the poor despised bankers for this one, this is our elected representatives doing what they are told by unelected powers and their well-connected lobbyists.

How does it break down? Big Agriculture gets $350bn a year to degrade our soils with chemical fertilisers, kill off our wildlife and living soil with pesticides, herbicides and fungicides. Big War uses up $1500 bn a year on wars of aggression. Direct and indirect subsidies to Big Pharma cost $1000 bn. And Big Energy gets $550 bn - mostly subsidies to help struggling oil companies discover more oil.

See the pattern? Tax the little guys and subsidise the big and powerful. Then they 'optimise' taxation to make sure they pay as little tax as possible in a place like Britain.

How does it feel to know that the tax on the money you've diligently earned without any help from the government is being spent to help powerful competitors drive you out of business?

Then there's the non-governmental subsidies, harder to measure but with the same effect. Supermarkets subsidise industrialised bread to lure customers to their stores. This is ruinous for small bakers who have to make their profit from baked goods.

Ocado - a direct competitor of many readers, has managed to lose £300,000,000 over the past 10 years and managed to lose £25 million last year, but in so doing it undermines retailers that have to make a profit or go under. This is a subsidy from private equity to gain future profit but its impact is to drive honest traders out of business and clear the field for another monster. Their investors probably include your pension fund.

Every £1 of subsidy from the EU costs us £2. How so? The administration, policing, storage and fraud inherent in running the CAP swallows half the money that goes to farmers. It would be cheaper to give every food shopper a 'CAP tax back’ at the checkout and dismantle this unwieldy system. They claim subsidies help small farmers but the fact is that smallholdings and small farms began to disappear as soon as we joined the CAP.

The Common Agricultural Policy is up for reform in 2013. They've been ‘reforming’ it ever since the 1970s. Because of our subsidies, farmers in other countries can only compete by exploiting slave labour, degrading soil, destroying rain forests and poisoning themselves and the environment with nasty chemicals. Activists campaign to support the forests and indigenous people and to ban slavery, but would freak out if we had to pay the real cost of food at the supermarket. The average dairy cow in Europe gets over £600 a year in subsidy - no wonder milk is cheaper than bottled water! (And there’s still surplus cheap milk to dump to Russia, Saudi Arabia and Nigeria)

Will the CAP be reformed? What happened last time, ten years ago? While negotiators from the UK attempted to inject some sanity into the discussions the heads of state of Germany and France excused themselves and stepped out of the room for half an hour. They returned and announced that there would be no reform of the CAP until 2013. And that was that. Since then they’ve instituted a 10% Renewable Transport Fuels Obligation that keeps the countryside full of rapeseed and pays for deforestation of the last habitats of orangutans to grow palm oil to burn in buses.

These people couldn’t reform a piece of plasticine.

Subsidised Theft

In 2005, the US government paid $180 billion in direct and indirect subsidies to American farmers.

MY GREAT-GREAT-grandfather Lars Dugstad emigrated to America from Norway in 1842. He lived in a dug-out cave for fifteen years while he cleared eighty acres of virgin Koshkonong Prairie land in Wisconsin. His was the typical pioneer experience.

His son Ole, my great-grandfather, went to Nebraska in 1887 and broke the prairie sod on 160 acres of land in Dakota County. Ole’s son Lewis, my grandfather, farmed it until I was born there in 1944. Lewis’ only son, my Uncle Floyd, sold it and went on to become one of the first beef feedlot operators on the farm he bought across the Missouri River in Iowa.

Floyd offered me 625 acres in 1966, but I didn’t like the idea of sticking diethylstilbestrol hormones behind the ears of cattle, and I made the fateful decision to come to London instead and open a macrobiotic restaurant. That led on to a career in the retail, manufacturing and marketing of organic foods that included Whole Earth Foods and Green & Black’s chocolate, and also my work with the Soil Association.

Uncle Floyd’s son now farms those 625 acres as part of an expanded total of 1,600 acres – all farmed with just one assistant. Last year he lost $40,000 on sales of $300,000 but ended up with a net farm income of $110,000, thanks to a hefty $150,000 subsidy from the US government.

So from Thomas Jefferson’s dream of a rural democracy, where every self- sufficient and prosperous family had a small farm or business, we have reached – in three generations – a corporate state where a viable family farmer needs 1,600 acres, a lot of machinery and GM crops and still operates at a huge annual loss that has to be made up by subsidies.

In 1944 Charles Erwin Wilson, President of General Motors and Director of the War Production Board, called for a Permanent War Economy to prevent a post-war return to the Great Depression. The Permanent War Economy, in giving birth to the military-industrial complex, also gave birth to the military-agricultural complex. Both operated on the same principle – if the free market wouldn’t take everything that was produced, the government would take up the slack, keeping the economy humming. The same companies that made tanks for the war could make tractors and pick-up trucks; the same companies that made nitroglycerine explosives could make nitrogen fertilisers.

The problem was that farmers weren’t up for it. Either a command economy or false economic signals were needed to force them to industrialise and adopt chemical inputs.

In the UK, the Soil Association was lobbying hard for a sustainable post-war agriculture based around rural communities and the avoidance of chemical fertilisers. ICI lobbied hard for increased nitrate use and eventually, with the Agriculture Act of 1947, ICI won the argument and the British government fell in line with the policy of its European and US counterparts by introducing a direct cash subsidy of ten shillings on every bag of nitrate fertiliser.

This subsidy made all the difference to farm economics: once nitrates were in use weeds thrived on the extra nutrients and created a market for herbicides, fungal infections proliferated on the densely packed plants and created a market for fungicides, and the elimination of fertility-building rotations created a market for insecticides to deal with the inevitable build-up of pest populations. CO2 emissions from the soil escalated, as soil structure and carbon-rich humus collapsed under the onslaught of chemical fertilisers.

Subsidies set land prices and farm incomes from then on. Agriculture had, in effect, been nationalised and was part of the Permanent War Economy that has been the economic model of the West and of Russia ever since. From the start, US farmers saw what was coming and formed leagues in which they all faithfully promised each other never to accept subsidies. But once some farmers took the subsidy, they could sell their crops more cheaply; the rest had to follow suit if they were to be competitive. The inherent bias of government policy towards larger producers led to the steady extinction of small farms.

The same thing happened in industry. The US Government pays out $167 billion a year to support the US’s largest corporations. In 1950, 25% of US tax income came from corporations. That figure is now 10%.

In 2005 the US government paid out more than $30 billion in direct payments to US farmers and an estimated further $150 billion in indirect subsidies including tax breaks on fuel and equipment, tariffs, protective pricing, drought loss payments and purchasing surpluses.

The biggest recipients of this support are the largest corporate farmers and commodity giants like Cargill and ADM (Archer Daniels Midland), agrichemical and seed suppliers like Monsanto and Dupont, and huge corporations such as the Fanjul family’s Florida Crystals sugar empire and meat producers Tyson and Smithfield.

The real damage from this subsidy policy is not just the financial cost to the US economy, though the numbers are significant. The real cost is to the health of the global economy, to the stability of our climate and to human health.

THE COST TO THE health of the American people has been spelt out by such authorities as the Harvard School of Public Health. The fast-food industry has contributed directly to the epidemic of obesity, diabetes, heart disease and osteoporosis. These degenerative diseases threaten the future capacity of Western economies to finance health care. If subsidies on corn and soybeans alone were removed, the cost of a cheap hamburger would be forced up from $1 to $3. This would directly affect rates of junk food consumption. If the subsidised rangeland that supports the production of cheap calves were charged at a market price and if the externalised costs of the beef industry such as unsustainable levels of water pollution, environmental degradation and greenhouse-gas production were taken into account, the same hamburger would cost closer to $5 or $6. At this level hamburger consumption would be reduced to the healthier levels that public health authorities urgently recommend. The cost of obesity to the US is estimated at $117 billion just in lost work days and in additional health-care costs, a high price to pay for unfeasibly cheap burgers.

But the real harm of the subsidy system is to the global economy. So, the question is: How do US subsidies cause world poverty?

US farmers grow maize at a cost of 6¢ per pound. A Mexican farmer can grow maize at a cost of 4¢ per pound. So you would think that Mexico would export corn to the US – and at the very least would dominate the US domestic market. But the world market price is set at 3¢ per pound on the Chicago Board of Trade on the basis of subsidised US farmers. If the Mexican farmers seek to make a profit over their cost of 4¢ per pound, grain traders around the world will import or, more importantly, threaten to import US corn in order to continue to purchase at a price of 3¢ per pound. In the cruel world of subsidised agriculture, the so-called inefficient Mexican farmers go out of business trying to compete with truly inefficient US farmers whose cost of production is really 6¢ per pound, but who have the mighty US taxpayer prepared to subsidise their farm-gate price down to 3¢ per pound. In recent years 100,000 Mexican farmers have been driven off the land, denied access to their domestic market by US imports. Real trade justice would be to either abolish the subsidies or allow farmers all around the world to get the same subsidies from Uncle Sam.

Subsidies in the US determine the commodity prices quoted on the Chicago Board of Trade, which are the benchmark for commodity prices worldwide. It is not the actual exports as much as the fact that a phoney price is the global standard that causes the damage.

Majority world farmers, if they were allowed to benefit from their greater efficiency, would prosper from both increased income and land values, their countries would prosper, and problems of disease, overpopulation and poverty would be greatly alleviated by the increased domestic and foreign income. We also know that, as family income increases, family size decreases: it’s the paradox of wealth but another good reason to liberate food prices in order to non-coercively stabilise global population growth.

So can we quantify the actual cost of subsidies to the world economy?

A simple calculation can be made on the basis of the US and EU current subsidy levels. James Wolfensohn, President of the World Bank, sets the total annual subsidy spend at $350 billion – nearly $1 billion a day. Subsidies now represent 50% of net farm income in the US and the EU.

This means that, if subsidies were not in place, US farmers would need to double their prices to make a living.

On the basis that the US and the EU represent one-sixth of the world’s food production, we can assume that, if commodity prices doubled worldwide, the increased income for the majority world would be $2.4 trillion per annum. Total foreign aid amounts to $50 billion, or just 2%, which is paid back to the victims of what amounts to global theft from farmers outside the industrial countries that benefit from the rigging of market prices.

However, because the producers of the majority world operate on lower cost bases, are more efficient and have a higher real productivity level, the price of agricultural commodities would probably not double, as market forces would come into play at this stage. US and EU production of cereals and oilseeds would fall dramatically if faced with global competition and a level playing field.

THERE IS ANOTHER factor. The price of oil is going up. It was $12 a barrel in 1998, George Bush came to power in 2000, and it has now touched $70 a barrel and shows little sign of falling. The increase in the price of natural gas has already led to the closure of half of North America’s fertiliser manufacturing capacity in the past four years.

Demand for our diminishing reserves of natural gas for domestic heating and cooking or as motor fuel will ensure that natural gas, which generates tax income, will always be, as a priority, used in those applications where it can bear the extra cost of being taxed. This does not include fertiliser manufacture, where it is already too expensive. People are prepared to pay a 300% tax on petrol and diesel for their cars, because consumers put a high value on personal transportation. When similar taxes are imposed on bunker oil, aviation fuel, heating oil, natural gas and power generation, people’s subsequent choices will reflect the real cost of fossil fuels.

Growing food needs energy. To produce a calorie of food using fossil-fuel-dependent industrial farming takes fifteen calories of energy input. To produce a calorie of food organically still uses five calories of energy input. A gardener with a hoe uses one calorie to produce twenty calories of food. Organic farmers are closest to optimising energy use with productivity, and since their only fossil-fuel use is in running tractors and equipment, they will have the economic advantage as energy prices increase. When the oil price reaches $100 per barrel farmers will no longer be able to justify the use of inputs such as fertilisers and pesticides. On a global scale, the farmer who is ‘carbon-frugal’ is due for big rewards.

Carbon isn’t the only greenhouse gas we get from agriculture. Intensive cattle-rearing also leads to increased methane emissions. Feeding a cow on corn and soybeans leads to an acid rumen, incomplete digestion, and methane emissions several times more than from a cow fed on grass and hay. When you consider that the combined weight of cattle on this planet exceeds that of human beings, that’s a lot of gas. The widespread use of nitrogen fertilisers is the main source of atmospheric nitrous oxide, a gas that is nearly 300 times more warming in its effects than CO2.

As the price of oil-based inputs rises, farming on a small scale will become more attractive. Hobby farming, where farmers have other sources of income but use their farmland to augment that income, will expand. We will see more diversity in the countryside, and more vibrant local economies.

This article is based on the Martin

Radcliffe Lecture 2006.