Food
Systems
L.I.F.E.
Food &
Economics
Organic
Transitions
Goff Organic
Garden
Trace
Elements
Sea
Minerals
Molybdenum
& Carbon
RFFP
Sustainable
Table
Education
Step It Up
2007
Onondaga
Lake
Peace
Festival
Food, Farming & Prosperity
Dollars and Sense in Our Food System

by David Yarrow, 1989

Today, more and more people appreciate the healing powers of simple foods to provide energy and restore health to the human body. Everyday we eat, and by intelligent, careful selection of our daily food we control our blood quality, and thereby create our health. Everyday everyone must eat, and so food is a universal factor affecting all humanity. Our digestive tract absorbs the life of plants and animals, and through our hara we are rooted in the biological life of Earth.

workshops for farmers & our future
Soil Fertility, Biofuels,
& Carbon Sequestration
local agriculture & global climate
renewing our regional farm economies

However, few people also comprehend their food system: a vast, intricate economic and social organization which delivers our sustenance each day. It is the external expression of the appetite of our civilization. Just as our individual health depends on the quality of our food digestion, society's economic vitality depends on a healthy, sound food system.

The food system is the largest sector of our American economy. It dwarfs all other arenas of business. Calculate the dollars spent each day by Americans to eat, and you begin to quantify the appetite of America. Even a modest $10/person/day times 240 million citizens and 365 days/year staggers the imagination. In dollars, more money is spent each day on food than any other business. In land area, food production requires more land than any other enterprise. In steel, agriculture alone uses more steel than any industry. In energy, agriculture, food processing and marketing bum more. FOOD: not just big business.......

THE BIGGEST BUSINESS

The second largest sector of our economy is "health care" industry, which includes medicine and pharmaceutics. To a macrobiotic understanding, this is an inevitable, predictable irony. The relation between food and health is not just financial or metabolic coincidence. Politically in Washington we see the Food & Drug Administration, while supermarkets and drug stores occupy the greatest square footage in shopping centers. Thanks to Wegmans, we now have Food & Drug stores. But more deeply, the health of our entire economy springs from the vitality of our food system. As the food economy prospers, so does the general economy. As the food system suffers failure, bankruptcy and piracy, the general economy will shortly decline.

Like driving a car, steering an economy can be perilous. A safe journey depends on factors like speed, weather, road condition, behavior of other traffic, and on the attention of the driver. Nonetheless, anyone with common sense can arrive at their destination under normal circumstances. The word "economics" comes from Greek "oikos", meaning "household", so originally it meant the art of managing a household. The wife and mother was the first economist, and every household has its own economy, as does every nation. Every husband and wife are a financial team in the tradition of President and Congress. But understanding economics is not as imposing as the federal deficit. With a little common sense we can quickly grasp the basic principles.

THE ORIGIN OF WEALTH

A look at economics reveals one cardinal principle:

All wealth comes from the Earth

This was a maxim of wisdom long before French economist Richard Cantillon captured it in print. Activities which actually create fundamental units of wealth in the economy are businesses which transform natural resources into raw materials. The extraction of resources from the natural environment generates initial wealth to feed the rest of industry. Businesses that perform this function are: farming, forestry, fishing and mining. Raw materials harvested by primary industries enter into mainstreams of productivity to be further processed, refined and transformed into finished products by other industries in the economy. The secondary industries do not create value, they merely add value. Restrict raw material flow from primary industry, and the entire economy quickly is disturbed.

Of the primary industries, farming accounts for fully 70% of the total value of wealth generated in the economy. For all the gold, silver & copper mined, the value of farm products is greater. Better still, food is entirely and rapidly consumable. Agriculture is the gut of society, continually creating new wealth to generate steady pulses of cash flow to drive economy's engines. Beyond agriculture lie intricate pipelines of food distribution and processing, an arterial network delivering food from farm to kitchen. Along the way, secondary industries transform raw commodities produced by primary industry, increasing their value. But the farmer gives us the initial value.

"From the dawn of civilization, invention upon invention has tapped the capital store of energy not dependent on the revenue of sunshine. The economics of life is the way Nature winds up man. Possibly future races of men may feed their internal fires in the same way we perform external labor, with inanimate energy. But until new discoveries are made, agriculture remains the key industry of life. Fundamentally, it is the collection of sunlight by chlorophyll to unify water and carbon dioxide into chemical carbohydrate energy of food."

—Frederick Soddy, Wealth, Virtual Wealth and Debt

MULTIPLYING INCOME

If sheer size of wealth isn't impressive enough to place agriculture at the base of our economy, farm income multiplies itself several times over by exchange throughout the economy. A dollar spent for food creates added sales in the economy, and with each added sale the original value of farm goods is multiplied. This Income Multiplier Effect provides further proof of farming's role as the primary industry in the economy.

Economics measures how money is exchanged in the economy. A consumer spends a dollar at a foodstore; the store spends money for inventory, payroll, supplies, services, interest, etc.; employees spend their paychecks buying more goods and services... the chain goes on. A dollar spent by a consumer rebounds as additional sales, and its value is kept within the economy. Value kept is wealth retained. As Abe Lincoln put it, 'When we trade with ourselves we have both the goods and the money." This is Income Multiplication. The more times a dollar multiplies in the economy, the more wealth circulates within it. Economics measures Income Multipliers for various businesses. The higher the Income Multiplier, the greater the effect in the economy.

Agriculture provides one of the highest Income Multipliers. Each dollar spent for food turns over in the economy several times, and generates a large increment in total wealth. Farmers create the initial wealth, which passes through the rest of the economy, multiplying total income. When farm income declines, the amount of wealth available to the rest of the economy also declines. Thus, we see farming creates the fundamental units of wealth, and therefore plays a primary role as the foundation of our economy. Healthy agriculture is essential for a healthy economy. To deprive agriculture of reasonable income is to decrease the primary source of new wealth and total income in society.,

The plight of the farmer becomes the plight of us all. The food that shapes the microcosm of our internal biology mirrors the forces that sustain the macrocosm of our economy. If agriculture is healthy and profitable, the entire economy can enjoy continued wealth and abundance. If farming falters into financial loss and debt, the economy suffers the loss of its annual source of new wealth to keep business solvent. Persistent agricultural decline slowly bleeds wealth and life out of the entire economy, resulting in economic distress.

ONE-TO-SEVEN RATIO

In the 1930's three men introduced a precise equation for the relationship between farm income, factory wages and national income. For a decade Charles B. Ray, engineer and business consultant, Carl H. Wilken, President of Progressive Farmers of Iowa, and Dr. John Lee Coulter, former member of the US Tariff Commission, testified at more Congressional hearings than all other non-government witnesses combined. They provided proof that each $1 of farm receipts creates $1 of factory payroll and $7 of national income, nearly a perfect ratio of 1:1:7. This formula is the most important discovery since the Declaration of Independence or the US Constitution. It is the key to economic prosperity, and therefore democracy. Georges Ohsawa, the founder of macrobiotics, must be smiling in his grave:.1 yang to 7 yin... the universal spiral.

In 1944, in The Key to Prosperity Wilken wrote: "raw material income, most potently that of agriculture, is the prime mover in our national economy. Findings demonstrate, for the first time, a natural law—The Law of Exchange—which controls the turnover of raw material income as it passes through various economic uses. This is the key to the whole economy. For national income is simply raw material income times the rate of turnover. The nation's wages, manufacturing output and public purchasing power are fixed by this turn of raw material dollars, and are limited by farm income. They follow its course, for better or worse, at a 3 to 6 months interval." Wilken argued America could have any prosperity it wanted, as long as it maintained a healthy farm economy.

Testimony by Ray, Wilken and Coulter resulted in the Steagull Amendment of 1942 to establish a floor under basic farm crops at 90-92.5% of parity. For 6 years, until 1949, farm prices were maintained at parity. During those years, the nation enjoyed prosperity and national income grew. But in 1948 the Aiken Farm Bill reduced prices to 60-90% of parity. Almost immediately farm prices began to slide, and by 1950 farm income had dropped 14%. The national economy began to slip inevitably from postwar vitality into deepening debt and chronic inflation. America hasn't had a balanced farm economy since.

PARITY: INCOME = EXPENSES

With these Principles in mind, we can appreciate the need to keep family farming strong and profitable. Profitable can be simply understood: expenses necessary to produce a commodity must match income created by its sale. Parity is the economic balance point where income equals expenses. A healthy business must have a positive balance, that is, parity of at least 100%. If expenses rise above income, or income falls below expenses, then farms operate at a loss, lose capital, fall into debt, and approach bankruptcy.

Carl H. Wilken, who discovered the 1:1:7 ratio, promoted Agricultural Parity as a requirement for sound economic well-being. Wilken argued that every $1 lost by farmers was also a loss of $1 in factory wages, and $7 in national income. He insisted private speculation combined with government regulation meet the demands of a global marketplace will leave our biological engine a smoking ruin, if not the whole planet a twisted wreck. We cannot pursue farmers with debt and bankruptcy, and naively believe they will bestow proper husbandry on their soil. This is dualism and schizophrenia. Yet farming today is a sacrificial lamb on an altar of free-for-all market competition. Continued collapse of rural economies through farm foreclosure will transform our countryside into a Third World at our back door. Farmers can only farm well if they can farm profitably, which means to exchange their food for at least their cost of production. This is Parity.

MARKETPLACE OR BATTLEFIELD?

Similarly, a marketplace ruled by The Law of Supply and Demand reveals again our dualistic mentality. A marketplace ruled by competition whose reward is a fat wallet is imbecile, cruel and contrary to genuine care and gentle use. To macrobiotics, farmers, consumers and food industry are not competing interests, but a community of families and friends. This community must also embrace the natural world of its environment of plants, animals, rivers, wind, and earth. As family and friends, they cooperate to help each other and that each one's essential needs are assured.

What's needed is massive injections of consciousness in the marketplace. Only as consumers in foodstores choose to eat wisely, simply, frugally, and naturally can civilization's raging, feverish appetite be calmed. By buying our grains and vegetables locally from farmers who care for their soil we invest in a future for generations to come.

ETERNAL WEALTH & ULTIMATE VALUE

"Gold is one of the most beautiful of the 92 elements, and one of the heaviest known to science. It is the only metal that is yellow in its natural state. It does not tarnish when exposed to air, and does not rust when buried in the ground. It always retains its particular beauty, color and luster. It is the most ductile and malleable of the metals. A troy ounce can be drawn into fine wire 50 miles long, or be beaten into 100 square feet of film 1000 times thinner than paper. Gold is virtually insoluble and immune to nature's reagents. It is inert to most acids and bases. It refuses to disintegrate, rust or tarnish, so it is regarded as something that can be counted on to look the same and feel the same 5 centuries ahead."

—Wilfred Krug

But gold is metal of choice to measure real wealth not merely for its physical properties. Gold's physical character is but a signpost pointing the way more dim and distant metaphysical virtue. We begin to see its spiritual qualities when we reflect on its unequaled excellence to transmit electricity. In the marketplace, gold is tangible medium to transmit monetary energy, the "currency" of the economy. In technology, conductivity of precious metals opens electronic windows of communication into recesses of our minds. In Heaven, gold announces Supreme Power.

The gold and diamond engagement ring awakens in our technologized imagination a vision of crystalline semiconductor transmitting the spirit of two humans prepared to share co-creative union of their regenerative lifeforces. Sure, we can send endless Challengers into space, but the rest of us who remain on Earth must recover the thoughtful love required to continue sitting in the lap of our Mother. As gold weds man and woman, so gold is symbol and token of our marriage to the family of Creation on Earth. Anyone who wonders at all what I am talking about should read two poems by Wendell Berry: The Country of Marriage and Mad Farmer's Manifesto.

BE LIKE THE GRASSES

Many thousand years ago, on marginal land recently scoured by continental glaciers, the plant kingdom witnessed emergence of a newcomer. These new plants adapted to survive harsh, frigid winters and summer droughts. Their small, hard seeds sprouted profuse roots to clutch loose soil, and shot up a rosette of single bladed linear leaves. Rather than stand tall to stiffly fight fierce arctic winds, these evolutionary offshoots grow quickly, hug the earth, bend with winds, and multiply profusely. In thick growing families, they quickly blanketed newly exposed plains, covering the Earth's nakedness and pioneering for communities of animals, insect, shrubs, and trees to follow. Success adapting to planetary glaciation led them to proliferate into myriad varieties inhabiting every climate and soil. Today they are the most numerous, widespread, the most abundant. They are grasses; their seeds are cereal grains: rice, wheat, com, barley, oats, rye, and millet

No amount of tinkering with production technologies, marketing strategies or natural food philosophies can solve our problem. Only by changing the human values that motivate the behavior of our food system can we avert confrontation with fate grimly hinted at by cancer statistics, epidemics of immune diseases, contaminated groundwater, rampant inflation, and poverty. For as surely as yin follows yang, a food system driven by the wheel of competition will grind our our health, our farms, our environment to ruin.

The alternative is simple: support local agriculture; make your farmers your friends; eat light; chew well; be like the grasses.

We have on our side one great force,
the power of Creation,
with good care, with kindly use,
to heal Herself.

—Wendell Berry
The Unsettling of America:
Culture and Agriculture



Home | Membership | Earth Charter | Climate Change | Champion Trees | Ancient Forests | Topsoil | Food Systems | Water | Healing | Peace | Links

The Earth Renewal and Restoration Alliancewww.championtrees.orgupdated 6/28/2006