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Ecologies of scale : socio-economic obstacles to sustainable agriculture in the Lower Fraser Valley,… Fraser, Evan David Gaviller 2002

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Ecologies of Scale: Socio-economic obstacles to sustainable agriculture in the Lower Fraser Valley, Brit ish Columbia, Canada by EVAN DAVID GAVILLER FRASER B.A. , The University of Toronto, 1996 M . S c , The University of Toronto, 1997 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF T H E REQUIREMENTS FOR THE D E G R E E OF DOCTOR OF PHILOSOPHY in T H E FACULTY OF GRADUATE STUDIES (Resource Management and Environmental Studies) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA January, 2002 ©Evan David Gaviller Fraser, 2002 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of Resource Management and Environmental Studies The University of British Columbia Vancouver, Canada Date February 1 0 , 2 0 0 2 The Ecologies of Scale Evan D. G. Fraser 11 ABSTRACT This research asks: "what forces shape agriculture s u c h that environmental problems persist on farms?" The hypothesis is that socio-economic forces, combined wi th geography and technology, have created a "food system" that precludes good farm management. Secondary hypotheses are: (1) either government policies or global trade lead to environmental ly damaging management practices. (2) insecure l and tenure influences whether a farmer wi l l invest i n long-term management. These hypotheses are tested u s i n g da ta from the Lower Fraser Valley, a fertile region adjacent to Vancouver , Canada . Resul ts show that rented fields have more a n n u a l crops a n d less grasslands, legumes, and grain than owned land . This has negative environmental impl icat ions . To test the role of internat ional trade, da ta on farm practices were compared over time for traded versus government-protected commodit ies . Resul ts show that environmental management on vegetable farms has improved as trade i n these commodit ies has r isen. These improvements are bought at the expense of the environment i n the regions that B . C . trades wi th . Da i ry a n d poul t ry farms, w h i c h are protected by the government, have grown more concentrated and cause serious environmenta l problems. However, these same changes have occurred i n other regions of Nor th A m e r i c a where farmers do not have the same type of protection. There are three overarching conclusions . (1) It is difficult to investigate large-scale abstract forces l ike the role of government programmes or global trade i n isolat ion. These forces interact i n surpr i s ing ways that can lead to bad management. (2) It is necessary to unders tand local envi ronmenta l condi t ions and not to generalize the possible ecological consequences of forces like global trade based on aggregate data. (3) This research suggests that r i sk plays a significant role i n determining good farm management. If farmers do not have secure l and tenure, they wi l l be at r i sk of los ing their l and a n d w i l l not receive the benefits of good farm management. However, i f the government protects farmers, farmers wi l l be able to increase profits by external izing environmental costs. Farmers m u s t be able to farm i n a sufficiently stable economic environment that they can p lan into the future, but shou ld not be so protected that they can damage the environment. The Ecologies of Scale E v a n D . G . Fraser I l l T A B L E OF CONTENTS Abstract ii Table of Contents iii List of Tables v List of Figures vi Acknowledgements vii Introduction: studying the effects of the economy on sustainable agriculture. 1 Research Question: Technical Solutions or systemic problems? 2 Hypothesis and locale for study 3 Thesis Objectives, Goals and structure 10 Part I - Framework 14 Chapter 2 Conceptual Framework: Economic incentives for poor environmental management 15 Introduction • 15 The Market 15 Market Failure 17 Three General Conditions of Market Failure, with examples from The Lower Fraser Valley 19 Conclusion 23 Chapter 3 Conceptual Framework Part II: the ecosystem approach to agriculture 24 Introduction 24 Sustainable Agriculture 25 Ecological Concept # 1: Biodiversity 28 Ecological Concept #2: Nutrient Cycling 39 Conclusion 42 Conclusion to Part I: Theoretical Framework 44 Part II - Possible Explanations 46 Chapter 4 Possible explanations 47 Introduction '. 47 Theory # 1 Are Neglect and Ignorance Responsible? 48 Theory #2: Land Tenure 54 Theory #3: the impact of global trade 57 Theory #5: The Nature of Farm Products 70 Conclusion to Part II: Possible Explanations 73 The Ecologies of Scale Evan D. G. Fraser iv Part III - Analysis ?4 Chapter 5 The Role of Land Tenure: Data from British Columbia 75 Introduction 75 Discussion 81 Conclusion to Land Tenure 82 Chapter 6 The Role of Trade: Data from British Columbia 83 Introduction 83 Data from the Lower Fraser Valley 90 California: the centre for North America's horticultural industry 110 Summary and conclusion to the effect of trade 118 Chapter 7 The role of Government Programmes: Data from the Fraser River Valley 120 Introduction 120 Data from the Lower Fraser Valley 121 Discussion 127 Summary and Conclusion 133 Conclusion to Part III: Analysis 135 Part IV - Conclusions 1 3 7 Conclusion 138 Summary of research 138 Overarching Conclusions 141 Final Remarks 143 Appendixes 145 Appendix I: The Varieties of Agricultural Experiences 145 Appendix II: Methodology use to analyze transcripts 150 Appendix III: 1991 Census Data 154 1996 Census Data 155 Appendix V: Statistics Tables 156 Appendix VI: Works Cited 158 The Ecologies of Scale Evan D. G. Fraser LIST OF T A B L E S T A B L E 3-1 A HYPOTHETICAL SITUATION W H E R E THE CROPS IN T H E FIELD A R E HIGHLY SPECIALIZED 34 T A B L E 3-2 A HYPOTHETICAL SITUATION W H E R E THE CROPS IN T H E FIELD A R E DIVERSE 34 T A B L E 3-3 HECTARES OF GRAIN IN DELTA, B .C. B E T W E E N 1996 - 1999. .38 T A B L E 4-1 N U M B E R OF FARMS IN T H E LOWER FRASER V A L L E Y REPORTING USING DIFFERENT SOIL CONSERVATION PRACTICES IN 1991 AND 1996 52 T A B L E 5-1 PERCENTAGE OF FIELDS WITH DIFFERENT L E A S E LENGTHS THAT HAD B E E N PLANTED TO GRASSLANDS B E T W E E N 1996-1999.... 80 T A B L E 6-1 ESTIMATE OF TOTAL GOVERNMENT SUPPORT IN 1998 U.S. DOLLARS FOR FARMERS IN THE U.S. , CANADA, AND E U R O P E B E T W E E N 1996 AND 1998 86 T A B L E 6-2 ACRES OF TOP T H R E E CROP HORTICULTURAL CROPS IN BRITISH COLUMBIA 1992 - 1997 96 T A B L E 6-3 NITROGEN (N) SURPLUS / DEFICIT F R O M ALL FARMS IN CENSUS AREAS IN THE WEST END OF THE LOWER FRASER VALLEY FOR 1991 AND 1996 98 T A B L E 6-4 PHOSPHORUS (P) SURPLUS / DEFICIT FROM ALL FARMS IN CENSUS AREAS IN THE WEST END OF THE LOWER FRASER V A L L E Y IN 1991 AND 1996 .....99 T A B L E 6-5 SOIL CONSERVATION PRACTICES ON LARGE FARMS IN T H E LOWER FRASER VALLEY IN 1991 AND 1996 100 T A B L E 6-6 V A L U E (IN MILLIONS OF CURRENT CANADIAN DOLLARS) OF B.C. 'S V E G E T A B L E IMPORTS FROM CALIFORNIA B E T W E E N 1991 AND 2001 109 T A B L E 7-1 K G OF SURPLUS NUTRIENTS IN THE LOWER FRASER VALLEY. 126 T A B L E 7-2 COW DENSITY ON B.C . FARMS B E T W E E N 1941 AND 1964 130 T A B L E 7-3 CHANGES IN THE SIZE AND PRODUCTION OF T H E U.S. AND WISCONSIN DAIRY INDUSTRY, 1993-1998 131 The Ecologies of Scale Evan D. G. Fraser vi LIST OF F IGURES F I G U R E 1-1 M A P O F T H E L O W E R F R A S E R V A L L E Y 5 F I G U R E 3-1 J O I N I N G T H E E C O S Y S T E M A P P R O A C H A N D E N V I R O N M E N T A L E C O N O M I C S L I T E R A T U R E 45 F I G U R E 5-1 SOIL O R G A N I C M A T T E R O N F I V E F I E L D S F R O M T H E E X P R O P R I A T E D L A N D IN D E L T A , B . C . B E T W E E N 1971 A N D 1990 77 F I G U R E 5-2 P E R C E N T A G E O F F I E L D S WITH D I F F E R E N T L A N D T E N U R E T H A T H A D P O T A T O E S , O T H E R A N N U A L S , G R A I N , O R P E R E N N I A L S B E T W E E N 1996 A N D 1999 IN D E L T A B . C 78 F I G U R E 5-3 P E R C E N T A G E O F F I E L D S O W N E D B Y T H E G O V E R N M E N T A N D R E N T E D TO F A R M E R S W H E R E L E G U M E S W E R E P L A N T E D B E T W E E N 1996 A N D 1999 IN D E L T A , B . C . D I V I D E D B Y T H E L E N G T H O F L E A S E F O R T H A T F I E L D 79 F I G U R E 6-1 E S T I M A T E O F C A N A D I A N G O V E R N M E N T F A R M S U P P O R T IN M I L L I O N S O F (1998) D O L L A R S B E T W E E N 1986 A N D 1998 85 F I G U R E 6-2 G O V E R N M E N T F A R M SUPPORT P A Y M E N T S IN T H O U S A N D S O F 1998 D O L L A R S , A S R E F L E C T E D IN F A R M C A S H R E C E I P T S IN B R I T I S H C O L U M B I A , 1985-1998 87 F I G U R E 6-3 R E L A T I V E SPECIALIZATION S C O R E F O R A L L H O R T I C U L T U R A L C R O P S IN BRITISH C O L U M B I A B E T W E E N 1989 A N D 1999. F<0.01 (YEARS WITH A H I G H E R S C O R E H A V E A G R E A T E R D E G R E E O F O N -F A R M SPECIALIZATION, I.E. L E S S BIODIVERSITY) 94 F I G U R E 6-4: P E R C E N T O F T O T A L A R E A O F BRITISH C O L U M B I A ' S H O R T I C U L T U R A L C R O P L A N D O C C U P I E D B Y L A R G E S T F O U R C R O P S B E T W E E N 1992 A N D 1997. F<0.05 95 F I G U R E 6-5 R E L A T I V E SPECIALIZATION S C O R E F O R T H E MUNICIPALITY O F D E L T A . F = 0.33 (YEARS WITH A H I G H E R S C O R E H A V E A H I G H E R DIVERSITY O F CROPS) 97 F I G U R E 6-6 R E L A T I V E SPECIALIZATION S C O R E F O R P R O C E S S E D V E G E T A B L E C R O P S IN B . C . B E T W E E N 1990 A N D 1999. F<0.05 (YEARS WITH H I G H V A L U E INDICATE L E S S BIODIVERSITY A N D G R E A T E R SPECIALIZATION) 105 F I G U R E 6-7 S A L E S F R O M T O T A L F I E L D C R O P S , P R O C E S S E D F I E L D C R O P , A N D F R E S H F I E L D C R O P S F R O M B . C . ' S L O W E R M A I N L A N D 106 F I G U R E 6-8 P E R C E N T O F T H E T O T A L H A R V E S T E D A R E A F O R F R E S H O R P R O C E S S E D V E G E T A B L E S IN BRITISH C O L U M B I A 107 F I G U R E 6-9 A R E A (IN A C R E S ) O F T H E T H R E E L A R G E S T P R O C E S S E D V E G E T A B L E S 108 F I G U R E 7 - 1 DISTRIBUTION O F B . C . DAIRY, C A T T L E , P O U L T R Y A N D FRUIT F A R M S B Y R E V E N U E C L A S S . . . 125 The Ecologies of Scale Evan D . G . Fraser V l l ACKNOWLEDGEMENTS This work would have not been possible without the amazing support (both personal and financial) that I have received over the past four years. First, my deepest heartfelt thanks goes to my supervisor, Dr. M. P. Marchak, who guided me through this process, helping me turn a grand vision into an argument. Second, my committee made up of Rich Barichello, Art Bomke and Les Lavkulich were all wonderfully helpful throughout this project. I owe a special thanks to Art Bomke who, in the difficult first year of my thesis, hired me as a research assistant on a contract that introduced me to the Lower Fraser Valley. Dr. B. Vernon, from Agriculture and Agri-food Canada, provided much of the data used in this thesis. Klohn Leonoff Ltd., also provided data on land tenure. Finally, to friends, family, and loved ones who helped proofread, edit, and otherwise encourage me throughout this process: thank you very much. Thanks also to the Social Science and Humanities Research Council and the University of British Columbia. Without the financial assistance provided by these organizations it would have been much more difficult to complete this work. The Ecologies of Scale Evan D. G. Fraser 1 INTRODUCTION: STUDYING T H E E F F E C T S O F T H E ECONOMY ON SUSTAINABLE AGRICULTURE For the last ten thousand years, humans have been ploughing the soil and cultivating those species of plants and animals that help maintain our lives and our societies. During this period, we have used a vast array of techniques. For most of agricultural history, our methods of raising domesticated crops and animal husbandry have caused no serious problems. Shifting cultivation was a common practice for many cultures on all continents except Australia and Antarctica. The process of burning forests and cultivating the cleared area for a short time before moving to a different patch allowed for continuous agricultural production for millennia. Today, approximately 500 million people, in 90 tropical countries make their living in this way (Lamprecht, 1989 p. 96). Similarly, there are archaeological examples of extremely intensive agriculture that do not seem to have led to major environmental problems in many parts of the world (Altieri, 1990, p. 158). Global agriculture now supports over six billion people, three billion of whom live in cities. This unprecedented demand for food has forced our agricultural management systems to adapt to new challenges and maximize productivity in ways that were unexpected just 100 years ago. The impact of our species reverberates around the planet and many agricultural systems are seriously degraded (Government of Canada, 1992, p (9)1 - (9) 10; Jacobs, 1993; Kneen, 1999; Mannion, 1995, p. 13-14; Shiva, 1993). From a global perspective, farming can have a profound influence on the environment. It can directly contribute to soil erosion, water and air pollution, the loss of biodiversity, and deforestation. For example, with an estimated 35,000 species going extinct every year, the extinction rate today is comparable to the two great historic periods of mass extinction in the Paleozoic and Mesozic ages (Jacobs, 1993, p. 9-10; Rees, 1996, p. 2). Agriculture contributes to this loss in two ways. First, by cultivating only those varieties of plants and animals that are useful to human needs, farmers reduce the number of species that live on cultivated land (Mannion, 1995, p. 13-14). Second, as farms expand, they do so at the expense of forested land that is usually biologically more diverse.1 It is also important to realize that agriculture can have a positive influence on the environment. Although some authors are highly critical of industrial agriculture (Groh 8B McFadden, 1997; Kneen 8s McDougall, 1999), the techniques of modern farming helped overcome the problem of soil erosion in 1999 when the worst drought since the Great Depression hit the Eastern United States. Highly mechanized American farmers used specialized equipment and zero till techniques (where crops are planted without 1 While some forests are genetically very homogenous (for example even-aged pine or spruce forests or poplar stands in the boreal forest) generally forests are home to a greater diversity of species than farms. The Ecologies of Scale Evan D. G. Fraser 2 ploughing the soil) to reduce the impact of the drought and the problems of erosion that seriously damaged the environment and hurt rural communities earlier this century (Borger, 1999, p. 8). Similarly, there are many ways that farmers can control pest outbreaks without the use of potentially environmentally damaging chemicals (Altieri, 1990, p. 158-161; Altieri, 1999; Thrupp, 1997, p. 2). Traditional farmers in Latin America use animal grazing to turn non-useful weeds into animal proteins, and plant different crops in one field to stop the spread of diseases that damage harvests (Altieri, 1999). Nevertheless, a brief survey of the problems confronting modern agriculture is a sobering reminder that all is not well with our methods of food production: • The United Nations reports that 38 per cent of agricultural land worldwide has been damaged "...to some degree by agricultural practices since World War II" (Gliessman, 1998, p. 8). • Because soil movement is a natural process, the US Soil Conservation Society considers 11 tonnes per hectare an acceptable rate of erosion. In the US, however, there is an average loss of 18 tonnes/ha of topsoil each year (Soule 8B Piper, 1992, p. 15). • As a result of poor agricultural practices, the Soil Conservation Society estimates that 20 per cent of all US cropland is heavily eroded and that 90 years of agriculture in Washington State has resulted in a 50 per cent reduction of the natural productivity of the soil (Soule 8s Piper, 1992, p. 15). • Gliessman points out that due to bad agricultural management, agriculture is the world's largest source of water pollution (Gliessman, 1998, p. 8). Surveying these sorts of statistics, Pierce argues that agriculture threatens its own land base "...through various forms of land degradation, contamination of ground waters, decline of rural amenity values and the proliferation of undesirable chemicals..." (Pierce, 1993, p. 383-384). R E S E A R C H Q U E S T I O N : T E C H N I C A L S O L U T I O N S O R S Y S T E M I C P R O B L E M S ? Despite this grim perspective, there seem to be no physical or technical reasons why these problems should occur and we must question why farmers cause damage to their farms (Olson, 1992, p. 9-10). There are clear and simple solutions to almost all of the challenges posed by modern agriculture. For example, if farmers apply only the amount of nitrogen that plants can use, and time nitrogen application to coincide with plant growth, then there will be no nitrogen to pollute ground water from farmers' fields. This example highlights one of our society's larger ironies: we can add fish genes to enhance a tomato's ability to withstand frost yet (The Independent, 1999) we mismanage nitrogen fertilizer so that it pollutes drinking water. Furthermore, farmers have extensive knowledge of environmental conditions on their farms and know how to sustain the environment. Altieri shows that indigenous farming systems in Latin America are highly The Ecologies of Scale Evan D. G. Fraser 3 productive and environmentally sensitive, and Lamprecht points out how traditional farmers in many parts of the world have been able to farm within ecological parameters for generations (Altieri, 1990, p. 158-161; Altieri 1999; Lamprecht, 1989, p. 96-100). While the majority of the environmental problems that this thesis will discuss are found in the industrialized world, it is not as if farmers there have lost this understanding of ecology. Farmers in British Columbia, for instance, showed their understanding of the environmental impact of farming at public hearings on the state of farming in the province. During these hearings farmers indicated that they supported environmental stewardship and that they understood how to practice "sustainable farming." Their actions reflect this. In the Municipality of Delta, at the mouth of the Fraser River, farmers made full use of government sponsored programmes that enhance soil conservation. Despite this, evidence shows that environmental problems on these same farms have increased. In view of this paradox, the question that this thesis will tackle is: "what are the forces that shape modern agriculture such that environmental problems persist?" Since farmers seem to possess the technical knowledge to address environmental problems, there must be social, economic, and political reasons for environmental degradation. To answer this question, the first task is to develop a theoretical framework that links social and economic factors with environmental problems. Then I propose to show conclusively that farmers themselves are not the cause of the problem but that socio-economic forces have organized modern agriculture so that sustainable farming is impossible. H Y P O T H E S I S A N D L O C A L E F O R S T U D Y To address this question, the hypothesis of this thesis is that the socio-economic system as a whole, combined with geographical limitations and technological developments in the transportation and storage of food, has created a food production and distribution system that precludes environmentally sound farm management for farmers. The secondary-hypotheses are: (1) government policies and global trade have precipitated a "farm crisis" that constrains farmers, and forces them to use poor environmental management. This is because there are insufficient, incomplete or un-enforced regulations that do not provide sufficient incentives to deal with environmental problems; and (2) insecure land tenure reduces the value of the land and influences how much a farmer will invest in good environmental management. We will test these hypotheses on data from the Lower Fraser Valley (map 1), a fertile region adjacent to Vancouver, a rapidly growing city on Canada's West Coast. The Lower Fraser Valley is a relevant place to study these forces because these farms produce both globally traded commodities and commodities protected by the government and consumed locally. Hence, this is a good place to test the effect of trade and government on the environment. The Lower Fraser Valley also contains a number of different land tenure arrangements that allow us to test the role of land tenure. The Ecologies of Scale Evan D. G. Fraser 4 Finally, this is an environmentally sensitive area where it is possible to witness the impact of farm management on the environment. The Ecologies of Scale Evan D. G . Fraser 5 Figure 1-1. The Lower Fraser Valley The Ecologies of Scale E v a n D . G . Fraser 6 Reason to study this problem in the Lower Fraser Valley # 1: Trade, Government and "the Farm Crisis" Regularly used by the popular media, the "farm crisis" refers to the rapid changes that have occurred in the agricultural industry since World War II. The farm crisis has many causes, such as technological improvements that have made it possible for farmers to produce food very intensively. This has led to demographic and economic shifts in the farm economy. Global trade has facilitated this by making local farmers compete with produce from around the entire world. In Canada, both the number of farms and farm income are in decline. Between the 1930s and the 1980s, the number of farms dropped from approximately 800,000 to 100,000 (Canada, 1992, p. (9)5). A government publication entitled The Farm Income Crisis in Canada (Canada, 1998b, p. 1) shows that net farm income dropped by 53.4 per cent in 1997. The country's public broadcaster has devoted extensive coverage to this issue: ...last fall's drastic drop in hog prices, together with falling grain prices, together with competition from subsidized farmers in the United States and Europe, brought many Canadian farmers - not just prairie farmers - to their knees. This resulted in the $1.5 billion farm aid rescue package... (Canadian Broadcasting Corporation, 2000; electronic source, available athttp:/ / cbc.ca/news/indepth/onthefarm/ onthefarm_battlel. html )• Roberts of the Globe and Mail writes, "...today's farm woes are precipitated by a sharp cyclical downturn in commodity prices, rising input costs, and ... overproduction." (Roberts, 2001, on-line) South of the border, The New York Times reported that in October, 2000, the United States government approved the biggest bailout in the history of the apple industry to help compensate farmers for an estimated $760 million loss in the previous three years (New York Times, 2000, on-line). 2 Many of these concerns resonate in the Lower Fraser Valley. Farmers complain about a lack of income, a report on agriculture in the region indicates that productivity is in decline, and a government document shows 2 T h i s is not restricted to the industrial ized world. The Indian magazine, Frontline, recently devoted a n entire issue to the Indian farm crisis, a subject that received press in North A m e r i c a a n d Europe in 1999 when 500 Indian farmers committed suicide by dr inking agri-chemicals. They were protesting high input prices (Shiva, 1999, p. 20; V ida l , 1999 p. 16-17). In Frontline, Swaminathan , one of India's foremost agriculturalists , argues that: The government is today operating as a purchaser of [rice] paddy. This is what I call the trade relief method, like drought relief, flood relief, and so on. It has become a calamity approach to trade, which is most unfortunate. Owing to political pressure, the government rushes to some place and purchases sub-standard grain at a high price. This is a relief operation and not trade operation. (Swaminathan, 2001) The Ecologies of Scale Evan D. G . Fraser 7 that British Columbia's fruit and vegetable processing industry has all but vanished (Klohn Leonoff Ltd. , 1992 p. 95). Since there seems to be an agreement that there is indeed a crisis, the obvious questions are what are the causes of this crisis, and is it linked to the lack of agricultural sustainability? Typically, there are many explanations. Some argue that global trade is at fault. This school of thought combines a number of related issues that together paint a picture of large multi-national companies controlling our food supply. These companies force low prices on farmers and convert family farms into corporate branch plants that more closely resemble assembly line factories than the family farms of history. These farms are able to grow by ignoring environmental costs. Consequently, one theory suggests that the farm crisis has (i) been created by changes in the economy and technology, (ii) favours large corporations, and (iii) has created the conditions where food is produced very cheaply but with little regard for the environment (Kneen et al., 1999; Shiva, 1993). Others fault governments. These postulate that high subsidies in some countries put farmers in other countries at a disadvantage. For example, the rates of farm subsidy are m u c h higher in the European Union than they are in the U S , while Canadian farmers are amongst the least subsidized in the industrialized world (Canada, 1998b, p. 2-3) 3. This puts Canadian farmers at a disadvantage on the world market and forces them to adopt poor environmental management to cut costs. Other scholars argue that domestic subsidies allow farmers to specialize in a narrow number of crops. This not only helps to create environmentally fragile monocultures but also leaves farmers vulnerable if income products produced from all over the world. The dairy and poultry farms are m u c h larger, more intensive, and wealthier than the soil-based farms that specialize on fruit and vegetable subsidies are removed. Pierce (1993) argues that governmental programmes that support farm income take some of the risk out of farming (Pierce, 1993, p. 386). This gives farmers the opportunity to specialize on only those crops that have a financial return guaranteed by the government. In this way, taxpayers may support poor environmental management on farms. The Lower Fraser Valley is a good place to investigate these competing theories. First, there are a number of different types of farms in this area. In the eastern part of the Fraser River Valley, where the trans-Canada highway leaves the mountains, dairy farms and poultry farms are densely clustered. In B . C . , provincial marketing boards control the supply of these products and offer the farmers guaranteed prices by imposing tariffs on any products that enter the market from elsewhere. At the west end of the Fraser Valley horticultural farms dominate. These farms produce commodities like lettuce and potatoes, that must compete on the market with horticultural production. 3 Notable exception to this are the dairy and poultry industries that still enjoy a considerable degree of governmental protection. The Ecologies of Scale Evan D. G . Fraser 8 The dairy and poultry farms are also larger and less numerous today than they were in the past. Horticultural farms at the mouth of the river have grown smaller but more numerous (Statistics Canada, 1992). F a r m income reflects this split between farms that produce government-protected poultry and dairy and globally-traded horticulture. In 1995, approximately 50 per cent of all vegetable farms in the province had incomes over $50,000 per year. Approximately 50 per cent of poultry farms earned over $250,000 per year in British Columbia (Canada, 1995, p. 1-5). From this we conclude that the socio-economic forces that have contributed to the farm crisis have had very different results on the different types of farms in the Lower Fraser Valley. Consequently, since some farmers produce commodities that compete on international markets (fruit and vegetables), while others work under government programmes (dairy and poultry), it is possible to compare different types of farms to test the theories presented in the literature on the farm crisis in this region. Reason to study this problem in the Lower Fraser Valley #2: Land Tenure and the Agricultural Land Reserve The Lower Fraser Valley is also useful for our purposes because farmland falls under a number of different land-ownership agreements. Specifically, farmland in British Columbia is administered through two systems that mark this region as unique in the world. First, in the late 1960s, the government expropriated a large amount of prime farmland at the mouth of the Fraser River to make way for industrial development. Construction on this development never began, but the land - called the Roberts B a n k 4 back-up lands - was never returned to farmers and has been farmed on short-term leases ever since. Second, in an effort to preserve local farmland in the early 1970s, the province of British Columbia established the Agricultural Land Reserve (ALR), a region composed of all high quality farmland in the province. Owners are prohibited from building or developing A L R land without a permit, which are usually impossible to obtain for anything other than agriculture. As a result, tenant farmers work a large amount of farmland at the mouth of the Fraser River where development rights are restricted as most of the land is in the A L R . While at first glance these seem to be local issues, in fact the A L R and the back-up lands highlight the role of land tenure. Around the world insecure land tenure is cited as a primary cause of environmental agricultural land degradation. Given the diversity of land tenure arrangements, the Lower Fraser Valley provides an ideal place to test the influence of land tenure on the environment. 4 T h i s was officially re-named in the 1990s to the Robert's B a n k Provincial F a r m l a n d though it is still commonly referred to as the B a c k - u p Lands . The Ecologies of Scale Evan D. G . Fraser 9 Reason to study this problem in the Lower Fraser Valley 3: Environmental Sensitivity Two unique ecological features make this region especially relevant to study. First, the entire west coast of North America is on the migration path for the millions of birds that spend their winters in California and Mexico and their summers in the Arctic or Siberia. The Lower Fraser Valley is a vital environmental resource as it is one of the last undeveloped river deltas, and one of the largest areas where wetlands and tidal flats are still reasonably undisturbed on the West coast. The inter-tidal flats and marshes of the Lower Fraser Bas in support an average of half a million waterfowl, gulls, and shore birds. In addition, researchers have observed up to 1.4 million individual birds in this area during migration. Between October and Apri l , the Lower Fraser Bas in is home to tens of thousands of snow geese that feed on the shores and marshes and through the winter months, no other area in Canada is host to this density of bird life (Canada, 1992, p. (16)6). However, less than 1 per cent of the Fraser Basin is reserved for the use of wildlife (Canada, 1992, p. (16)6 ). Many wetlands have been drained for agriculture. For example, the Sumas Lake, upstream from the mouth of the Fraser River, was drained in the 1920s, and between 1967 and 1982 wetlands declined by 26 per cent (Canada, 1992, p. (16)6). With these changes to habitat, at least five bird and one mammal species have vanished since European settlement and the yellow-billed cuckoo, purple martin, western bluebird, horned lark, and burrowing owl no longer nest in the region (Canada, 1992, p. (16)6). The barn owl, sandhill crane, and yellow-headed black bird now only nest in small numbers and the numbers of greater white-fronted goose, brant and some races of C a n a d a goose have also declined. Despite these problems, more than 300 species of birds, 46 species of mammals, and 16 species of reptiles still use this area (Canada, 1992, p. (16)6). As a result, farm fields provide an ideal stopping ground for these migrating animals who find newly sprouted winter wheat crops excellent forage on their way south. This brings these birds into conflict with farmers as they do a huge amount of damage to fields in a very short period. This environmentally sensitive area must be managed very carefully to promote both farming and wildlife. As a result, farming has a major impact on the environment in this area, making this an excellent locale for this study. The second ecological characteristic of this region that is relevant to this study is the soil. Many of the dairy and poultry farms in the central part of the Fraser River Valley, are on well drained soils with a limited ability to absorb nutrients. Three common soil types in this region are Marble Hill , Columbia, and Abbotsford soils. Marble Hill and Abbotsford soils are medium-textured eolian deposits that have a silt-loam loess cap, approximately 45-60 c m deep, over gravel outwash. Columbia soils are coarse-textured glaciofluvial deposits. There is a large unconfined aquifer under m u c h of this area, which provides drinking water for a number of communities on both the U.S. and Canadian sides of the border. The Ecologies of Scale Evan D. G . Fraser 10 At the mouth of the Fraser River, where the horticultural farms are situated, the soils are medium to fine textured, made up of silt, clay, and loam deltaic deposits. These soils, which include Spetifore, Delta, and Crescent, are prone to salination, drain poorly, and compact easily due to the fine particles that make up these soil types. There is a direct interaction between the types of agriculture on these soils and the soils themselves. In the central and eastern part of Lower Fraser Valley, livestock manure accumulates on the surface and pollutes water sources. This is especially important in the Abbotsford area since the soil drains into an aquifer. East of the aquifer, soil morphology is different, and manure ends u p as surface runoff, polluting streams. Consequently, whatever the immediate soil conditions manure disposal is a logistical challenge throughout this area. Analysing livestock production trends in the Lower Fraser Valley, Schreier et. al. point out that although the agricultural land base has more or less remained constant over recent decades there has been an intensification of livestock production including the area directly over the Abbotsford Aquifer. At the same time, fertilizer expenditures have roughly doubled in the same area (Schreier, Bestbier, Derksen, & Brisbin, 2000, electronic source). These two factors have combined to result in serious problems of nutrient overloading and water pollution in a number of districts in this region. In the west, intensive horticulture takes place on poorly drained soils that are easily compacted. This has resulted in serious soil structural problems. As a result, many farmers have seen an increase in salinity and a loss of earthworms on their fields. This contributes to compaction and even greater drainage problems. It also leads to reduced crop yields and higher input costs. The loss of soil quality hurts economic competitiveness, and there is less money for soil remediation. Almost two-thirds of farmers from Delta, the town at the mouth of the Fraser River, reported that they had problems with soil compaction, 57 per cent had trouble with salinity, and 55 per cent had trouble with low p H . According to a 1992 report commissioned by the municipality to study the state of the local agricultural economy, levels of agricultural production in Delta are below potential and declining (Klohn Leonoff Ltd. , 1992, p. 95). The authors of the report concluded that "inadequate sub-surface drainage and declining soil organic matter levels," are largely responsible for these soil degradation problems (Klohn Leonoff Ltd. , 1992, p. 95). As a result of these environmental differences, we can observe an interaction between agricultural organization and the environment. The fact that different soil types correspond with livestock and horticulture make the Lower Fraser Valley an excellent place to observe the effect of social and economic factors on how farms impact the environment. T H E S I S O B J E C T I V E S , G O A L S A N D S T R U C T U R E The goal of this thesis is to link social and economic influences with environmental problems. To do so we will develop and test hypotheses about The Ecologies of Scale Evan D. G . Fraser 11 why environmental problems persist on farms in the Lower Fraser Valley of Brit ish Columbia, Canada. In order to achieve this goal the thesis has three major sections. Framework. The objective of part one is to develop a theoretical framework in which to assess the impact that social and economic factors play in contributing to environmental degradation on farms; Explanations. The objective of part two is to posit theories and explanations for the persistence of on-farm environmental problems; and Analysis. The objective of part three is to conduct an analysis of these theories using the Lower Fraser Valley as a test site. Part I. Framework Part one is the conceptual framework. In order to assess the role that social and economic factors like land tenure and the farm crisis play, it is necessary to develop a theoretical framework to examine these forces. This thesis draws on two different bodies of literature for this framework. First, chapter two reviews the environmental economics literature that helps us understand how economic forces fail to recognize environmental costs. This literature uses economic concepts like externalities, public goods, and discount rates to explore how economic decision-making can fail to take environmental degradation into account. Chapter three reviews the sustainable agriculture literature that helps us approach farming in terms of an ecosystem. This chapter uses the "ecosystem approach" to explore how agriculture has an effect on soil fertility and water pollution. The ecosystem approach shows how to identify and examine the environmental sustainability of farming. In this chapter, environmental problems caused by agriculture are established, technological solutions are discussed, and the nature of sustainable agriculture is explored. There is a special emphasis on (1) nutrient cycling, and (2) biodiversity. Nutrient cycling is the way that undisturbed ecosystems use the waste from one generation to provide the building blocks for the next generation. Biodiversity refers to the number and abundance of living organisms that help contribute to the robustness and efficiency of an ecosystem. These two concepts supply the indicators for assessing the sustainability of agriculture in the Lower Fraser Valley. These two theories work together to provide the intellectual framework for this thesis. The ecosystem approach provides a way of comparing and describing ecosystems and identifying the underlying causes of environmental problems. Environmental economics helps us analyse why those problems emerged by showing how economic incentives sometimes make poor management inevitable. Together, these concepts link h u m a n systems (such as the agri-food industry and land tenure arrangements) to the environment through biodiversity and nutrient cycling. The Ecologies of Scale Evan D. G . Fraser 12 Part K Theories / explanations Part II of this thesis establishes possible explanations for the persistence of on-farm environmental problems. First, we investigate whether farmers are themselves responsible for the impact that their farms have on the environment. Comments made by farmers and other people involved with Brit ish Columbia's food and agricultural economy demonstrate that farmers understand the implications of their actions, and stakeholders suggest social and economic factors favour ecologically poor farming. Farmers' actions support this assertion. Canadian census data clearly show that farmers make full use of government programmes designed to reduce the environmental impact of farms. Thus , when farmers have an opportunity to protect the environment, they do so readily. The next possible explanation is that insecure land tenure erodes long-term farm-conservation. In the literature, as well as in the comments made at public hearings held by the provincial government on the state of farming in B . C . , many argue that farmers who do not have secure land tenure will not have incentives to invest in long-term management of their properties. The third theory is that government subsidies encourage specific crops and provide an incentive for farmers to specialize only on these crops, thus promoting environmentally poor agriculture. The fourth theory is that global trade in agricultural commodities has led to serious problems for the environment because trade favours large, input-dependent farms that do not respect ecological limits. This position, however, is very controversial and other scholars suggest that increased trade allows farmers to specialize on those crops that are naturally suited to local ecological conditions, that this helps to increase incomes, and that higher incomes create demand for better environmental standards. Fourth, still another group of authors argue that some farm commodities are naturally suited to large-scale industrial processes due to the nature of the specific farm commodity. Briefly, some commodities can be efficiently raised using specialized machinery and high inputs. Other commodities cannot be produced in such a fashion. This explanation suggests that environmental problems may be a function of the specific commodity rather than the farming system. Part IE. Analysis Part III presents data from the Lower Fraser Valley to test each of these theories. A n analysis of rented versus owner-operated fields in chapter six shows that farmers who own their land plant more perennial species (which are less prone to soil erosion and cause less compaction problems) than farmers who rent their land. Fields that have long-term leases also have more legumes planted on them than fields with short-term leases (this is important as legumes fix nitrogen). This is consistent with what we expect from the literature on land tenure that posits that farmers with long-term tenure will make long-term investments in soil fertility. O n the other hand, grasslands (a very important component of sustainable agriculture) are planted with equal The Ecologies of Scale Evan D. G . Fraser 13 regularity on rented and owned fields. A special program that pays farmers to establish grassland for bird habitat explains this anomaly. Chapter seven applies data to test the theory that increased trade and a decrease in government subsidy lead to better environmental management. Data from horticultural farmers in the Lower Fraser Valley illustrate that (1) there has been an increase in trade and a decrease in government support for this industry (2) horticultural farmers have adopted better environmental practices in recent years. This is consistent with the theory that increased trade should lead to better farm management. It is unclear, however, if we can use this example to conclude that trade will generally lead to better management, or if this situation is peculiar to the Lower Fraser Valley. In order to answer this question, chapter seven examines how trade has had an impact on B.C.'s largest horticultural trading partner, California. Chapter eight explores the role of government protection. Although overall levels of government support to farmers have declined in the last ten years, poultry, dairy and egg farmers are still protected from international competition through government-controlled marketing boards. Since these boards were established, livestock farms have become both geographically concentrated and m u c h larger. This has resulted in serious groundwater pollution. Data from the two leading milk-producing states, California and Wisconsin, however, show a similar trend in the U S despite lower levels of government support. As a result, it is difficult to suggest that the supply management system is solely responsible for these environmental problems. In order to understand why livestock farms have grown large, it is necessary to analyse the historic and economic context of this industry. This includes technological innovation, government policy, local ecology, and the nature of the farm commodity. The Ecologies of Scale Evan D. G . Fraser 14 PART I - FRAMEWORK Thus far, we have uncovered a basic paradox: despite the fact that we possess a good scientific understanding of agriculture, food production causes serious environmental problems. Consequently, the research question of this thesis is "what are the causes of this paradox." The overall hypothesis is that social and economic incentives favour un-ecological agriculture. This hypothesis will be tested in the Lower Fraser Valley because this area: (1) has different forms of land tenure. (2) has farms protected by the government and farms that must compete on international commodity markets. (3) is environmentally sensitive. As a result, the Lower Fraser Valley is a relevant place to test competing hypotheses about the effect of social and economic incentives on farm-environmental management. The Ecologies of Scale Evan D. G. Fraser 15 Chapter 2 C O N C E P T U A L F R A M E W O R K : E C O N O M I C I N C E N T I V E S F O R P O O R E N V I R O N M E N T A L M A N A G E M E N T INTRODUCTION The objective of this section is to develop a methodology for assessing the environmental impact of the social and economic system on farms in the Lower Fraser Valley. This method must allow us to test specific hypotheses that will determine the influence of international trade, government policy, and land tenure on the environment. To create this methodology, the objective of this and the following chapter is to establish a theoretical relationship between social and economic influences and the environment. This chapter will review the literature on environmental economics, which helps to uncover the economic conditions that lead to environmental degradation. The literature on sustainable agriculture, reviewed in the next chapter, builds on this abstract foundation and develops specific indicators for the environmental problems caused by agriculture in the Lower Fraser Valley. We will first review the literature on the role and function of the market. Then, we will outline how markets fail to include environmental damage as a cost of doing business. Third , we will present three specific types of "market failure" that relate to the environment. In each of these three cases, we will include examples relating to agriculture and the Lower Fraser Valley that show how these "market failures" have an impact on the way farmers engage in environmental management. T H E M A R K E T In an ideal situation, entrepreneurs produce goods and services and compete for customers. Consumers buy these goods and services and generally choose the product with the lowest price. The price that consumers pay is a reflection of the cost of producing the item plus a profit margin for the entrepreneur. Competition between firms to attract customers ensures that the lowest price is available at all times, and the profit margin provides an incentive for firms to stay efficient. This system of economic organization has been so successful at distributing resources that it now dominates global society. Despite these successes, there is a rich and often controversial debate on how the market deals with such non-economic factors as the environment or social welfare (Clark, 1991; Jacobs, 1993; Panayotou, 1993). As a result, this literature helps us understand why environmental problems persist on farms. To understand why the market fails to recognize environmental concerns, it is necessary to quickly outline some of the ideas that capitalism rests on. As presented in A d a m Smith's The Wealth of Nations, modern capitalism is based on free competition that is supposed to lead to the most The Ecologies of Scale Evan D. G . Fraser 16 useful distribution of goods. Free competition, however, demands a number of pre-conditions: (1) Firms must not be able to exert significant influence on the market by withholding supply or dumping products. (2) No buyer can have enough control to influence the price of an input. (3) New firms must have the freedom to enter the market, while non-viable enterprises must be allowed to go bankrupt (Winson, 1992, p. 98). 5 Building on Smith's foundation, Stigler summarizes the neo-classical economist's position by focusing on the role that the consumer plays when she or he decides to buy a product: To maximize his utility, the buyer searches for additional prices until the expected savings from the purchase equals the cost of visiting one or more dealers. Then he stops searching and buys from the dealer who quotes the lowest price he has encountered (Stigler, 1966, p. 2) This position, says Stigler, assumes that consumers will maximize their own utility by seeking out the most advantageous way to use their resources. As a result, consumers must: (1) have constant tastes, (2) be correct when they calculate what is best for themselves, and (3) consistently seek to maximize their utility (Stigler, 1966, p. 57). Although Stigler readily acknowledges that these assumptions do not hold for all consumers all the time, he cites considerable empirical evidence to show that consumers in general use a process of rational utility maximization (Stigler, 1966, p 2 and 60). When it comes to the environment, we all have a direct stake in keeping it safe and clean. Therefore, consumer utility should ensure that deleterious production methods are not used. In fact, as long as the market is functioning smoothly, no resource should become extinct because rising market prices (caused by scarcity) will ensure conservation. Clark argues that resource scarcity should generate price signals that will lead to the creation of new ways to manage resources. New firms will also develop new products that can substitute for ones that have become scarce or to recycle old resources. Therefore, a declining supply of farmland will increase the value of remaining land until it becomes profitable to farm again (Clark, 1991, p. 320). 5 While Smith and his contemporaries revolutionarized the way we understand the economy, not all of what he wrote holds true today. For example, Smith argued that individuals would naturally support domestic over foreign industry, because it is in the individual's own interest to have a healthy local economy: By preferring the support of domestic to that of foreign industry, [the general population] intends only [their] own security; and by directing that industry in such a manner as its produce may be of the greatest value, [people] intend only [their] own gain... [they] are led by an invisible hand to promote an end which was not part of [their] intention... (Smith, 1776) The opportunities presented by the global economy illustrate that individuals do not necessarily support domestic industries. The Ecologies of Scale Evan D. G . Fraser 17 From this some argue that economic growth is good for the environment (Anderson 8B Strutt, 1996; Ervin , 1997; Greunspecht, 1996). While prosperity brings increased consumption, once people are affluent enough they will start to insist on environmental regulations (Arrow et al. , 1995). Paris, for example, built its first citywide sewer system because the bourgeoisie were concerned about their own health. In this case, Saul suggests that self-preservation was the primary motivator behind this massive public investment to obtain a better environment that would have been impossible in a less wealthy society (Saul, 1993 p. 239 8B 245). Similarly, in the future, economic growth may allow British factories and consumers to switch from coal to natural gas at some point. If this were to occur, the United Kingdom would substantially reduce its CO2 emissions while maintaining its present level of energy consumption (Jacobs, 1993, p. 56). Another case in point is the effect that the O P E C oil crisis had in North America. Due to (a) the increase in prices, and (b) the expectation that world-wide oil supplies were dangerously low (which itself led to the expectation that oil prices would continue to rise), companies and consumers became m u c h more energy conscious. This translated into reduced energy demands as companies in particular worked to become more energy-efficient (on-line source: http: / / www. eia. doe. gov / emeu / cabs / chron .html). 6 M A R K E T FAILURE Panayotou points out a number of situations when the competitive market mechanisms of supply and demand fail to protect natural resources (Panayotou, 1993). Panayotou argues that when resources are inefficiently used, or there are problems with environmental degradation, then a "market failure" has occurred. Market failures result when the pre-conditions for competition are not met. In Panayotou's opinion, a market failure has occurred (the following summarizes Panayotou, 1993, p. 8-22): (1) when waste and inefficiency co-exist with growing resource scarcity and shortages. For example, in the eastern part of the Lower Fraser Valley, surplus manure pollutes drinking water while there are nutrient deficits on farms at the mouth of the river. (2) when an increasingly scarce resource is put to a low value, inferior, a n d / o r unsustainable use when an alternative exists. For example, if wetlands, which are ideal but scarce bird habitat, are drained to provide fields that provide relatively low economic value. (3) when renewable resources are exploited (or mined) as if they were non-renewable. At the mouth of the Lower Fraser River, farms that plant cash crops year after year, draw down soil fertility and organic matter, which could be maintained through sustainable crop rotations, in order to provide short-term economic returns to farmers. 6 Note that not all policy makers share this opinion. T h e B u s h Administration's nat ional energy policy, unveiled in 2 0 0 1 , makes it very clear that increasing the U S domestic supply of fossil fuel is the best strategy for meeting A m e r i c a n d e m a n d for energy. The Ecologies of Scale Evan D. G . Fraser 18 (4) when a resource is put to a single use even though multiple uses would generate a larger net benefit. For example, fields in the Lower Fraser Valley could be organized to provide both bird habitat and economic return by coordinating rotations to ensure that a certain percentage of the land base each year was left fallow in order to provide habitat. (5) if investments in the environment or in ecological preservation are not taken even though they would generate a positive social "net present value" by increasing productivity or sustainability. A n example of this is when farmers fail to invest in tile drainage systems, level their fields, and plant wind breaks or shelter strips, although these improvements would improve both environmental protection and crop yields. (6) when resources and their by-products are not recycled even when this would generate both economic and environmental benefits. Again, the failure to use manure from livestock farms at the mouth of the Fraser River where it is needed is an example of this problem. The literature is rich with reasons why the market has failed the environment in these situations. Countless examples of environmental degradation led Berry to conclude that the "money economy" does not represent "The Great Economy" as the true costs of our actions are not always reflected in the price we pay for our services (Berry, 1987). Jacobs posits that the s u m of many individual decisions can create a huge (negative) impact unless there is careful environmental regulation (Jacobs, 1993, p. 22-23 & 25). Clark shows that the entrepreneur can profit at the public expense with no concern for environmental or social costs (Clark, 1991, p. 322). From an economic perspective Panayotou argues that many market failures result from unpriced, open-access or insecure resources such as government-subsidized irrigation water. Here, the government has failed to provide the legal backbone of capitalist competitive markets (Panayotou, 1993, p. 2 8s 27). Similarly, a common market failure is insecure resource tenure. Resource managers - farmers, foresters, fishers, or miners - must have well defined, exclusive, and secure tenure. They must also be able to transfer their tenure to other users. This will create the maximum incentives to conserve the resource for future generations. The laws that enforce these property rights must also be well-defined, and the penalties for committing an infraction must be higher than any possible benefits of the infraction. A second common market failure happens when the market does not accurately price a resource. This can occur when there is little or no competitive market for a resource, for example, if a crop is for subsistence and is not for sale on the market. 7 Alternatively, if the price a crop fetches only reflects the cost of labour, the opportunity cost and the capital costs, then it 7 Regardless of the market, subsistence farmers depend on the sustainability of their agricultural practices. Poverty or political uncertainty, however, may m e a n that subsistence farmers may externalize the costs of their practices. The Ecologies of Scale Evan D. G . Fraser 19 may not reflect any environmental damage caused by the production of that crop. In this case, the government must accurately price both the damage done and costs to the future (Panayotou, 1993, p. 39). For example, if the pesticide used on a rice farm hurts a down-stream fish farm, then the price of the pesticide should reflect the cost to the fish farmer who would then receive this as a subsidy from the government. In this way the economically "ideal" situation would be to price pesticides high enough that farmers will reduce their use to the point where the benefits that the rice farmer receives equals the cost of the pesticides plus the damage done to the fish farm. 8 A free market, however, will not automatically adjust the cost of the pesticide because pesticides affect non-economic populations such as plants and water, and there is no direct economic link between the rice and fish farms. In the real world, hundreds of farms, long range pollution, and the difficulty of assessing the cost of non-point sources of pollution make it impossible to realistically determine the marginal costs and benefits of pesticide and fertilizer use (Panayotou, 1993, p. 41 8& 42). A third problem occurs when monopolies or oligopolies prevent competition. Monopolies and oligopolies sometimes emerge in industries like energy and water provisioning. The major cost in providing energy or water is the infrastructure. Because of this, it is impossible to divide the initial investment among users in the same way that the cost of producing a consumer good is divided between the people who purchase that good. For these industries, average costs will fall as more and more customers come to the same company. In industries that require huge infrastructures, consumer markets may only be large enough to maintain one firm. As a result, a natural monopoly may form and this lack of competition may mean that there are few incentives to conserve scarce resources. T H R E E G E N E R A L CONDITIONS OF M A R K E T FAILURE, WITH EXAMPLES FROM T H E L O W E R F R A S E R V A L L E Y Jacobs and Panayotou both argue that three over-arching market failures consistently undermine the environment: (1) short-sighted planning, (2) negative externalities, (3) public goods (Jacobs, 1993; Panayotou, 1993). Short-sighted planning horizons and discounting. The conservation of any natural resource, be it soil organic matter, forests or water, involves sacrificing present consumption for the promise of future benefits. Panayotou points out that since people usually prefer immediate over future benefits "...such an exchange appears unattractive unless one dollar of sacrifice today yields more than one dollar of benefits tomorrow." (Panayotou, 1993, p. 50) In other words, there is an opportunity cost associated with conserving the environment (Clark, 1991, p. 324). 8 In this case, an economist would say that the marginal benefit of the sprays equals the marginal costs. The Ecologies of Scale Evan D. G . Fraser 20 Future benefits must be discounted and the more heavily they are discounted the less attractive conserving a resource is. The Brundt land report stresses that sustainable development must take into account the future. Any number of real world factors can increase the discount rate. Insecure land tenure, which means that a firm or individual may not reap the benefits of improving a resource, will increase the discount rate. Similarly, poverty will also increase discounting, as people who are worried about survival will not have the luxury of saving resources for subsequent years. When life or death is in question, any opportunity cost is too high to bear. Sustainable agriculture must take into account the future by ensuring that discount rates are low enough to ensure conservation. The behaviour of some farmers in the Lower Fraser Valley reveals a pre-occupation with the present indicating that they may face high discount rates. First, as will be discussed in more detail in subsequent chapters, farmers at the mouth of the Fraser River have focused on intensive soil-based agriculture and produce horticultural crops like potatoes and cole crops. Unless this is accompanied by the regular use of grass forage as part of the rotation, and the use of local manure for fertilizer, this draws down the natural fertility of the soil, hurts drainage, increases salinity, and causes compaction. Al l of these problems were identified by a major survey of this area (Klohn Leonoff Ltd. , 1992 p. 32). In this situation, farmers have put short-term profitability ahead of long-term soil conservation. Similarly, tenant farmers, who will not have the long-term planning horizon required to establish sustainable management practices, farm some of the land in this area. Myopic planning or a high discount rate, therefore is an indication of environmental difficulties. Externalities. The market does not assign a price to things that do not have a monetary value. As a result, the price of food reflects the immediate cost of production (such as the value of the land, the labour, and any equipment, processing and transport) but does not necessarily include any other costs incurred. In general, therefore, unregulated markets ignore social and environmental costs (Strange, 1988). If, for example, a livestock farm pollutes a stream because of poor manure management, and the farmer is not obliged to clean u p the pollution, this environmental cost will not appear in the price that the consumer pays. In this way, the pollution of the stream is an "externality" (Jacobs, 1993; Panayotou, 1993, p. 40-42). A n externality occurs when the price for a product does not include all the impacts of that good or service. While externalities can be negative or positive, in the environmental literature externalities refers more often to negative impacts. There are a number of ways that negative externalities are internalised. A firm may make a voluntary decision to take account of (negative) externalities. This may lower profits, pricing a firm out of the market unless the firm can obtain a premium price for producing an "environmentally The Ecologies of Scale Evan D. G . Fraser 21 friendly" product . 9 Alternatively, a government can pass legislation that taxes externalities or applies charges to firms that produce negative externalities. Governments may also establish regulations to internalise environmental costs. The fact that horticultural farmers at the west end of the Lower Fraser Valley do not import manure from the east to meet all their fertilizer needs illustrates how environmental costs are external to the market. Relative to chemical fertilizers, manure is heavy and takes up a great deal of space. Consequently, manure is expensive to ship. Farmers can usually only afford to ship manure if a transport truck has already dropped off its load and is returning with empty space (this is called the "back-haul"). In the Lower Fraser Valley, this is rare because trucks drive west along the trans-Canada highway carrying cargo destined for Vancouver or Victoria. When they return on the back-haul , they pass the region that concentrates on horticulture before they reach the livestock farms. As a result, the back-haul does not favour shipping manure to the west delta. Instead, manure tends to be shipped to the fruit-growing interior of the province, and the Sustainable Poultry Farming Group in Abbotsford has established the infrastructure to load manure onto trucks that are returning from Vancouver through the Rocky Mountains to the prair ies . 1 0 This economic situation would undoubtedly change if the price of the energy required to manufacture chemical nitrogen included the environmental cost of using fossil fuels. These costs include global climate change and acid rain (Rees, 2000; The Union of Concerned Scientists, 2000, electronic source). Most commercial nitrogen fertilizer is manufactured using the Haber process that takes dinitrogen gas from the atmosphere and combines it with hydrogen at high temperatures to produce ammonia ( N H 3 ) . This energy-intensive 9 A number of companies have found that by volunteering to internalise costs they have developed new and creative ways to produce goods and services. This has lowered costs while reducing environmental impact. For example, Interface Corporation, one of the world's largest carpet and textile manufacturers, has voluntarily pursued a zero waste strategy in an industry that is notorious for the pollution caused by its energy-intensive activities. Between 1994 and 1998, Interface not only dramatically cut waste, but also kept input constant while seeing revenues rise by $200 million (Lovins, Lovins, & Hawken, 1999)By adopting a strict environmental policy, Interface achieved two specific business advantages: (1) their cost of production dropped through innovative manufacturing procedures, and (2) they have benefited from extremely good publicity. Subsequently, Interface has been able to capture a growing share of an increasingly environmentally conscious global market. Interface now promotes itself as a company that is "...doing well by doing good." The reverse also holds true and consumers can demand that companies include the cost of the environment when they do business. MacMillan Bloedel, targeted by European environmentalists concerned with clear-cutting in old growth forests, lost approximately 5 per cent of its direct sales overnight when Scott and Kimberly-Clark dropped them as their U.K. supplier of wood fibre (Lovins et al., 1999) 1 0 Recently the B.C. organic farming industry has grown. This has increased the demand and price of manure. Consequently, organic farmers, and some conventional farmers, in the Lower Fraser Valley are now shipping poultry manure to their farms, though this is still a rare practice. The Ecologies of Scale Evan D. G . Fraser 22 process requires approximately 18,000 calories to produce one kilogram of plant available nitrogen (King, 1990, p. 102). Alternatively, 1,000 kg of coal is needed to make approximately 2.5 kg of nitrogen fertilizer (Purves, Orians, & Heller, 1992 p. 684). As a result, the cost and availability of fertilizer is directly dependent on the price of energy. Currently energy is so cheap that chemical fertilizers are regularly over-applied all over North America. Corn typically uptakes only 50 per cent of the chemical nitrogen (N) that is applied, while other grain crops grown in North America generally receive 30 per cent more N than they utilize. In Iowa this has resulted in a tripling of nitrate levels in ground water between 1958 and 1983 (Soule 8& Piper, 1992), and in the Fraser River Valley the Abbotsford aquifer has experienced a rise in nitrate levels. 1 1 Al l over the U S and Canada, a huge amount of fossil fuel is used needlessly in order to synthesize chemical fertilizer that is wasted. This example highlights two separate externalities. First, livestock producers do not bear the cost of nutrient pollution. Second, the use of chemical nitrogen does not include the environmental cost of fossil fuels. Both of these problems could be addressed if the environmental cost of the fossil fuel was included in the price of chemical nitrogen. If this was the case, the relative prices of manure (which is currently considered a waste product) and fertilizers would undoubtedly change. Public Goods The third market failure is the corollary of externalities. The market can efficiently assign values to some resources, but not all of the goods provided by this planet fit into this framework. Jacobs (1993), points out that resources such as clean air and water are "public goods" because they provide benefits for all people, yet none can personally profit from them (Jacobs, 1993; see also Panayotou, 1993, p. 44). In other words, if a firm was to produce a "public good" for one consumer they would have no way of excluding all other potential consumers from using it at no cost. Similarly, consumers of public goods cannot limit their consumption and will always use roughly the same amount no matter what the circumstances. Panayotou argues that public goods are goods "that have only externalities" (Panayotou, 1993, p. 44). As a result, no one individual can obtain profit from these, they are free for the consumer, and valueless from the perspective of the market. In a capitalist setting, public goods are inevitably under-produced and under-valued despite the fact that they may be integral to our survival. This is relevant to our discussion because farmland produces both public goods and private goods. The private goods it produces are the commodities that the farmer can sell on the market. According to Ostrom, these goods are "subtractable" and "excludable" (Ostrom et al. , 1994, p. 7). 1 1 Although there is a consensus in the literature that concentrated livestock production leads to nutrient overloading and nitrate pollution, other factors may contribute to elevated nitrate levels in groundwater. For example, if grasslands are cultivated for the first time, large amounts of organic matter will decompose and send a pulse of nitrogen through the system that may also contribute to increased water pollution. The Ecologies of Scale Evan D. G . Fraser 23 Commodities are sub tractable because once the food is consumed it is gone. Excludability refers to the fact that once a consumer purchases the commodity all other consumers are excluded from using it. Farmland, however, also provides public goods that are neither subtractable nor excludable. Wildlife habitat, the conservation of biological diversity, and rural amenity, are all services that farmland provides, yet farmers cannot profit from any of these services because they are not subtractable or excludable. Consequently, farmland is managed to produce maximum private goods, but public goods are often ignored. The study area for this thesis clearly represents this situation. As was already discussed, the Lower Fraser Valley lies on the Pacific Flyway, an extremely important ecological area that provides a twice-yearly stopping ground for millions of migrating birds. These birds do a huge amount of damage to crops and are a liability to local farms. Farmers find themselves in conflict between the economic need to produce private goods that they can sell and the very important, yet non-economically beneficial public goods their land provides to the ecosystem. CONCLUSION The objective of this chapter was to establish the theoretical relationship between economic incentives and the environment. Based on the environmental economics literature, we observe that when the market fails to include the costs of pollution or land degradation, there are incentives to undermine the environment. There are three over-arching types of market failure: (1) a high discount rate leads resource managers to adopt a short term planning horizon. (2) negative externalities occur when the cost of pollution is not factored into the price consumers pay for a product, and (3) if environmental services are public goods resource managers will not be able to profit from them. Preliminary evidence, presented as examples of each of these market failures, suggests that discount rates, negative externalities, and public goods all create incentives for bad management on farms in the Lower Fraser Valley. It is necessary, however, to move beyond these examples and systematically analyse how market failures influence farmers in this region. To do this we need to establish specific indicators that will identify good and bad environmental management on farms in the Lower Fraser Valley. The next chapter builds on the sustainable agriculture literature and develops indicators that are used in this thesis to show when market failures have occurred. The Ecologies of Scale Evan D. G . Fraser 24 Chapter 3 CONCEPTUAL FRAMEWORK PART II: T H E ECOSYSTEM APPROACH TO AGRICULTURE INTRODUCTION The objective of this chapter is to develop indicators of sustainable agriculture that are relevant to the Lower Fraser Valley and show where market failures have occurred. To meet this object, this chapter reviews the sustainable agriculture literature that provides a picture of sustainable farming. This literature suggests that sustainable farms must try to emulate natural or undisturbed ecosystems. This is based on the belief that natural systems, because they have evolved over millennia, are inherently more stable and balanced than most human-designed systems. Benyus (1997) is one of the strongest promoters of this view. In her seminal book, Biomimicry, she argues that: The core idea is that nature, imaginative by necessity, has already solved many of the problems we are grappling with. Animals, plants, and microbes are the consummate engineers. They have found what works, what is appropriate, and most important, what lasts here on Earth. This is the real news of biomimicry: After 3.8 billion years of research and development, failures are fossils, and what surrounds us is the secret to survival. (Benyus, 1997; quote on-line at http://www, biomimicry. org/fag, html) This book, and others like it, lay out detailed explanations of how we can use the earth's natural systems as a model to design our own society (for example, see Lovins, 1999; Nattrass, 1999; Hawken, 1994). While using nature as a template establishes a strong normative framework, it does not provide many practical benchmarks that are useful for assessing specific problems such as agriculture's impact on the environment. As a result, the purpose of this chapter is to move beyond the categorical position that sustainable systems should emulate nature, and develop specific methods that will allow us to analyse agricultural systems while using nature as a model. This chapter has three parts: the first section presents literature that highlights the importance of using nature as a model. As will be illustrated, this provides a starting place, but does not give us the specific tools we need to assess agricultural systems. The following sections develop two ecological concepts as methods for assessing agriculture: section two operationalizes the concept of biodiversity; 1 2 section three assesses problems of soil conservation and water pollution from the perspective of nutrient cycles . 1 3 1 2 Biodiversity. "The variety, distribution, and abundance of different plants, animals, and microorganisms, the ecological functions and processes they perform, and the genetic The Ecologies of Scale Evan D. G . Fraser 25 S U S T A I N A B L E A G R I C U L T U R E 1 4 For many of the environmental problems caused by agriculture (such as soil nutrient depletion, nutrient overloading, water pollution, erosion and compaction: see chapter 1), there are simple technological solutions. Sub-soiling, deep tilling, and the careful timing of farm work can substantially reduce compaction. Spreading lime and increasing organic matter helps buffer soil against acidification. A more expensive solution to drainage problems is to establish sub-soil tiles and run-off ditches to ensure that fields are well drained and kept free from salination. At a more fundamental level, however, there is a consensus in the literature that, from a bio-physical perspective, sustainable agriculture (or agriculture that does not degrade the l and base while providing adequate income to farmers) must move towards using nature's own ecosystems as a model (for example, see: Altieri, 1990; Gliessman, 1998; Ikerd, 1997; Mannion, 1995; Mineau 8B McLaughton, 1996; Paoletti, Pimentel, Stinner, 8B Stinner, 1992; Soule 8B Piper, 1992; Thrupp, 1997). 1 5 The natural model is useful because: ... contemporary life is fundamentally supported by natural processes, such as the capturing of energy from the sun by photosynthetic organisms and the purification of air and water. These processes are essential to maintaining human life. However, as a society we are systematically altering the ecosystem structures and functions that provide life-supporting services. diversity they contain at local, regional or landscape levels of analysis." (Dunster & Dunster, 1996 p. 37) 1 3 Nutrient cycling. "Circulation or exchange of elements, such as nitrogen and carbon dioxide, between nonliving and living portions of the environment. Includes all mineral and nutrient cycles involving mammals and vegetation." (Dunster & Dunster, 1996 p. 224) 1 4 One of the earliest uses of the term sustainability was in a 1972 article from The Ecologist entitled "The Blue Print for Survival." The term later gained popularity with the publication of the U.N.'s Brundtland Report in 1986 (Mclsaac, 1994). According to the Brundtland report, sustainable development depends on ensuring that the needs of future generations are not compromised by our behaviour today. Edwards et. al. believe, however, that since future needs cannot be perfectly anticipated, sustainable agriculture must be a system that can evolve indefinitely "...towards greater human utility, greater efficiency of resource use and a balance with the environment that is favourable to humans and most other species" (Edwards, Lai, Madden, Miller, 8s House, 1990). This has been further interpreted to mean that sustainability must be ecologically sound, economically viable, and socially responsible (Ikerd, 1997, p. 14). 1 5 There is no single definition of sustainable agriculture. At its most fundamental, sustainability means change. Implicit in any discussion on sustainability is the realization that there are some problems with the way we currently do something and some vision about how to correct these failures. It is important to remember, however, that no system will be entirely "sustainable." Consequently, sustainability also means constant change, as circumstances and technologies shift over time. The goal of sustainable agriculture, therefore, is a process where we continually change our management in order to reduce our negative impact on the environment. The Ecologies of Scale Evan D. G . Fraser 26 (The Natural Step, 2001; Online source: www, naturalstep. org) According to Hawken (1994) some of today's most successful and innovative businesses have benefited financially by "...redesigning industry on biological models with closed loops and zero waste..." (Hawken, 1994, quoted from online source: http: / /www.natcap.org/sitepages/pid5.php) When it comes to applying this concept to agriculture this is sometimes called the "ecosystem approach." Literature promoting the ecosystem approach tends to identify a broad range of management practices that are good for the environment. For example, Pierce believes that in order to mimic natural ecosystems the sustainable farmer must: (1) Promote species diversity and soil nutrient conservation by using crop rotations. (2) Recycle nutrients on the farm through composting and using animal manure. (3) Diversify crops through multi-cropping various plant species and agroforestry. (4) Reduce the accumulation of animal wastes by integrating livestock and horticultural products onto one farm. (5) Increase energy efficiency (Pierce, 1993, p. 382). According to this literature, sustainable agriculture should also promote the use of solar power, enhance species diversity and nutrient cycling, use perennial crops, and minimize chemical use. Sustainable agriculture should move away from using chemicals that are not a natural component of local ecosystems and minimize the use of chemical fertilizers. Fertilizers cause problems because, when over-applied, they contribute to ground water pollution. Chemical fertilizers also require large amounts of fossil fuel energy to produce (King, 1990, p. 92-102). Others point to pre-capitalist or subsistence agriculture for examples of sustainable agriculture. For example, Altieri uses the traditional farming systems of South and Central America to illustrate that peasant systems, which did not have the benefit of any inputs other than h u m a n and animal labour, (a) cause no serious soil degradation (b) mimicked natural ecosystems to a greater degree than most modern agricultural systems, and (c) were highly productive in terms of yield (Altieri, 1990, 1999). Using the native Kansas prairie as a model, Jackson has attempted to devise an economically efficient grain production system that mimics the natural ecosystem. Jackson has shown that grain can be efficiently produced with few inputs and perennial grain species. Jackson's system ensures that there is continuous crop cover to minimize soil erosion (Jackson, 1998, public lecture). To achieve this he has been able to use traditional plant breeding techniques to produce productive perennial grasses that are representative of the native prairie ecosystem. By combining a mix of species, Jackson has also managed to control losses to pests, and through complex crop rotations he has kept nitrogen levels high enough to require few inputs (Jackson, 1998, public lecture). Soule and Piper argue that sustainable agriculture would also reduce the wide-spread use of heavy machinery. This machinery is not only energy-intensive, it also directly contributes to soil erosion in four ways: (1) heavy The Ecologies of Scale Evan D. G . Fraser 27 farm equipment encourages farmers to plant large, regularly shaped fields, with few wind breaks, straight planting lines, and rows that r u n along slopes. This creates a situation that is conducive to soil erosion by wind and water; (2) heavy farm equipment compacts the soil, breaks u p soil aggregates, reduces moisture retention and may create a compacted plough pan below the surface of the field that reduces root depth and drainage capacity; (3) by displacing draught animals, tractors have eliminated an on-farm source of manure; and (4) specialized equipment is not compatible with complex crop rotations. Once a farmer invests in specialized planters or harvesters, he or she is less likely to plant a diversity of species (Soule & Piper, 1992, p. 50-56). More generally Macrae et. al. argue that the progress towards sustainable agriculture has three steps (Macrae, Hennings, 8B Hil l , 1993, p.22-23). The first step is to increase efficiency, which means that conventional systems must be altered to reduce waste and environmental impact and make current practices less destructive. The second stage is to substitute damaging products and non-renewable resources for more benign ones. Replacing synthetic fertilizer with organic matter would be an example of the second stage. The third stage would involve redesigning entire systems to mimic natural ecosystems by taking into account nutrient cycling and biodiversity. Sustainable agriculture must also be economically viable and socially acceptable to farming communities. Consequently, Pierce writes that sustainable agriculture must maintain or enhance environmental quality, provide adequate social and economic returns for all firms involved, and provide a sufficient and accessible source of food for consumers (Pierce, 1993, p. 383). Olson points out that although ecological knowledge is necessary for environmental sustainability, farms succeed and fail in the "real" world of competitive markets and global commodity trading (Olson, 1992 p. 9-10). As a result, any improvements in a farm's ecological sustainability cannot be made at the expense of economic viability or social relevance. 1 6 As evident from this brief review, the sustainable agriculture literature ranges from suggestions on micro-level management (i.e. Soule and Piper's suggestion that sustainable agriculture is incompatible with the use of heavy machinery) to very broad concepts like Macrae's three stages of sustainable agriculture. Unfortunately, there is little in this literature in the way of systemic or analytic tools that we can use to evaluate agricultural systems. While using natural systems as a model is an intuitively appealing concept to authors writing from within the environmental movement, there is a real need to rigorously understand what components of natural systems we should try to copy, and what this means for how we produce food. The remainder of this chapter will develop two ecological concepts as analytic tools to evaluate agriculture in the Lower Fraser Valley: (1) biodiversity, and (2) nutrient cycling. 1 6 This might lead to a catch-22 where the only way a farmer can improve economic viability is to externalise environmental costs The Ecologies of Scale Evan D. G . Fraser 28 E C O L O G I C A L C O N C E P T # 1: B IODIVERSITY Long recognized as a necessary component for good environmental management, biodiversity has rested at the centre of the global environmental agenda for at least ten years. In 1992, the United Nations established the Convention on Biological Diversity. The U.N.'s Global Environment Facility (GEF) published a draft biodiversity and agriculture policy titled "Conservation and Sustainable use of Biological Diversity Important to Agriculture." In it, the authors argue that biological diversity itself presents opportunities for enhancing soil fertility, naturally controlling pests, and reducing the use of pesticides while maintaining yields (Global Environment Facility, 2000, p.3). The Canadian Department of Agriculture and Agri-Food's "Strategy for Environmentally Sustainable Agriculture and Agri-food Development in Canada" states that one way to assess sustainable agriculture is to "...monitor biodiversity in agricultural ecosystems by measuring changes in ... species diversity and abundance." (Canada, 1997, p. 13). The Canadian Government's "Action Plan for Food Security" argues that if environmental challenges are to be overcome in agriculture, Canadian farmers must "...conserve genetic resources." (Canada, 1998a, p. 19) To achieve this, the Canadian government plans to "... implement. . . strategic directions aimed at the conservation and sustainable use of biological diversity in agricultural areas..." Canada's International Development Research Counci l (IDRC) argues that modern agriculture is vulnerable to problems because "...a few major crops feed most of the world and many are genetically similar." (IDRC, 1992, p. 48-51) Moving beyond bureaucratic policy statements, Altieri postulates that one reason that conventional industrial agriculture is dependent on pesticides is that monocultures are extremely susceptible to pest outbreaks (Altieri, 1999). Following this logic, if a farmer depends less on monocultures there will be a reduced demand for chemical pest control. Mineau and McLaughton, and Soule and Piper all argue that chemical inputs act as substitutes for natural processes (Mineau 8B McLaughton, 1996, p. 94; Soule 8B Piper, 1992, p. 56). For example, the application of fertilizer replaces the decomposition of organic matter that forms the fertilizer for the next generation of plants. Altieri, Benbrook, Gliessman and Mannion all present cases where increasing species diversity in a field enhances pest resistance (Altieri, 1999; Benbrook, 1990, p. 68; Gliessman, 1998, p. 24; Mannion, 1995, p. 13-14). Al l four authors independently argue that biologically diverse agricultural systems are better able to withstand pest outbreaks or adverse climate conditions, and recover faster after such disturbances, than conventional systems. Certain "weeds" for example, can be used as trap crops for some pests. For example, planting a small number of eggplants in a potato field will attract potato grubs away from the harvest crop. Providing habitat for bird species that prey on such pests as the European corn borer and the codling moth will also reduce pesticide demands. Leaving two to three uncultivated metres at the edge of each field (a "field margin") provides a break between The Ecologies of Scale Evan D. G . Fraser 29 crops, thus reducing the chance that a single pest will destroy an entire harvest (Mineau & McLaughton, 1996, p. 97-101). It is also important for farmers to promote biodiversity by planting different crops on the same field year after year. Rotating crops has been used for centuries by many different cultures to prevent pests from building u p and to conserve soil fertility. Crop rotations should include forage crops, grains, legumes, as well as horticultural commodities (Benbrook, 1990, p. 71). This has a number of benefits. First, pests that are specific to one crop will not accumulate. Second, forage crops do not require cultivation as do horticultural crops. Therefore, farmers will not compact the soil or pulverize aggregates when a field is in forage. Third , legumes fix atmospheric nitrogen, the most limiting of all soil nutrients, making it accessible for crops in subsequent years. Soule and Piper state that problems of agricultural pollution can be reduced by properly planning the selection of species in a crop rotation (Soule & Piper, 1992). For example, if a farmer plants a shallow rooting crop one year, and follows it with a deep rooting crop, nutrients that leach below the root zone of the first crop will be accessible to the deeper rooting species. Similarly, planting a fall/winter cover-crop without fertilizer will help to absorb excess nitrogen that was applied during the main growing season and would otherwise end up in ground water. The effect of these sort of management practices is highly site-specific. For example, in some fields it will take nitrogen years to move through the soil and pollute ground water. In other areas, this may happen m u c h more quickly. This will influence whether different rooting depths will be effective at uptaking surplus nitrogen. Of key consideration is the amount of precipitation that an area receives, drainage, and soil structure. Nutrients will typically pass quickly through well-drained soils that experience large amounts of rain and pollute ground water. If soils are dry for m u c h of the year, or are not well drained, then there is less chance that excess nutrients will pollute ground water. Another important site-specific characteristic is the soil's ability to absorb nutrients or the "cation exchange capacity" of the soil. Typically sandy soils have a lower cation exchange capacity and are m u c h more prone to leaching than clay soils. Finally, some authors see agriculture as an enemy of biodiversity because, by definition, it involves cultivating only those species that are useful to h u m a n welfare (Mannion, 1995, p. 13-14). Clearing new farmland also destroys natural habitat and, when marginal land is cultivated, problems of soil degradation and erosion are compounded. Industrial agriculture, which focuses on the large-scale production of single-crop fields - the hated monoculture - usually requires environmentally damaging chemicals and fertilizers to sustain high outputs. As a result, Srivastava et. al. point out that agriculture and biological diversity are intimately connected (Srivastava, Smith, 8B Forno, 1996, p. l ) . The Ecologies of Scale Evan D. G . Fraser 30 The difficulty of using biodiversity as an indicator of sustainable agriculture Based on this discussion, it is clear that biodiversity is an indicator that we might use to identify sustainable agriculture. This is especially relevant considering that two of the most serious problems facing the global environment today are species extinction and habitat loss. Consequently, it seems reasonable to suppose that any increase in farm biodiversity should (1) reduce the negative impact that farms have on the local environment and (2) benefit the global environment. Unfortunately, when we move beyond these general statements, and try to apply biodiversity to the farmer's field we r u n into significant problems. There is a serious gap in the current literature because there seems to be no practical way to use our understanding of the benefits of biodiversity as an indicator of good farming practices. For example, there are at least three situations where a "high-diversity farm" is less sustainable than a farm with a lower diversity. 1. Species composition. A field with only one species present may be more desirable or more sustainable than a field with a larger number of species if these species compete with the crop that the farmer is trying to grow. In other words, although a weedy field will have higher biodiversity it will require more management than a field that does not have many weeds. This will often involve the addition of chemicals or mechanical cultivation that can lead to pollution, erosion and compaction. Some fields are more prone to invasive weeds than others based on their physical location or past management. The composition of the species, therefore, is integral to understanding whether increased diversity translates into better environmental health. 2. Species abundance. Imagine two fields of exactly the same size. In the first field, four crops are evenly distributed while in the second about 80 per cent has been planted with wheat while the remaining 20 per cent has a number of vegetables (this could be a grain farm with a small vegetable garden). Field two would have a higher diversity. However, because just one crop occupies the majority of the land the farmer may r u n the risk of losing the entire crop or having high pesticide costs if a pest becomes established in the second field. The first field, on the other hand, has less diversity but, because the crops are more evenly distributed, any given pest will only damage 25 per cent of the field. This should translate into decreased pesticide costs. As a result, in order to assess the benefit of crop diversity it is necessary to know the relative abundance and spatial distribution of the crops. 3. Temporal composition. One final example illustrates the difficulties of using biodiversity as an indicator of farm sustainability. A crop rotation that involves cabbage, potatoes, broccoli, and cauliflower, may be less sustainable than a crop rotation that alternates between potatoes and wheat. Although the first crop rotation seems to have a higher biodiversity, three out of four species are from the same genus of plant (cabbage, broccoli and cauliflower are all from the genus Brassica). The Ecologies of Scale Evan D. G . Fraser 31 These crops all share many of the same pests and these pest may accumulate in the field one year to the next. The second rotation, although it only involves two species may have less of an impact on soil structure and organic matter because wheat does not require the constant cultivation that the horticultural crops require and because wheat leaves a residue that returns organic matter to the soil. In order to tell which is more sustainable it is necessary to consider at least two additional factors. First, soil aggregate stability, or the ability of the soil to withstand compaction is very important. In the poorly drained, easily compacted soils at the mouth of the Fraser River, growing any combination of crops that requires regular cultivation will cause problems. If, on the other hand, the soil is well drained and coarse textured (like the sandy soils east of the Fraser River delta) then it may be possible to grow crops like potatoes more frequently. The second factor that must be considered is pest outbreaks. Major pests like the potato tuber beetle (which is not itself a problem in the Lower Fraser Valley of British Columbia) will accumulate over time if the same crop is planted in a field year after year. If these pests are a problem, it is important to space the crops that are susceptible to them so that the pests do not reach an epidemic level (Kabaluk & Vernon, 1999, p. 10-11). Umaerus suggests that in the Netherlands it is necessary to plant potatoes only every three to five years to reduce the chance of nematode infestations (Umaerus, 1992 p. 241-249) Scholte argues infections of potato stem canker are reduced when potatoes are just one element of a larger rotation. Crop rotation, however, does not seem to have an effect on incidences of tuber scab (Scholte, 1992 p. 93-102). What is required is a system that does not over-simplify data on biological diversity by assuming that an increase in the number of crops planted in an area necessarily translates into a better environment. In order to develop this system it is necessary to understand the benefits that a biologically rich system offers, and then develop methods that analyse these benefits. First, diversity can improve the robustness or resilience of farm systems so that it is able to deal with pest infestations or variable weather patterns. One key to biodiversity is to have enough species present so that if a pest or an extreme weather pattern affects one crop then the whole system will not fail. Diversity can also reduce the pollution caused by conventional farming . 1 7 For example, by growing a diversity of crops, fewer pesticides are required because any particular pest will only affect a small portion of the total crop. Similarly, interspersing shallow and deep rooting species in a crop 1 7 For example, agriculture is the world's largest source of water pollution (Gliessman, 1998; Schreier et al., 2000). The Ecologies of Scale Evan D. G . Fraser 32 rotation will reduce the chance that excess nitrogen will leach below the rooting depth of the shallow species and pollute the water table . 1 8 Third , many authors express the worry that: (a) habitat destruction contributes to species loss; and (b) on-farm specialization contributes to the extinction of traditional crops. Farms that have high diversity may preserve species by (1) promoting indigenous forms of crops, (2) providing/protecting habitat. Finally, a farmer with a large number of crops is not as vulnerable to changes in market prices as the farmer who specializes in just one crop. This is a form of economic robustness. Jus t like ecological robustness, which allows ecosystems to survive weather and other environmental shocks, economic robustness allows a farmer to adapt to the changing demands of the market without going bankrupt. New method for using biodiversity as an indicator of sustainable agriculture No single measure of biodiversity will provide a scientist or policy maker with insight into all of these benefits at all scales. For example, a scientist concerned with the ability of a field to withstand pest outbreaks without additional chemicals will have a very different criterion than the scientist interested in species preservation. As a result, ecologists divide biodiversity into the following three categories: Alpha biodiversity. Alpha biodiversity is usually measured by comparing the number of species in an area with the abundance of those species and the total area. For example, a statistical formula that compares abundance could be used to measure alpha biodiversity. Alternatively, the biomass, the respiration rate, or the percentage cover for each species could be analysed for an area (Spellerberg, 1991). Beta biodiversity. Beta biodiversity is the ecologists' way of comparing biodiversity along a transect. Usually a path is walked through two different habitats and at random intervals a sample is taken of the number of species present. This gives an indication of the change in species composition over a spatial range (Spellerberg, 1991). Gamma biodiversity. G a m m a biodiversity is like alpha diversity, but on a larger scale. The ecologist defines different types of habitat and then examines the arrangement of these patches over a larger area (Spellerberg, 1991). To assess sustainable agriculture, this thesis used data on only those species of plants that farmers actively cultivate (thus the focus of this thesis is on "agro" diversity). Then, this thesis built on already existing ways of measuring alpha diversity, and developed two different methods of calculating "alpha-agro diversity." First, the per cent of the total arable land base 1 8 Again , it is important not to over-generalize, as m a n y of these factors will be site-specific. Since the Lower Fraser Valley receives so m u c h rainfall in the winter, nitrogen will leach below the root zone very quickly in soils with a low cation exchange capacity. The Ecologies of Scale Evan D. G . Fraser 33 occupied by the largest four crops (by area) was determined by year for horticultural crops at two different scales (local and provincial). Second, this research modified the Herfindahl index, a common statistical index that measures the proportional area of a crop relative to the total land area (Bradshaw and Smit, 1999), to statistically assess diversity. This created a "relative specialization" score that was calculated at both the provincial level and for one specific farm community. The formula developed to determine the relative specialization score is: S(area of one crop - average area of all crops) 2 / average area of all crops In other words, first the average size of all fields was subtracted from average sized field for each crop. The difference between these numbers was squared and then divided by the average size of all fields. This was done for all crops and the results of each crop were added together. The higher the score, the more concentrated (i.e. less alpha diversity) the crops in the area studied are. Relative specialization scores were calculated for both provincial and field data for each year. Two hypothetical examples illustrate the use of this formula. In both cases there are four crops planted on a total of sixteen hectares. Table 3-1 shows a scenario where one crop dominates and the relative specialization score equals 27. In Table 3-2 the crops are more evenly distributed and the relative specialization score is 1. The Ecologies of Scale Evan D. G . Fraser 34 Table 3-1 A hypothet i ca l s i tuat ion where the crops i n the field are h ighly spec ia l ized Crop Field Size Average Relative Specialization Potatoes 1 ha 4 h a ( l -4) 2 /4 = 2.25 C o r n 13 ha 4 h a (13-4)2 /4 = 20.2 Pasture 1 ha 4 ha (1-4)2 /4 = 2.25 Beans l h a 4 ha (1-4)2 /4 = 2.25 Relative spec. 27 Table 3-2 A hypothet i ca l s i tuat ion where the crops i n the field are diverse Crop Field Size Average Relative Specialization Potatoes 3 h a 4 h a (3-4)2 /4 = 0.25 Corn 3 h a 4 h a (3-4)2 /4 = 0.25 Pasture 5 ha 4 ha (5-4)2 /4 = 0.25 Beans 5 h a 4 ha (5-4)2 /4 = 0.25 Relative spec. 1 The Ecologies of Scale Evan D. G . Fraser 35 Because different crops have different requirements and cause different problems, it necessary to combine relative specialization scores with an assessment of specific crops. For example, as was discussed above, potatoes are an especially demanding crop on the soil and potato pests build up in the soil if potatoes are planted on the same fields year after year. Therefore, it is important to assess how often potatoes are planted and if they are planted in adjacent fields where pests could easily move from one field into another. If potatoes are planted regularly on the same fields, especially if these fields are compaction-prone, then this is an indication that the farmer is using management practices that may be prone to pest outbreaks and require the use of potentially damaging chemicals. The frequency that legumes are planted is another good indicator of farm sustainability. As will be discussed in the section on nutrient cycling, legumes fix atmospheric nitrogen, making it available for plant growth. Although some legumes are harvested as crops, nitrogen fixation occurs in root nodules and is stored below ground. Therefore, although different crops leave different amounts of nitrogen in the soil, they all contribute to the nitrogen that is left in the field for the next c r o p . 1 9 Consequently, the number of times legumes are used in a crop rotation is another important indicator for sustainable agriculture. It is important, however, not to over-generalize. Some legumes, such as peas and beans, are cash crops that farmers plant and harvest in the same year. These crops return very little organic matter to the soil, may require soil-damaging management, and provide an immediate cash return to farmers. Clover, however, is a legume that a farmer would plant as a forage crop or part of a grassland set-aside. Forage legumes do not require regular cultivation, return substantial amounts of organic matter to the soil, and do not add to a farmer's income. Although, peas, beans, and clover are all legumes, they play a different role in soil conservation. Therefore, to use legumes as an indicator of good management it is helpful to disaggregate legumes into forage and cash crops. Third , the number of fields with perennial crops is also a good indicator. Perennial crops (like strawberries) grow year after year and do not need seeding every spring. Although most perennials do not provide a harvestable yield in the year they are established, once they are mature they provide a return for a number of years. Strawberries, for example, do not fruit in the year that a farmer plants them because farmers usually clip the flowers to force the plant to develop a strong root structure and thick leaf mass. If properly tended, however, they will fruit in the second year and should keep fruiting for at least four years. Perennial crops are important for soil conservation because they provide year-round cover that protects the soil from wind and rain erosion. They are also less demanding on the soil 1 9 Average Fixation of N by legumes (in kg per ha 1 of N fixed): Alfalfa 217; Ladino clover 200; Sweet clover 133; Cowpeas 100; Vetch 90; Peas 72; Soybeans 65; Beans 45; Peanuts 44. The Ecologies of Scale Evan D. G . Fraser 36 because, unlike annual crops where the field must be ploughed every spring, perennials do not require as m u c h cultivation. The roots from perennial crops stabilize soil aggregate structure all year-round and the action of the roots growing through the soil reduces compaction. A high proportion of fields with perennial crops indicates good farm management. As with all of these indicators, however, we must proceed with caution. Some perennial crops can have negative environmental implications. For example, in the central and eastern part of the Fraser Valley, many farmers have established large raspberry monocultures. These genetically uniform fields tend to be planted in long straight lines with tilled soil between rows. This creates an environment susceptible to pest outbreaks and high pesticide costs and presents a number of problems. First, because the spaces between the raspberry rows are tilled, there is little to protect the soil from wind and rain erosion. Second, the raspberries are the dominant field crop in the region surrounding intensive dairy and poultry production. As a result, farmers tend to use these fields to dispose of manure. However, the fruit that is harvested from a raspberry bush has very little nitrogen in it and most of the nitrogen that the plants uptake is stored in the cane and roots of the plant. Instead of removing surplus N, these crops just trap it for a period. When the plants are pruned or lose their leaves, they decompose and release the nitrogen that they had stored. Third , when many of the raspberry fields were established, farmers ploughed under old pasture-lands that were no longer needed to support cattle. The nitrogen that had accumulated over the generations in these fields then decomposed, adding to the nutrient over-loading caused by intensive poultry and dairy farms. As a result, while the frequency of perennial crops can be used as an indicator of sustainable farm management, it is vital to understand the context that they are grown in. From the perspective of soil conservation, grasslands are probably the most important type of perennial crop. Although these crops offer no financial return to the farmer, turning a field into a grassland for two or three years helps build up organic matter, which buffers the soil against acidity, reduces any compaction that may have occurred when the field was cultivated, and provides year-round protection against wind and water erosion. Grasslands also often include clover, which is a nitrogen fixing legume. The presence of grasslands, therefore, is very important for farm sustainability. Finally, grain crops are also an important component of some sustainable horticultural crop rotations, and trends in grain use are a good indicator of farm management in the Lower Fraser Valley. This is partly because only a portion of the grain plant is harvested, and grain leaves a crop residue that is rich in organic matter. More importantly, however, the goal of good crop rotation is to use a diversity of crops, so that farmers do not plant crops that require intensive cultivation every year (which damages soil structure) and to avoid pest build-ups. Although data are not readily available pre-1990s, grain acreages have declined in the Lower Fraser Valley The Ecologies of Scale Evan D. G . Fraser 37 in recent decades even though this region boasts very high yields (table 3-3). 2 1 As a result, in this area, grain represents a different kind of crop that should be incorporated into a good crop rotation. O n the prairies, where grain monocultures dominate, these crops would not be an indicator of sustainable farming. 2 0 This decline is probably due to a combination of (1) economies of scale and (2) government programmes. These factors favour grain production in the prairies. The Ecologies of Scale Evan D. G . Fraser 38 Table 3-3 Hectares of grain in Delta, B.C. between 1996 - 1999. Year Total Grain (ha) Total Al l Crops (ha) % Gra in 1996 444.56 2146.63 21 1997 301.44 2285.82 13 1998 339.84 2271.25 15 1999 257.93 2136.59 12 Source: based on data from Dr. Bob Vernon, Agriculture and Agrifood Canada, Agassiz, B . C . The Ecologies of Scale Evan D. G . Fraser 39 As this discussion indicates, it is necessary to use a number of different methods to assess whether or not farm diversity leads to farm sustainability. Statistical methods that assess what ecologists call alpha-diversity must be augmented with a more detailed understanding of the role that different crops play in an agro-ecosystem. Combining the relative specialization score proposed here, with a field-by-field and year-by-year assessment of legumes, potatoes, perennial crops, grain and grasslands, provide a holistic approach that allows us to use biodiversity as an indicator of farm sustainability. E C O L O G I C A L C O N C E P T #2: N U T R I E N T C Y C L I N G Another aspect of sustainable agriculture that emerges with regularity in the literature is the concept of nutrient cycling. Ecological systems function because nutrients such as nitrogen and phosphorus cycle between living organisms in the biosphere. As these nutrients often limit plant growth, an indication of a balanced ecosystem is one where there are no major nutrient surpluses or deficits. Nitrogen, for example, is an essential component of plant protein, and is often a limiting factor for plant growth (Purves et al., 1992, p. 1089). Although nitrogen is abundant in the environment, it must be converted into biologically useful forms for plants to be able to uptake it. Only a small number of bacteria, cyanobacteria, and actinomycetes 2 1 can make this conversion (called nitrogen-fixation), and these organisms must change atmospheric nitrogen (N2) into ammonia ( N H 3 ) . Al l known nitrogen fixers are prokaryotes 2 2 but some live in association with specific eukaryotes. 2 3 Some of the most important of these belong to the bacterial genus Rhizobium, where they grow on the root nodules of plants in the legume family (which includes peas, soybeans, beans, and alfalfa) (Purves et al., 1992 p. 1089). Similarly, phosphorus, which most commonly exists as phosphate, is another nutrient that often limits plant growth. Although phosphate is generally found in marine deposits, it enters the terrestrial biosphere at a slow but steady rate through marine upwellings (Purves et al. , 1992 p. 1089). Because of this, phosphate is a component of most fertilizers. If it is over-applied by farmers spreading manure or chemical fertilizer, phosphate may 2 1 Cyanobacteria: "A division of photosynthetic bacteria, formerly referred to as blue-green algae; they lack sexual reproduction, and they use chlorophyll a in their photosynthesis." (Purves et al., 1992 p. 1089) Actinomycetes: Nitrogen-fixing "unicellular filamentous microorganisms that branch monopodially or more rarely dichotomously and form radiating colonies; mainly found in the soil, and cause of its characteristic odour" (Agriculture and Agri-Food Canada, 2001b) 2 2 Prokaryotes: "Organisms whose genetic material is not contained within a nucleaus. The bacteria. Considered an earlier stage in the evolution of life than the eukaryotes" (Purves et al., 1992 p. 1089) 2 3 Eukaryotes: "Organisms whose cells contain their genetic material inside a nucleau. Includes all life except the viruses and the kingdom Monera." (Purves et al., 1992 p. 1089) The Ecologies of Scale Evan D. G . Fraser 40 enter lakes and cause serious environmental problems (Purves et al. , 1992 p. 1089). 2 4 Douglas suggests there are two generic types of nutrient cycling systems that govern these ecological processes (Douglas, 1983, p. 5). The first of these, a "balanced equilibrium," occurs when inputs and outputs of a resource are equal. In this type of cycle, there is no significant change in any nutrient over time. For example, plants absorb carbon in the atmosphere during photosynthesis. Plants in turn provide oxygen for animals to breath. When animals exhale, and when plants decompose, carbon is released into the atmosphere. Since the absorption and release of carbon are matched, the quantity of atmospheric carbon remains stable. 2 5 Similarly, water is cycled through a process of evaporation, transpiration, and precipitation in a continuous loop. The other type of system - a "dynamic equilibrium" - adjusts to a changing environment by matching inputs and outputs (Douglas, 1983, p. 11). Populations of prey and predators represent this sort of system. A n increase in the number of mice, for example, may lead to an increase in the number of foxes. If the mice population then decreases for some reason (such as a lack of food caused by weather conditions) then the number of foxes will also decrease. In this way, the fox population is dependent on the number of mice. According to Douglas, modern society, based around densely populated urban centres, has broken both kinds of cycle (Douglas, 1983, p. 11). Cities take resources from remote areas. As a result, nutrients are not cycled in a continuous and stable way (breaking balanced equilibrium cycles). The concentration of resources in urban areas allows urban populations to grow very large (breaking dynamic equilibrium cycles). Cities expropriate the carrying capacity of remote areas to support concentrated urban populations (Douglas, 1983, p. 11; White, 1994, p, l ) . 2 6 Because cities rely on remote 2 4 This process is known as Eutrophication: "...the addition of nutrient materials to water. Especially in lakes, the subsequent flourishing of algae and microorganisms can result in oxygen depletion and the eventual stifling of life in the water." (Purves et al., 1992 p. G10). This occures becuase phosphate levels usually limit algae growth in undisturbed lakes. Agricultural runoff high in phosphates may, therefore, lead to dramatic algae growth. 2 5 Human activity, which involves burning large amounts of stored carbon in the form of fossil fuel, seems to have upset this balance. 2 6 Carrying Capacity. "The number (or weight) of organisms of a given species and quality (in terms of health) that can survive in a given ecosystem without causing its deterioration, through the least favourable environmental conditions that occur within a stated interval of time. For example, in wildlife management, it indicates the maximum number of organisms that can be supported in a given area of habitat at any given time" (Dunster 8s Dunster, 1996 p. 54). Currently there is a considerable debate regarding the earth's carrying capacity and how it should be calculated (Daly, 1997). Much of this debate centres on the role of the economy and the possibility that technological innovation will allow us to use resources more efficiently (Boserup, 1981; Sagoff, 1997; Simon, 1981). In general, however, it is agreed that the carrying capacity of a species for an area is not fixed, and can fluctuate over the short term depending on conditions (Douglas, 1983; Homer-Dixon, 1999, 2000). The Ecologies of Scale Evan D. G . Fraser 41 resources to maintain massive h u m a n populations, self-regulating cycles of nutrient flows are disrupted over a large area. This creates three problems: (1) we are dependent on non-renewable energy supplies to ship the needed resources to urban areas (Hough, 1995, p. 31). (2) There is a net loss of nutrients in areas where we farm. (3) Because we accumulated so many materials in our cities, we have difficulty disposing of waste (Gliessman, 1998, p. 24). Major agricultural problems found in many regions of the world, including the Fraser River Valley, exhibit these broken cycles. First, farms support geographically distant cities. Second, modern farmers can only achieve economies of scale and be economically efficient by specializing on a very narrow range of crops. Few modern farmers can afford the expensive and highly specialized equipment that would allow them to undertake animal and plant agriculture efficiently. As a result, the waste from livestock produced on highly concentrated operations overwhelms the ability of local ecosystems to absorb manure. These excess nutrients enter the ecosystem, often through the ground water, and can become a serious problem. This is true for livestock farms in the Fraser River valley, where ground-water nitrate levels have risen in recent decades (Schreier et al. , 2000, electronic source). Horticultural production suffers from the opposite problem. Constant cropping reduces organic matter levels in the soil and undermines natural fertility on our farms. These nutrients are replaced with chemical fertilizers, which are cheaper to spread than organic manure. As a result, the broken nutrient cycles, which are a consequence of living in cities, extend to the way we produce food. Berry sums up this situation by suggesting that modern farming has taken a solution and divided it into two problems (Berry, 1977). Resources are drawn away from remote areas, farms lose their natural fertility, and the impact of the city is felt over a m u c h larger area than the space a city directly occupies (Piatt, Rowntree, & Muice, 1994, p. 11; White, 1994). Using nutrient cycling as an indicator of sustainable agriculture As a guiding concept for sustainable agriculture, nutrient cycling is similar to biodiversity. Both are intuitively simply ideas that are widely recognized as strong normative concepts that help explain how ecosystems function. Like biodiversity, nutrient cycling is not an easy concept to apply to agricultural systems. Research done by King illustrates the difficulty of using nutrient cycling as an indicator of sustainable agriculture. Although a farmer who replaces chemical fertilizer with manure that comes from a local source will help to close the on-farm nutrient loop (as the livestock fed on locally-grown grain will not excrete more nutrients than plants can uptake) there is no guarantee that these nutrients will be appropriately managed and not cause water pollution. In other words, although the manure from livestock fed only with locally grown feed should not exceed an area's capacity to handle waste, this does not mean that manure will be stored and applied so that it is available to local crops when they need it or that it will not end u p The Ecologies of Scale Evan D. G . Fraser 42 polluting groundwater (King, 1990, p. 92-93). For example, when animals graze in pasture, manure is not deposited uniformly across the entire field so even livestock fed exclusively with locally-grown grain can cause nutrient pollution. King estimates that it would take ten years of pasture, with an average of 2.5 cattle per ha to cover a whole field with manure (King, 1990, p. 92). This not only leads to poor distribution, but creates a situation where nitrogen is lost very quickly from the system. Nitrogen becomes unavailable for plants by being leached below the root zone, or through a chemical process called de-nitrification. De-nitrification occurs when nitrate is subjected to anaerobic conditions and reduces to oxygen and nitrogen gas that is lost to the atmosphere. The concentration of organic matter deposited in the manure provides an ideal environment for microbial activity, which quickly uses up all available oxygen, and creates the anaerobic conditions that lead to the loss of N (King, 1990, p. 92-93). To minimize this, it is necessary to collect and store animal waste so that it may be composted, and then spread evenly over fields. As a result, closed nutrient cycles on farms are a necessary but not sufficient condition to ensure that excess nitrogen and phosphorus do not become a problem. Similarly, the type of crop that manure is spread onto will also influence whether or not nutrients become a problem. For example, if a farmer spreads manure onto a crop that leaves a large amount of biomass behind after the product has been harvested, then excess nitrogen will still accumulate. This is especially relevant for the Fraser River Valley. Raspberries are the dominant field crop in the parts of the region that focus on poultry. However, raspberries do not take up very m u c h nitrogen relative to grain crops, and most of the nitrogen that is taken from the soil is used by the plant to grow cane or stems of the raspberry plant. These remain on-site after the berries have been harvested. As a result, even though manure from the Lower Fraser Valley is being used on local fields, nitrogen loading is still a problem. Therefore, to use nutrient cycling as an indicator of sustainable agriculture we can start by assessing the quantity of plant-available nitrogen or phosphate that enters and leaves farms or farming regions. We must also evaluate specific management practices to understand if these excess nutrients will cause environmental problems. (Purves et al. , 1992 p. 1089). C O N C L U S I O N The purpose of this chapter was to both explore the relationship between farming and the environment and to show how a researcher might identify and examine sustainable agriculture. Specifically we developed indicators of sustainable agriculture that will help us assess the impact of social and economic forces on farming and the environment in the Lower Fraser Valley. There is a consensus in the literature that sustainable agriculture will emulate natural ecosystems and reduce environmental problems. The two key concepts are nutrient cycling, which refers to how nutrients move through an ecosystem, and biodiversity. Understanding that: The Ecologies of Scale Evan D. G . Fraser 4 3 • nutrients such as nitrogen and phosphorus often limit plant growth, • undisturbed ecosystems usually cycle nutrients efficiently, • if nitrogen and phosphorus are too abundant they cause serious environmental problems, • it is extremely energy-intensive to synthesize chemical nitrogen, we can conclude that any agro-ecosystem that has either a deficit or surplus of these nutrients has been poorly managed. Biodiversity is a more complex concept. Although many high-level national and international policies extol the benefits of biodiversity, there are situations where an increase in the number of species creates problems. As a result, it is necessary to understand the number of species in an area, what those species are, and how they are geographically and temporally arranged. Soil stability, pests, and past management all play a role in determining whether or not increased biodiversity will add to or reduce environmental problems. It is necessary to define what aspect of sustainability is important and then select the most appropriate way of assessing biodiversity. For the purposes of this thesis, we devised a method of measuring biodiversity through using aggregated crops data. This statistic is not a complete indication of sustainable agriculture and must be combined with an assessment of the relative abundance of legumes, grasslands, potatoes, and perennial crops. Together the statistical measure of crop diversity combined with a qualitative assessment of these specific crops provide a strong indicator of sustainable agriculture and will allow us to test the role of global trade, government policy, and land tenure on the landscape. 2 7 2 7 Landscape. "A mosaic of habitat types occupying a spatial scale intermediate between an organism's normal home-range size and its regional distribution." (Dunster & Dunster, 1996 p. 186) The Ecologies of Scale Evan D. G . Fraser 44 CONCLUSION TO PART I: THEORETICAL FRAMEWORK The objective of part I of this thesis was to develop a theoretical framework and the tools with which to assess the impacts of social and economic factors on farming and the environment. To accomplish this task we introduced environmental economics and sustainable agriculture. Sustainable agriculture allows us to describe all ecosystems in the same terms. Whether it is an undisturbed rain forest or a highly managed farm, we can describe all ecosystems using biodiversity and nutrient cycling. This allows us to identify how areas change over time, compare regions, and understand the underlying root causes of environmental problems. To understand the reasons why farmers use poor management we need the tools that the environmental economics literature provides. Environmental economics helps us understand the system of economic incentives that sometimes lead farmers (and other resource managers) to follow management strategies that may be bad for the environment. If the sustainable agriculture literature allows us to see the environmental cause of problems, then environmental economics shows us h u m a n reasons leading to the problem. Illustration 3 - 1 shows how these two literatures work together to help us link social and economic factors such as land tenure, international trade, and government policy with the environment in order to explain the cause of environmental problems in the Lower Fraser River Valley. The Ecologies of Scale Evan D. G . Fraser 45 Figure 3-1 - J o i n i n g the ecosystem approach a n d e n v i r o n m e n t a l e c o n o m i c s l i terature. E c o s y s t e m # 1 (this may be an undisturbed ecosystem) has: • High biodiversity • Closed nutrient cycles The socio-economic system creates incentives through markets, institutions, and government policies. These incentives can be problematic when there are market failures due to externalities and the existence of public goods. E c o s y s t e m #2 (this may be a managed ecosystem like a farm) has : • Low biodiversity • Broken nutrient cycles (i.e. nutrient surpluses or deficits) The Ecologies of Scale Evan D. G . Fraser 46 PART II - POSSIBLE EXPLANATIONS Thus far, this thesis has demonstrated that agriculture causes serious environmental problems around the globe despite the fact that technological solutions are available. In light of this paradox, we hypothesized that social and economic constraints are to blame for this situation and argued that the Lower Fraser Valley in British Columbia is a relevant place to test this hypothesis (chapter one). Before we could test various competing theories about why farms cause environmental problems, we needed a framework that would (1) allow us to describe the environmental problems caused by farms in a systematic way, and (2) link social and economic factors like international trade, government policy, and land tenure with the environment. Chapters two and three established this framework by reviewing the sustainable agriculture literature and the environmental economics literature. It is now time to apply this framework to data from the Lower Fraser Valley. A range of possible explanations are explored in the next section. These explanations allow us to develop specific hypotheses that will then be tested in part three of this thesis. The Ecologies of Scale Evan D. G . Fraser 47 Chapter 4 POSSIBLE EXPLANATIONS INTRODUCTION The objective of this section is to explore the range of existing theories that explain why farms cause environmental problems. Briefly, this thesis explores four theories: 1. Farmers themselves are the root of the problem because they either do not understand the environmental impact of their actions or are unwilling to farm in more responsible fashion. 2. Insecure land tenure raises farmers' discount rates and encourages farmers to adopt a short-term perspective that maximizes the production of private goods and ignores public goods (such as wildlife habitat). This leads to negative environmental management. 3. Increased trade creates incentives for farms to specialize on a narrow range of crops and this leads to environmental problems. There is no agreement in the literature on the effect of trade, however, and many authors argue that increased trade increases the opportunity for farmers to engage in sustainable agriculture. Both sides of this argument will be explored. 2 8 4. The nature of some farm commodities is such that some farm products inherently create incentives for farmers to specialize in a narrow range of crops and this leads to environmental problems. If the first theory is true, and farmers are themselves responsible for the environmental problems their farms create due to negligence or lack of understanding, then the hypothesis of this thesis is false. As a result, this chapter both introduces this idea and applies data to test this explanation. The other three theories are only introduced here. Part three of this thesis applies data from the Lower Fraser Valley to test each one. We explore these theories through two different types of reference material. First, we will draw upon the academic literature to see how the scholarly community perceives these ideas. Second, we will analyse comments made by people inside British Columbia's agriculture and food industry to understand the stakeholder perceptions of these issues. These comments came from hearings held by the British Columbia provincial government in 1999-2000 on the state of the agri-food industry in the province. The mandate of the standing committee that organized these hearings was to understand the different challenges that the agri-food industry in British Columbia is facing, and to draft a provincial policy to < 2 8 A sub-theme that will also be explored is that improvements in transportation and storage have made it possible to provide urban consumers with fresh produce year round. This has resulted in increased competition for the processing industry that many farmers formerly counted on as their primary market. The Ecologies of Scale Evan D. G . Fraser 48 address these challenges. In order to meet this goal, the standing committee identified key stakeholders in the agri-food industry that included farmers, processors, distributors, retailers, civil servants, politicians, academics and other professionals, as well as representatives of relevant non-governmental organizations (NGOs). After identifying the key stakeholders, the standing committee invited presentations from specific individuals who represented the diversity of issues at stake. The standing committee also held hearings across the province of British Columbia, and took out advertisements in local newspapers inviting presentations from the public. This thesis uses the official, verbatim Hansard Transcripts from these hearings to assess what influences the presenters said caused the farm crisis. 2 9 Using the transcripts in this way has both strengths and weaknesses. First, respondents do not represent a random sample, are self-selecting, and may have made presentations to the committee that put their own interests in the best possible light. Consequently, it is questionable whether farmers were critical of their own activities. Nevertheless, this is still a valid method for understanding a variety of perceptions of agriculture in British Columbia. All players with a stake in the future of the province's agricultural economy were actively encouraged to make presentations. As there were numerous groups present with different points of view, it is clear that the standing committee heard from a diverse and well-represented cross-section of B.C.'s agricultural community. For example, senior executives of major retailing stores such as the Real Canadian Superstore as well as members of "anti-corporate" NGOs all presented to the committee. Also, the Standing Committee travelled the length and breadth of British Columbia. It would have also been virtually impossible for a doctoral candidate to do this. In light of the self-selecting nature of the farmers' representations, however, conclusions from the transcripts must be used with caution. They are an excellent source to understand perceptions, develop a broad understanding of the challenges that the industry is facing, and establish basic hypotheses. Even if we cannot assume that the presentations were self-critical, they provide a place where we can start to understand why farming has a negative impact on the environment. Then we must move on to other evidence based on farmers' actions as well as their words. THEORY # 1 A R E N E G L E C T AND IGNORANCE RESPONSIBLE? If the environmental problems that agriculture causes are a result of neglect or a general lack of awareness on the part of farmers, then the hypothesis of this thesis - that the social and economic system creates biases against sustainable farming - is clearly wrong. As a result, it is important to carefully assess data to see if the environmental problems caused by 2 9 These transcripts are available on the World Wide Web at: h t t p : / / w w w . l e g i s . g o v . b c . c a / / C M T / C M T 0 8 / . (Hansard, 1999-2000) Appendix II contains a more detailed discuss ion on the methods used to analyse the transcripts. The Ecologies of Scale Evan D. G. Fraser 49 agriculture are merely due to negligence, ignorance, or a lack of concern by farmers. In order to ascertain whether farmers cause environmental problems, this research posed two questions: (1) do any of the stakeholders (including farmers) blame farmers for using bad environmental management and accuse the farmers of being negligent? (2) do farmers' actions support the claim that they are not the source of the problem? Data from the transcripts To answer the first question, transcripts from the standing committee were analysed to see if any of the stakeholders blamed the farmers. No one did. Instead, the people who presented to the government committee suggested that issues ranging from global trade to governmental policy cause environmental problems. This is extremely important. There were clear differences of opinion on most subjects discussed. For example, some presenters were clearly critical of globalization, corporate power, and the effect of trade. Other presenters came from global corporations and spoke in favour of trade. When it came to discussing farmers, however, there was a consensus that farmers are, in general, conscientious stewards of the land. This point was summarized by the first report of the standing committee: In B.C., agricultural producers and processors have demonstrated a commitment to upholding environmental standards in their farm and production practices... .farmers are, in fact, the original primary stewards of the land and water.... [and] environmentalism is inherent to good farm practices, since farmers, more than any other group, have an unmediated understanding of their dependence on clean water, soil and air. (Select Standing Committee on Agriculture and Fisheries, 2000, electronic source) This report concludes that the provincial government should help promote sound environmental management on farms by replacing environmentally damaging subsidies, such as transportation subsidies, with tax incentives that promote best management practices. Unsurprisingly, farmers themselves argued that they support good management and strive to practice the best environmental stewardship they can. For example, farmers indicated that they understand that their farms provide extremely important wildlife habitat: There are a lot of farmers in this municipality who put in over-wintering crops to protect their soil from erosion. A lot of those crops are also very enticing for migratory birds who make their home here over the winter. (W. Jeske, Municipal Councillor for Delta, B.C., Hansard, December 1st, 1999) We have lots of bear and deer on our property... I think farming and ranching tend to enhance the wildlife, [so] we try to leave as much The Ecologies of Scale Evan D. G. Fraser 50 timber around for windbreaks and moisture-retaining strips and things like that... as far as I'm concerned. I'd rather just see them there— you know, enjoy them. (K. Mitchell, farmer, Hansard, October 25th, 1999). However, farmers were also concerned that they suffer a financial loss when wildlife damages their property, and feel that all residents of B . C . should help cover the cost of this damage since wildlife is a public good: Another issue we had was that wildlife issues are becoming a problem in the area. There is some concern that farmers will not be compensated for crop losses or damages.... there really hasn't been too much done in terms of compensating individual farmers if they receive huge losses or noticeable losses. So it is something we would like government to address. (P. Davidson, Farmer and President of Smithers Farmers Institute, Hansard, October 13th, 1999) We feel that if corrective measures are to be imposed on agricultural lands, be it environmental regulations or labour standards, those costs must be passed on to the consumer or society in general ...[for example] an outright grant to ensure that a "works for society's benefit" becomes society's cost, not a ... land owner's cost. (L. Hunter, farmer, Kamloops-Okanagan Dairymen's Association, Hansard, October, 27th, 1999) Comments made by farmers go beyond the role of wildlife habitat and suggest that good environmental management is a part of farming that government policy must support: ...we feel a forward-looking agriculture policy must address ... the environment. We want the policy to focus the government's resources and efforts in an environmental area ... [since ] it is natural for the B.C. agricultural producers to be stewards of the land. (K. Carlson, farmer, Hansard, November 3rd, 1999). Farmers' behaviour Since farmers were the largest and best represented group at the standing committee, it is not surprising that this process revealed little criticism against farmers. As a result, it is necessary to find data that allow us to test whether farm management practices back up these claims. The Canadian Census supports the position that farmers are not negligent or ignorant. Based on responses in 1991 and 1996, the number of farms in the Lower Fraser Valley using practices to reduce soil erosion (called conservation tillage) rose from 312 in 1991 to 533 in 1996. The number of farms using winter cover crops to prevent soil erosion and nutrient runoff during the wet winter months also increased from 903 to 977 (though this The Ecologies of Scale Evan D. G . Fraser 51 was a slight decline in the proportion of farmers using cover crops). Finally, the number of farmers using some form of crop rotation also rose (Statistics Canada, 1991, 1996). Clearly, however, there is a huge room to improve. Table 4.1, which is drawn from census data used by Schreier et. al. show that only a small fraction of B . C . farmers use these sorts of soil conservation practices. O n the other hand, B . C . farmers have been at the forefront of North American producers since the 1980s in using environmentally sound pest management practices. Almost all greenhouse and tree fruit growers, and a majority of vegetable growers have minimized chemical pest control by using a variety of chemical and non-chemical techniques referred to as "integrated pest management" (Select Standing Committee on Agriculture and Fisheries, 2000, electronic source). The Ecologies of Scale Evan D. G . Fraser 52 Table 4-1 Number o f farms i n the Lower Fraser Va l l ey report ing us ing different so i l conservat ion pract ices i n 1991 a n d 1996. 1991 1996 # of % of # of % of % change farms farms farms farms 1991 -1996 Total number of farms 9974 11000 9 Crop Rotation 726 7.279 1395 12.68 48 Permanent Grass Cover 0 4693 42.66 Na Winter Cover Crops 903 9.054 977 8.882 8 Contour Cultivation 0 162 1.473 Na Grassed Waterways 247 2.245 Na Source: 1991 and 1996 Canadian Census, cited in Schreier et. al. 2000. The Ecologies of Scale Evan D. G . Fraser 53 Another indication that farmers are neither ignorant nor unresponsive to opportunities to improve environmental management is that demand has exceeded funding for a number of government programmes designed to provide incentives for good farm-management. For example, farmers took full advantage of a provincial cost-sharing programme to construct manure storage facilities. This reduces the amount of nutrients leaching into ground water tables. They have also supported the "grassland set aside programme" that pays farmers in Delta to plant perennial grass fields to provide habitat for wildlife and enhance soil health (see chapter five for a complete discussion on this programme). A similar programme pays farmers to plant winter cover crops in the Delta that protect the soil from nutrient loss and erosion during the winter rains. Conclusion to "Negligence and Ignorance" When taken together, data collected, including: • the comments made by farmers; • the conclusion reached by the standing committee; • the widespread use of integrated pest management; • the increase in conservation tillage and crop rotation; and • the manure and grasslands programmes, all suggest that farmers are not ignorant of the environmental problems caused by agriculture and do not neglect the environment when they have an incentive to do otherwise. This is not to say that farmers always make the best environmental decisions, that the comments made by farmers are unbiased, or that there is no role for farmer-education. Rather, the data presented here suggest that farmers are not the sole cause of the environmental problems and that other forces are at work. This important point highlights the difficult task a researcher has in understanding the role of the individual, as a rational and autonomous decision-maker, and how social and economic constraints influence specific behaviour. Scholars in the field of "political ecology" have devoted considerable intellectual energy over recent decades to examining this question (see: Henrich, 1997; Vayda 8B Walters, 1999; Ward, 1993). For example, Henrich presents data from indigenous groups in the Peruvian Amazon that suggest local communities are not "compelled by external forces...but instead are active enthusiastic participants seeking to engage the Western market in order to acquire Western goods..." (1997, p. 319). In contrast, Ward presents evidence that farmers in the West are on a treadmill that "...can best be conceptualized as a set of structural conditions, which have been shaped by international political and economic processes..." (1993, p 349). The purpose of this thesis is not to judge these two positions. Instead, based on the evidence already presented in this chapter, we take the position that farmers, like any other members of society, are faced with a series of choices that are constrained by the social, economic and political circumstances in which they find themselves. It is these constraints that The Ecologies of Scale Evan D. G . Fraser 5 4 become the subject of this thesis, and the remainder of this and the next chapter will explore theories that try to explain what these might be. THEORY #2: LAND TENURE As discussed in chapter one, there are a number of different tenure and land management arrangements in this area, each of which govern the length of time a farmer may work a piece of land. Most of the farmland in the municipality of Delta, at the mouth of the Fraser River, is part of the Agricultural Land Reserve (ALR). Since its inception, the ALR has been controversial because it curtails landowners' rights to develop their land. The ALR was seen by many who presented to the Standing Committee as a draconian measure that has hamstrung farmers' ability to make a living ever since: ...when we as a society created the agricultural land reserve, we basically said right then to anybody who owns farmland: "You are a farmer whether you want to be or not, whether you can make any money at it or not.".... If society is going to insist that certain lands be used only for agriculture, then society should carry some responsibility to ensure that the people who own that land can in fact make a living by farming it. (B. Goodacre, standing committee member, Hansard, September 19th, 1999). Farmers complain that the ALR has reduced the value of the land since it prohibits non-agricultural development. This is especially significant since land is the most valuable asset most farmers own. The value of the land will influence whether a farmer can obtain credit to invest in their business:3 0 We're watching [non-ALR] land being bought up around us for $3,000 to $5,000 an acre, but we can't even borrow against our land to do improvements on our place — non-movable, fixed assets like a barn. The land is almost irrelevant. Because it is in the ALR, it is not developable. (P. Christensen, Farmer, Hansard, October 14th 1999j During the standing committee hearings one farmer even went so far as to suggest that: 3 0 Strange, however, shows how high land values in the US during the 1980s led farmers to over-burden themselves with debt that ultimately caused great financial hardship. He argues that, because land tends to appreciate over time, it is attractive to investors who have no interest in its value as productive farmland. As a result, any investor may choose to acquire land as a hedge against inflation, as an investment that they expect to gain in value over time, or as a tax shelter. This additional demand for land pushed prices up even further, creating the illusion that real land values were rising rapidly. In the 1980s, in parts of the US, the high apparent return on farmland drew even more speculators, which for a time drove land values up even higher. Predictably, this bubble burst eventually, leaving farmers, who had mortgaged their farms to invest in additional land, with excessive mortgages (Strange, 1988). The Ecologies of Scale Evan D. G. Fraser 55 ...there are two types of farmers. There are rich farmers outside the agricultural land reserve, and then there are poor farmers that are tied to [it].... The only asset a farmer ever has in his whole lifetime as a farmer is his land. When you take away his land, you've taken away his manoeuvrability with the financial institutions; you've taken away any way for him to manoeuvre and make capital fixed improvements or change commodities or whatever is necessary to keep agriculture viable.... (A. Clarke, Orchardist, Hansard, October 27th, 1999) The second major land tenure arrangement in the Fraser Valley is that the provincial government is a major agricultural landowner in Delta. In 1968, the Government led by Premier W. A. C . Bennett expropriated 1641 h a in Delta. It was expected that this land would be developed by industry to support the adjacent government-run coal port. However, the port never attracted the expected industrial development and this land has remained farmed by tenant farmers ever since. In recent years some of the land has been sold back to farmers, though sales have stopped because all crown land in this area is being claimed under the Tsawwasen first nations land claim. Based on the 1996 Census of Agriculture, 42 per cent of the farmland in Delta was owner-operated, 36 per cent was private land leased to farmers, and 23 per cent was provincial land leased to farmers. According to the Municipality of Delta's report on agriculture, 44 per cent of the rented land was on year-to-year leases, while 31 per cent is on long-term leases of 10 or more years. The literature agrees with the stakeholders who express concern that these arrangements will affect how a farmer manages the land. Gills et. al. suggest that these sort of arrangements can have a major impact on farm productivity as "...an individual proprietor who owns land knows that increased effort or skill that leads to a rise in output will also improve income..." (Gills, et. al. 1992 p. 494). Strange, summarizing the literature on the effect of absentee landlordism, cites MacCannel l : Everyone who has done careful research on farm size, residency of agricultural landowners and social conditions in the rural community finds the same relationship: as farm size and absentee ownership increase, social conditions in the local community deteriorate (MacCannell in Strange, 1988 p. 87) Panayotou considers that insecure or incomplete tenure might lead to market failure since the government has not provided the foundations for the capitalist market to operate (Panayotou, 1993, p. 2 & 27). He points out that all resource managers, which includes forestry companies, fishers, and miners as well as farmers, need properly defined property rights that guarantee them secure and exclusive access to a resource. It is also important that resource managers are able to transfer their tenure to other users in order to create incentives to conserve the resource for future generations. The Ecologies of Scale Evan D. G . Fraser 56 Insecure land tenure relates to the environment by increasing the discount rate that farmers use when deciding how to manage the land. Farmers who need to pay annual rent on land, must always plant cash crops, and will never establish grasslands that provide no cash return. Similarly, farmers who do not own their land will not invest in costly, but environmentally beneficial, land improvements like laser levelling and subsoil drainage. Thus , insecure land tenure destroys incentives to engage in soil conservation and creates incentives to maximize short-term profits at the expense of sustainability. 3 1 Ervin supports this argument by showing that erosion rates for owner-operated cropland is m u c h lower than rented cropland (Ervin, 1982 p. 285-88). Although Wilson agrees, he stresses that farmers do not need to own their land to have secure land tenure (Wilson, 1990 p. 76, 86). He argues that a shift has occurred during last century. In previous generations, land ownership was a central goal for many Canadian farmers. Today, however, investing in equipment is often a better way to spend resources. Wilson cites the Saskatchewan Wheat Pool, the National Farmers Union, and the New Democratic Party who all favour a system of "...public land banking with an option for farmer purchase" where farmers would be able to work towards owning land that they have been working on long-term leases (Wilson, 1990 p. 76, 86). Such a system would give farmers secure and long-term tenure (and the incentives to invest in soil conservation) without requiring huge down payments for land ownership. The key is to ensure that farmers can make a long-term commitment to a specific piece of l a n d . 3 2 3 1 This is sometimes called "mining the soil" where a farmer draws down the natural fertility of the soil by planting successive years of cash crops because they may not have access to that field in the future (Delta, 1992, p. 18). 3 2 Schultz suggests another alternative that is beyond the scope of this thesis to explore in detail. He points out that farmland is less valuable in industrialized nations than it is in poorer parts of the world. According to Schultz, as an agricultural system becomes more technologically advanced the relative importance of the land diminishes, while the importance of technology and farmer know-how increases (Schultz, 1953). In North America and Europe, for example, land is no longer the limiting factor in economic progress in the farming industry. This is what he would call a "low food drain" society that is characterized by a high degree of technological advancement, and a low population to arable land ratio. In such "modern" societies (the U.S. and Canada, for example), only 12 per cent of national income is spent on food and only 20 per cent of this pays for land. According to Schultz' calculations, in the 1950s North American society only invested 2.5 per cent of its aggregate income in agricultural land (Schultz, 1953). By contrast, in a "high food drain society" (one that has little technology and a large population to land ratio), as much as 75 per cent of the nation's income can be spent on food. In many such situations the value of the agricultural land represents 1/3 of the value of food. Consequently, in this situation, 25 per cent of a nation's gross income is devoted to agricultural land. This represents a massive investment of resources and provides an extremely strong incentive to conserve that resource (Schultz, 1953). Given this situation, Schultz concludes that, agricultural land is less important now than it was in the past in North America. He suggests, therefore, that there are more incentives to conserve the soil in the non-industrialized world than in Canada, the US or Europe. The Ecologies of Scale Evan D. G . Fraser 57 Since the Lower Fraser Val ley has a number of different l and tenure arrangements, we would expect to see different types of farm management on rented versus owned land . As a result, we can establ ish specific hypotheses about the effect of l and tenure to see what impact it has on the environment. If insecure l and tenure increases impl ic i t d iscount rates, then we expect that l and farmed through short- term arrangements wou ld maximize short- term profitability at the expense of long-term sustainabi l i ty . Based on the d i scuss ion of the environmental impact of specific crops (chapter three) we hypothesize that rented l and w i l l have: • more a n n u a l species, i nc lud ing more potatoes; • less legumes; • less grain; and • less g rass lands . 3 3 If th is is the case then there is a clear indica t ion that farmers face a h igh d iscount rate and compromise biodiversity by p lan t ing only those species that offer an immediate f inancial re turn. Subsequent chapters present data to test this hypothesis. THEORY #3: T H E IMPACT OF GLOBAL TRADE The next theory we w i l l tackle is the effect of global trade on farm sustainabi l i ty . There is no agreement on the impact of globalization either i n the academic literature or i n the stakeholder comments . For example, some scholars argue that more agr icul tura l trade and less government intervention has the potential to benefit the environment and society (Anderson 8B Strutt , 1996; J o h n s o n , 1991). Others posit that this is a recipe for disaster (Altieri, 1990; Berry , 1987; Bomford, 1998 /9 ; B . Kneen, 1999; Ri tchie , 1993, 1998; Shiva , 1993). There is a need to develop specific and testable hypotheses about how trade w i l l affect the environment and apply empir ica l data to this problem. To accompl i sh this objective we wi l l : 1. Present two arguments that suggest trade leads to better environmental management. 2. Present arguments that suggest trade leads to worse environmental management and that government regulations are required to encourage sustainable agricul ture. 3. Use these competing theories to develop hypotheses. Pro-trade argument # 1: Increased trade promotes biodiversity Pierce (1993) suggests that certain government programmes s u c h as product ion subsidies , price supports , import-export barriers, and supply 3 3 To recap the discussion in chapter three, while annual crops provide yearly cash return, they require constant cultivation (which leads to compaction and drainage problems) and decrease organic matter. Legumes are an important part of a sustainable crop rotation because they fix nitrogen, generally the most limiting soil nutrient. Grain leaves a crop residue after harvest that helps build organic matter. Grasslands, which provide no financial return to farmers, are a vital component of good management because they reduce compaction, build soil organic matter and prevent erosion. The Ecologies of Scale E v a n D . G . Fraser 58 management stand in the way of trade, support farm income, and reduce biodiversity. According to Pierce, government regulations promote on-farm specialization because they influence farmers to plant crops supported by the government rather than crops that are ecologically suited to their farms or demanded by the market (Pierce, 1993, p. 386). These programmes, which are designed to promote rural stability by guaranteeing a farmer's income, take considerable risk out of farming and encourage farmers to plant monocultures with a high economic return. In this way, taxpayers create incentives for poor environmental management on farms. According to Pierce, if these supports were lowered, farmers would find other ways of averting risk, for example, by planting a wider diversity of crops to ensure that they were protected against pest outbreaks, crop failure, and low market prices for particular commodities (Pierce, 1993, p. 385-7). Some of the stakeholders echoed this opinion, arguing that if governments provide direct financial support to farmers they create a false sense of security that stands in the way of change. Unfettered, the market will send price signals to farmers and producers that they must change their practices and develop the products that consumers demand. Government support obscures these signals, allowing producers to continue to make products that the market does not want. Following this logic, the best way to help farmers adapt and thrive in today's market is to remove support so that farmers see the need to innovate: There's such a high degree of regulation, farmers and producers may get this false sense of security that they have this blanket that keeps saying: "If you keep doing what you've always done, we're going to keep paying you an ever-increasing amount of money, and the taxpayer is going to bear it." (A. Campbell, vice-president of fresh operations for Thrifty Foods, Vancouver Island, Hansard, February 3rd, 2000) According to Bradshaw and Smit (1999), this point of view represents the predominant "neo-classical" position that a reduction in over-all support for agriculture will lead to efficient resource allocation, reduced pollution, and minimized land degradation (Bradshaw & Smit, 1999, p. 1-4). Anderson and Strutt (1996) back this up. They argue that there is a strong correlation between government production subsidies and input use on farms. Based on this observation, they conclude that reduced subsidies will lead to a drop in agri-chemical inputs and an increase in environmental sustainability (Anderson & Strutt, 1996, p. 151-172). Anderson and Strutt also conclude that a complete removal of agricultural subsidies will result in a reduction of grain production in Europe and North America and a commensurate increase in the developing world. Because farms in the developed world are more input-dependent, the authors argue that this should result in an overall improvement in global environmental management (Anderson & Strutt, 1996, p. 151-172). The Ecologies of Scale Evan D. G . Fraser 59 According to the same analysis, a reduction in livestock subsidies would also lead to a reorganization of the global livestock market, away from densely populated countries and into more sparsely populated regions where there is more land available for pasture (Anderson 8B Strutt, 1996, p. 160). This would create a number of results. First, more livestock would be fed on pasture. Second, there would be less demand for livestock feed that is typically input demanding and needs to be shipped long distances. Third, livestock would be reared less intensively and at lower densities. Consequently, each animal would be individually less valuable and less prone to disease because they would be raised in the open rather than in extremely expensive and densely packed barns. As a result, Anderson and Strutt conclude that veterinary costs would drop, and there would be less need to add antibiotics and hormones to feed (Anderson 8B Strutt, 1996, p. 161). Ervin (1997) reviews a number of studies that have tried to model the impact of reduced subsidies on the environment. Some studies do indeed show that a reduction in subsidy leads to a reduction of pesticide use in the United States. Other environmental benefits include the conversion of erosion-prone land to pasture and a reduction in water use for irrigation. Other studies, however, show exactly the opposite trend, and conclude that a reduction in US / European Union farm support would actually lead to increased food production, more input use and a greater reliance on irrigation (Ervin, 1997, p. 7-16). According to Ervin, New Zealand provides some interesting examples of these forces (Ervin, 1997, p. 27-28). Confirming Anderson and Strutt's hypothesis that fertilizer use will fall after the removal of subsidies, phosphate fertilizer, pesticide use, and the conversion of marginal lands into pastures did fall in the 1980s when agricultural support was reduced. This, however, was restricted to the sheep industry. For New Zealand's horticultural producers, input use increased and many farmers switched to poorer land management practices in response to a drop in income (Ervin, 1997, p. 28). In summary, authors who support trade argue that farmers will be more aware of ecological limits if they cannot rely on government programmes to protect them. 3 4 Consequently, farmers should diversify their operations and this will have environmental benefits. 3 4 Arrow et. al. point out that although trade agreements such as NAFTA and the WTO include side agreements about the environment (NAFTA established the Montreal-based Council for Environmental Cooperation that is supposed to oversee the effects of trade on the environment in Canada, Mexico and the US), generally these concerns are tangential. There is an implicit assumption that economic growth will be good for the environment. Although at an early stage of economic development there will be some environmental degradation (as virgin stocks are utilized and pollution is created) this should stabilize and diminish after time as people become rich enough to demand better environmental services (Arrow et al., 1995). However, Jacobs and Panayotou both conclude that, in general, trade and economic growth are neither good nor bad for the environment in and of themselves (Jacobs, 1993; Panayotou, 1993). As Jacobs puts it, the invisible hand can bring prosperity but an invisible elbow can bring problems (Jacobs, 1993). Trade and economic growth can increase or The Ecologies of Scale Evan D. G. Fraser 60 Pro-trade argument #2: Trade increases demand for better environmental services. Another pro-trade theme that r uns through some of the academic l i terature is that trade and envi ronmenta l management shou ld reinforce one another (Erv in, 1997). Trade is supposed to lead to higher incomes that al low people the freedom to demand better env i ronmenta l services. Anderson and Strut t , amongst the strongest proponents of th is view, argue that the single most effective strategy for ra is ing envi ronmenta l s tandards is to use trade to increase incomes (Anderson 8B Strut t , 1996). Echo ing th is point, Tweeden and A m p o n s a h argue that smal l farmers do not invest i n soi l conservat ion strategies because they are poor (Tweeden 8B A m p o n s a h , 1998) . 3 5 There are two inter-related components to this argument. F i rs t , trade leads to higher farm incomes, wh ich may make it possible for a farmer to afford more cost ly management pract ices that are good for the envi ronment (however, if increased income is a resul t of an env i ronmenta l external i ty, then income wi l l not provide an incentive for better management). Th is increases a farmer's abi l i ty to internal ise env i ronmenta l problems. Second, increased consumer income creates the demand for food that has been produced wi th h igh env i ronmenta l s tandards. Th is demand rewards farmers for in terna l is ing env i ronmenta l costs because environmental ly-benef ic ia l produce commands a p rem ium at the supermarket . B radshaw and Smi t review the l i terature on what happens to the price of commodi t ies (and, therefore, to farm-income) i n a free trade or de-regulated t rad ing environment. Under systems of government protect ion, as was establ ished i n Europe after Wor ld War II, governments can ma in ta in stable pr ices for farmers through impos ing import and export barr iers (Bradshaw 8B Smi t , 1999). B radshaw and Smi t suggest that once trade barr iers fal l , pr ices become more volati le and capi tal ist markets wi l l cause shor t - term bus iness cycles to increase both i n ampl i tude and in frequency. B radshaw a n d Smi t decrease independent of specific environmental problems. For example, between 1973 and 1986 the US economy grew considerably, yet energy consumption remained flat (Sagoff, 1997, p. 48-61). In this case, increased economic growth did not translate into higher energy use and associated environmental problems. As a result, it is necessary to examine what conditions these forces create and how they translate into environmental management on the ground. 3 5 Alternatively, others suggest that poor farmers will be unable to afford costly inputs like fertilizer and pesticides and will farm more ecologically in order to avoid serious pest outbreaks. For example, D'Sousa et. al. (1998) suggest that small farmers are more likely to invest in soil conservation because they are more directly dependent on the health of their fields to survive year to year (D'Souza, Ikerd, & Kemmet, 1998; Tweeden & Amponsah, 1998). Corky Evans, then Minister of Agriculture for British Columbia, has contributed to this debate by arguing that poor farmers in B.C. cannot afford expensive inputs so are forced to become more ecological: ... we've got people on Vancouver Island, who ten years ago used to spray to get rid of the clover, because they thought that made lousy hay. Now they grow the clover because they can't afford fertilizer. They're too broke [to afford the inputs]... (Hon. C. Evans, Minister for Agriculture and Food, Hansard, June 15th 1999) The Ecologies of Scale E v a n D. G . Fraser 61 conclude that this results in income insecurity and reduces farmers' planning horizons. When farmers are insecure, they use short-term agricultural management and use the environment as a sort of resource bank when prices drop (Bradshaw & Smit, 1999). As a result, these authors suggest that deregulating the trade of agricultural commodities can present a barrier to environmental stewardship. While many authors agree that price volatility can reduce a farmer's income and planning horizon and thus hurt environmental stewardship, many disagree with Bradshaw and Smit about the cause of price volatility (Barichello, 2001, personal communication). For example, the "law of big numbers" stipulates that if a large amount of a commodity trades over a large geographic area then the market should stay relatively stable. Conversely, if only a small amount of a product is traded, or if the geographic range of the market is restricted, then prices could swing widely. For example, if there is only a local market for corn, and there are no imports or exports, then either extreme weather or a large buyer or seller could have a serious effect on the supply and demand for corn. However, if the corn market extends around the world, an extreme event like a drought in one area should only have a limited impact on the traded world price. This logic is especially important for primary commodities where demand is inelastic. Johnson (1991) illustrates this point by arguing that governmental programmes lead to the overproduction of supported commodities, and that this depresses prices, costs taxpayers, and distorts trade (Johnson, 1991, p. 9). Johnson concludes that the policies that Western governments have followed to support farm income create a dependence on government money and promote overproduction that creates greater price swings on the international market. This leads to greater inefficiencies in the system than if the market was allowed to work unfettered (Johnson, 1991, p. 32-34). In this view, trade will lead to the most efficient production system and consumer demand will create incentives for good environmental management. The stakeholders contributed to this debate and often referred to the fact that some consumers are very concerned about how their food is produced. Farmers expressed the belief that although many consumers demand the low-priced produce offered by the major grocery chains, there are new opportunities to market environmentally-beneficial products, thus capitalizing on new niche markets that have developed over recent years: We're facing two simultaneous and increasing pressures right now worldwide and certainly here in British Columbia. One is for increased food production. The other is environmental protection. (M. Winston, Department of Biological Sciences, Simon Fraser University Hansard, December 2nd, 1999) I think that for many years, if we look at British Columbia, there have been three or four large retail chains that have controlled the grocery dollar.... But I think, in a province and a country where we value freedom of choice, the consumer is the one that's going to The Ecologies of Scale Evan D. G . Fraser 6 2 make the decision ultimately. On the one hand, people say that they don't like big-box stores, huge grocery stores or the loss leaders on milk, etc., because it hurts local economies. At the same time, people vote with their feet when they go and buy in those stores. (J. van Dongen, Committee Member and MLA for Abbotsford, Hansard, October 13th, 1999). People are very concerned about what they're consuming. That concern's going to continue; that's not going to disappear. So I think if we get on the leading edge - and we already are. . . . By nature, we already have the cleanest fruit, so we just have to make sure that we stay in that front. I think my main point is that although we're already the cleanest producers in North America, we are not capitalizing on that. (J. Cardoso, farmer, Hansard, November 3rd, 1999). To sell these premium products, however, consumers must be educated so that they are willing to spend extra on locally produced food: If we can't educate the consumer to see that there's a difference between a tomato produced here and one from Mexico or a chicken piece from here and one from Georgia, we're not going to make it. This is a race to the bottom, and we're going to lose (B. Warner, British Columbia Ministry of Agriculture and Food, Hansard, June 15th, 1999) One industry group disagreed that niche markets will ever provide an answer to B.C. 's farm problems. Simply put, this presenter argues that B . C . produces such a large volume of food during the summer that it would be impossible to find new specialty markets for all this produce given our preference for year-round fresh produce: We produced four or five million pounds of fruit a year, which we sold in a 90-day period. You don't sell that at farmers' markets. You distribute that all over North America, wherever you can. Farmers' markets [and other niche markets] are nice.... But realistically, they are a very small portion of the food distribution system in this province and in this country. (M. Driediger, B. C. Vegetable Marketing Association, Hansard, December 1st, 1999) Most stakeholders agreed that while consumer demand and globalization are helping low-cost food retailers expand, there is an increasing opportunity for local farmers to develop niche markets for environmentally conscious consumers. In summary, some academic literature suggests trade will benefit the environment. This is because, government support creates incentives for farmers to specialize on those crops that fall under government programmes even if this specialization creates environmental problems. The Ecologies of Scale Evan D. G . Fraser 63 Anti-trade arguments: Government regulation is needed to help farmers protect the environment Contrary to the arguments just raised, many stakeholders expressed serious concerns about the effect of global trade on provincial agriculture: I feel that, like a cancer, agribusiness corporations are spreading their unsustainable, real wealth-destroying agribusinesses around the world, displacing subsistence peoples and making a few people vulgarly rich while the majority see their life conditions worsen. (M. Cloud, Hansard, October 13th, 1999). Any community that is unable to provide its own food needs is phenomenally vulnerable to outside forces and disruptions in food supply. For example, the snowstorms of the winter of '97-98 shut down transportation into the Kootenays for a while. That is a fundamental threat to human existence. (A. Brynne, research and resources coordinator of the Christopher Spicer Centre for Sustainable Agriculture and Rural Life, Hansard, November 4th, 1999). Others suggested that global trade makes it impossible for them to compete with agricultural regions like California, where farmers enjoy a 12 month growing season, or even Washington State that has m u c h wider valleys that are naturally more suited to large-scale agriculture: The Fraser Valley ... is four miles across at its narrow point, and I would argue that you cannot compete with valleys that are 40 miles across within a 300-mile haul in pretty much the same ecosystem if straight price alone is the issue. (Hon. C. Evans, Minister of Agriculture and Food, Hansard, January 26th, 2000). Stakeholders were also concerned that trade has led to a decline in the processing industry, which has further eroded their ability to compete. The processing sector is what we refer to as the canary in the mineshaft. It's a sector that depends on large volumes and low input costs, and it survives on the smallest of margins of any sector within the industry. As the processors leave, there goes the acreage that's needed to be produced to support it. Here in B. C. we have seen the loss of... 11 processing plants in the last ten years, five of those in the vegetable sector alone. The plants that you see before you have taken away 1,500 direct jobs with them.... (M. Driediger, B. C. Vegetable Marketing Commission, Hansard, December 1st, 1999) This is especially important as local processors provide an immediate market for producers. In addition, only a proportion of any fruit or vegetable crop is suitable for fresh sale. The remainder may be slightly blemished or bruised, and not marketable directly. The processing industry makes use of The Ecologies of Scale Evan D. G . Fraser 64 these seconds and provides farmers with a return for a larger proportion of each crop. Consequently, the stakeholders worry that, because of environmental constraints, B . C . cannot produce year-round crops at the same cost as California, and the food processing industry has relocated to more favourable regions: One ... farmer said [to me]: "We had four canneries in this area years ago. We had fields of tomatoes and apple orchards, and now with the global economy, etc., we don't have any of that anymore." They've all closed down, because we've got, you know, the supermarkets. It's just more difficult for those types of businesses to stay in business, and they've basically shut down. (L. Kalina, Chair, Kamloops Food Policy Council, Hansard, October 26th, 1999) Our potato and vegetable processing industry this year, in 1999, is down at 6,500 acres. At the start of this decade it was well over 10,000. At one point, when the Free Trade Agreement was signed, it was around 15,000 acres. But since that agreement was signed, it's continued to decline. It has now stabilized for the past few years around the 6,000-acre to 7,000-acre mark and around $12 million in farm-gate value (M. Driediger, B.C. Vegetable Marketing Commission, Hansard, December 1st, 1999). According to the stakeholders, global trade has facilitated this process, as it has allowed large companies to purchase commodities around the world and ignore the contribution that local farms make to the environment and the economy: The prices are well controlled there by individuals such as Safeway that say: "We're not going to pay you $22 for a case of long English cucumbers. We can get them from Ontario for 66 cents apiece...." What are we going to do? Are we going to keep them at a dollar or a dollar and a half when they can get them from Ontario for 66 cents? (N.Butler, Farmer, Hansard, October 27th, 1999) I don't know, but our market is shrinking all the time. We can't compete in B.C. anymore. We're in the meat business, and we've had no support over the last 15 years from the government. [The meat packaging industry] was bought and paid for and taken to Alberta, and the provincial government sat by and let it disappear. We're one of the only meat plants left, and there's a threat that we're going to close (V.Baird, B.C. Association of Cattle Feeders, Hansard, December 1st, 1999) It must be noted, however, that representatives of the major retailers in the province feel that they are supporting local produce: The Ecologies of Scale Evan D. G . Fraser 65 J think that in the last three years our company has done more than we've done in the last 20 years in terms of trying to deal with local small producers. That has caused us a fair amount of challenges. I mean, it's not easy, because you're dealing with a whole range of people. We've been travelling around ... B.C. ... trying to deal with local producers to get more of their product into our Superstores and Extra Foods stores. (D. Ryzebolfrom Westfair Foods, the Real Canadian Superstore, Extra Foods, the Real Canadian Wholesale Club and Weston grocers, Hansard, February 3rd, 2000). Furthermore, even Canada's retailing giants worry that they will be unable to compete with their American counterparts: We're also competing now with other non-traditional food retailers. It used to be that we competed just with Thrifty's. We now compete with Esso; we now compete with Canadian Tire. Wal-Mart's announcement, a couple of years ago now, that they are getting into the food business is going to change the face of our industry fundamentally over the next little while. (D. Kinsey, Overwaitea Food Group, Hansard, February 1st, 2000) When it comes to applying these criticisms about trade to the environment, some authors argue that increased agricultural trade has allowed farms to become very large and specialize on environmentally fragile monocultures (Kneen, 1999; Shiva, 1993). There are two reasons for this: First, environmental problems are externalities. Hence, since global trade increases the level of competition, firms that compete across a wide area must cut all possible costs. One way this happens is by ignoring environmental problems. Second, trade allows farms to specialize on specific products to achieve economies of scale. The main reason for this is that trade allows regions to focus on producing only those commodities that they are naturally suited to grow. This rests on theory of comparative advantage that states: Nations with different endowments of capital, labour, and natural resources will gain by specializing in those areas where their relative costs of production are low and importing in those areas where their relative costs are high. Further, the greater the difference in endowments between countries ... the greater these gains from trade are likely to be. (Gillis, Perkins, Roemer, & Snodgrass, 1992 p. 30) Scholars who use comparative advantage argue that farms should specialize on those crops that they are naturally suited to grow. For example, if one farm can produce tomatoes better than a second farm that produces corn more efficiently, then these farms should specialize on the crops that each suited to produce and trade with each other. Since the Lower Fraser Valley is unsuited to growing wheat on a large commercial scale (despite holding the Canadian record for the highest yield per ha), it is far more The Ecologies of Scale Evan D. G . Fraser 66 efficient to purchase our wheat from the prairies than it is to produce grains locally. McCal la and Josling point out that trade facilitates this process and allows the economies in different regions to grow as "...countries shift production to reflect their comparative advantage" (McCalla 8B Josling, 1985 p. 100). There are three economic implications of this theory: (1) all countries can increase their income through trading, 3 6 (2) the smaller the country (or region), the greater the potential gain from trade, and (3) a country will gain the most if it exports commodities that use resources that are abundant and imports commodities that use resources that are scarce (Gillis et al. , 1992 p. 414). From an environmental perspective, there are also a number of implications. First, as discussed in chapters two and three, natural ecosystems flourish because they are diverse and combine organisms with a variety of different needs. To ensure that nutrients neither accumulate and cause pollution, nor dwindle and cause shortages, it is necessary to integrate plant and animal agriculture in the same region. Similarly, to ensure that pests and predators do not build up to epidemic levels it is necessary to plant a diversity of species. Farmers who only raise livestock confront the problem of disposing of animal waste. O n mixed animal and plant farms the farmer can use the manure to fertilize horticultural fields. Farmers who have focused on livestock do not have this opportunity and may over-fertilize the land they have access to (Bomke, 1999, personal correspondence). As a result, Gliessman points out that disposing of animal waste is part of the reason that agriculture is the world's biggest source of water pollution (Gliessman, 1998). International trade, which achieves economic gains through specialization, seems to promote an un-ecological separation of farm 3 6 Following David Ricardo (1772-1823), according to Gillis et. al. the first of these implications is much more subtle than it first appears. To illustrate this they assume that two countries (which they call the US and Mexico) both only produce two products, vegetables and computers, and only use labour to produce these products. Table 1 shows the amount Labour days to Mexico United States produce Vegetable (1 unit) 5 4 Computers (1 unit) 30 20 Relative price (unit of vegetables per computer) 6 5 Table 1. Hypothetical production costs for two commodities in two countries. Despite the fact that the US can produce both commodities more cheaply it is still in each country's best interests to trade because if the US sells one computer to Mexico it can purchase six units of vegetables while the same computer in the US will only buy five units of vegetables. Similarly, Mexico has to produce thirty units of vegetables to buy one domestically produced computer. If it sells its vegetables to the US, however, it can buy computers more cheaply. As a result, incomes in each country are maximized if the US specialized in computers and Mexico in vegetables (Gillis et al., 1992 p. 413-5). The Ecologies of Scale Evan D. G . Fraser 67 commodities. Therefore, there is a conflict between the theoretical foundations that international trade is built on, and the theories of sustainable agriculture we explored in chapter three. The concern over the loss of the processing industry extends this debate further down the food production and distribution chain. Connor and Schiek analyse the spatial distribution of the processing industry and devise three categories for the North American processing industry: demand, supply, and footloose industries. Demand industries generally locate close to their customers because product delivery costs are a high proportion of total costs. This could be because products are perishable or easily damaged (Connor & Schiek, 1997,p. 174). Supply oriented industries locate close to farm producers because their major costs are inputs that are expensive to transport (e.g., fresh seafood and sugar beets easily spoil before processing) (Connor 8B Schiek, 1997 p. 142). According to Connor and Schiek (1997), food processors that use a wide variety of edible inputs, but need expensive packaging tend to be "footloose" in that they will move to wherever they can establish themselves at the lowest cost (Connor 8B Schiek, 1997 p. 188-191). In Connor and Schiek's analysis, these footloose industries include canned and frozen vegetables, which tend to locate where other similar industries are already located since the "cost of alternative locations are most affected by the costs of processing itself, not by material-inputs or product-distribution costs." (Connor 8B Schiek, 1997 p. 189) Processing industries that depend on high-quality produce will locate closer to producers while firms that sell fragile products that spoil quickly, will be located closer to the consumer. This may have serious environmental implication because the processing industry often determines what markets exist for farmers. If farmers depend on selling crops to footloose processors, then they will need to keep costs low and specialize on only those crops the processor demands. Theoretically, this could result in bad environmental management. Winson expresses concern about the economic power of the processing industry and points out that the food and beverage-processing industry in Canada is one of the most concentrated sectors in the country's economy (Winson, 1992, p. 112). Increasingly, large companies are able to use profits generated in one field to subsidize their entrance into another field. They can out-spend their rivals, sustain losses for a long time, and destroy local competition (Winson, 1992 p.115). 3 7 3 7 For example, the coffee retailing war between Proctor and Gamble and General Foods during the early 1980s shows how easily large corporations can undercut small regional enterprises. In competing for market share, these two corporate giants used the profits from their other products to sustain a loss on coffee in the Pittsburgh area. This pushed the price of coffee so low that many small coffee grinders (who relied on the sale of coffee for 100 per cent of their income) went out of business. One Pittsburgh based firm went from 18 per cent of market share in that town to just 1 per cent as their market was eroded by the predatory tactics used by the two major companies. Similarly, another Syracuse-based coffee company ran an 80 per cent loss at this time (Winson, 1992). The Ecologies of Scale Evan D. G . Fraser 68 Companies that can grow large enough to control both food production and the production of inputs can reduce costs and dominate whole sectors of the industry from production to processing, distribution, and retail. This is called "vertical integration." The food sector, like most industries, is comprised of a series of steps, including the producers and distributors of seeds, inputs, and farm equipment. The next step is the farmers themselves. After the farmers come the food and beverage processors, wholesalers, and retailers. Tying all these steps together is the transportation infrastructure, and trucking companies. Increasingly, large North American firms vertically integrate into many of these steps. These firms can exert tremendous control over the cost of inputs and the price that a farmer receives for a crop and may force farmers to adopt poor environmental management in order to reduce costs (Strange, 1988; Winson, 1992). According to Winson, the history of Canada's vegetable canning industry illustrates this process (Winson, 1992,p. 101). In the 1930s, Dominion Syndicate was one of Canada's largest canneries. A shareholder-report from this time indicated that the company's second largest input was cans. The largest input was the vegetables that they put into the cans. Dominion Syndicate entered into an agreement with the American C a n Company to purchase cans exclusively from them for 20 years. In return, Dominion Syndicate received a 15 per cent reduction in the price they paid for the cans. This agreement was so significant that Dominion Syndicate was able to develop a near monopoly in canned vegetables in Ontario. This allowed them to demand low prices from farmers, charge levies for shipping, and issue unfavourable contracts to producers. Farmers tried to boycott, but Dominion Syndicate imported food from the US , purchased farmland close to their canneries, and deprived farmers of the largest market for their produce. In the end, farmers acquiesced and agreed to lower commodity prices. This enabled Dominion Syndicate to reduce the price of the vegetables to just 18 per cent of the final value of the canned goods, and one year reported that they paid more for the cans than what went into them (Winson, 1992, p. 101-102). This is relevant to B . C . , because the stakeholders perceived that the once vibrant food processing industry was dependent on these footloose frozen and canned vegetables. Given the increase in trade, and the economic power of processors, local factories have been able to re-locate to more favourable regions. This has a number of possible environmental consequences. For example, the loss of processing could reduce the market for commodities and hurt farmers financially. This could then result in farmers not being able to afford good environmental management. Fewer processors could mean that there are fewer buyers for farm products. This may force a farmer to specialize on only those crops where they can still find a market and could further reduce biodiversity. 3 8 3 8 Conversely, fewer processors could pay an unexpected environmental dividend. If farmers no longer have access to markets determined by the processors they may start to The Ecologies of Scale Evan D. G . Fraser 69 In summary, according to the critics of trade, since environmental costs are external and trade is based on comparative advantage, then increased trade will result in a deterioration of farm environmental management, as witnessed through a decline in diversity and an increase in nutrient deficits and surpluses. Hypotheses for the effect of trade. Based on these contradictions there is a real need to move beyond the academic literature and the stakeholders' anecdotal comments and empirically test the role of trade and government programmes on the environment. All of the theories presented here, whether they are for or against trade, are limited because they are based on a "...short-run, static view..." of agriculture that arrives at conclusions using aggregate statistics (Ervin, 1997, p. 10). This leads scholars and policy makers to make generalizations about regions and even entire countries, even though environmental conditions change on a m u c h smaller scale. Environmental problems often are local in impact, and are measured at a different magnitude than international trade. While economists usually measure trade at the national or provincial level, soil scientists use data that can vary meter by meter to measure soil quality, and fisheries biologists will test water quality in individual creeks to assess nutrient runoff and water pollution. The situation in the Lower Fraser Valley highlights the need to understand local ecological conditions before trying to apply generalized theories of trade and government policy. At the mouth of the Fraser River, the soils are generally medium textured silt-loams that are prone to compaction and have a high water table. Drainage here is poor, the soil is prone to salination, and the fields in Delta compact easily. This is especially important because this area is used for intensive horticulture. Because of these ecological conditions, intensive horticulture damages soil structure, and contributes to erosion, salination, the loss of organic matter, and compaction. In the central part of the Lower Fraser Valley, the situation is reversed. There, the sandy soils are well drained and resistant to compaction. This means that the soil does not have the natural ability to absorb excess nutrients. Manure from the intensive livestock production drains quickly into the ground water and pollutes local drinking water sources. Further east, the soils again are poorly drained. Here manure collects of the surface and runs off into creeks, streams and drainage ditches. There is a need to bridge the gap between the macro-theories that make predictions about the environmental effect of trade and these local conditions. We will now use these theories on trade and government to establish hypotheses so that we can test their impact on the Lower Fraser Valley. There are two different production regimes in the Lower Fraser Valley. First, the government protects dairy and poultry farms in the Lower Fraser Valley. It experiment with new crops, increasing biological diversity, and explore new niche markets such as for organic production. The Ecologies of Scale Evan D. G . Fraser 70 allocates limited amounts of production quota, and provide guaranteed prices to farmers (for a full discussion of this system, see chapter seven). Second, horticultural farms must compete on m u c h more open terms with internationally produced commodities. Consequently, it is possible to use this region to test how these different regimes affect the environment. If the anti-trade (and pro-government regulation) theories are correct, then we should see a decrease of diversity and other indicators of good management in the parts of this region where farmers compete with international produce. Good management should also be evident where government-protected poultry and dairy farms are concentrated. If the pro-trade (anti-government) theories are correct, any reduction in government programmes will force farmers to become more mindful of the environment because they do not have government programmes to rely on. Consequently, we should witness an increase in diversity over time at the mouth of the Fraser River where farms compete with agricultural goods from around the world. Testing these hypotheses will provide us with a way of assessing the direct impact of new trade regimes on the local environment. The discussion on the processing industry illustrated, however, that it is necessary to look further u p and down the supply chain, in order to see the effect of trade on the entire system. Consequently, we need to investigate the indirect or "second-order" effects of changing trade relationships. This will require two additional investigations. First, we must understand what has happened to the B . C . food and beverage processing industry, and whether this has led to a decline in farm diversity as suggested above. Second, if data show that the stakeholders are correct, and the processing industry has indeed moved to regions where companies can purchase food year-round, we need to understand how this has affected farm-environmental management in the areas that now supply these processors. The hypotheses established above will allow us to test the impact of trade and government regulation on B.C.'s environment. If these forces, however, have a radically different impact on the environment in another region, then it is vital to assess those regions too. THEORY #5: T H E NATURE OF F A R M PRODUCTS The final theory that we will present in this thesis is that some farm commodities are naturally suited to large-scale intensive industrial production - or achieve economies of scale using production methods - that externalise environmental costs . 3 9 Other products are naturally suited to small-scale farms that are integrated into local ecological systems. Industrialized farms intensively produce commodities in a short amount of time. The activities that go into the production of these commodities tend 3 9 Following Kemp, industrialization is a term that has its historic origins in eighteenth century Europe where capital was accumulated, invested in the means of production, lowered unit costs of production, caused a greater division of labour, and increased capital substitution (Kemp, 1989; Kemp, 1993). The Ecologies of Scale Evan D. G . Fraser 71 to be broken into a series of small steps that occur at regular periods and firms invest in machines and specialized labour to aid in particular tasks. Other farms, however, produce slow-maturing commodities that require a greater diversity of tasks to complete. For example, a farmer who produces vegetables typically only obtains one crop per year (though some crops can be planted throughout the summer season to lengthen the harvest period). Vegetable farmers must also respond immediately to changes in the weather, the market, and ecological conditions when deciding to plant, harvest, apply sprays, irrigate, plough or till. These tasks do not suit standardization. As a result, vegetable farmers cannot r u n their farms like an assembly line. Allen and Leuk point out that small errors in timing such tasks as spraying or harvesting vegetables can result in big losses to the farmer. This makes it costly to contract spraying out to workers who specialize in this type of job (Allen & Luek, 2000, p. 13-15). J . S. Mill when writing about the Industrial Revolution commented on this aspect of agriculture: "...[agriculture] is not susceptible of so great a division of occupations, because its different operations cannot possibly be simultaneous. One man cannot always be ploughing, another sowing, and another reaping, (quoted in Allen & Luek, 2000, p. 13) Allen and Leuk suggest a model that helps show what types of farm commodities are naturally produced on Henry Ford-like industrial farms. They observe that when the production cycle is long (i.e. it takes a long time to prepare a product for the market) but there are many short stages within that longer production cycle and there are many risks associated with the production of a commodity, there are few incentives to specialize. In this situation, firms will remain small and fragmented. If, on the other hand, the production cycle is short, there are few risks, and there are few tasks required, then firms grow large enough to specialize on specific aspects of the production cycle. Allen and Leuk suggest that most livestock production has become highly specialized and the firms that are involved have grown very large. In 1997, there were 230 cattle feedlot operators in the U S that averaged 30,983 head of cattle. This represents more than 50 per cent of American cattle production. In contrast, however, cow-calf operations (which inseminates cows and keeps the calf until weaning) are very small and in the U S only averaged 48 head per unit. Cow-calf operations, like horticultural farmers, generally have a one-year production cycle (insemination until weaning or planting until harvest) and require on-the-spot decision making (for example, it is very costly to time when cows give birth in order to standardize this activity). 4 0 As a result, these types of operation do not naturally lend themselves to large-scale enterprise and have stayed small and fragmented. 4 0 To further develop this argument Allen and Leuk point out that the number of tasks that a farmer is involved with have diminished over the last century. During the origins of agriculture in the West, farmers would have collected, stored and selected their own seed. They would have also managed their own inputs, such as fertilizer and fuel (manure and fuel The Ecologies of Scale Evan D. G . Fraser 72 This has implications for the environment. Because of the nature of specific types of commodities, some parts of the farm industry will naturally favour highly specialized farms that are removed from ecological systems. Because of the nature of livestock production, it is possible to specialize on just producing one type of animal production, thus externalising environmental costs by minimizing biodiversity and breaking nutrient cycles. Other commodities, like field crops in the Lower Mainland, do not favour intensive specialization, and are most efficiently produced on small- scale, diversified farms that utilize a great deal of labour. Unfortunately, it is difficult to generate specific hypotheses that are testable in the Lower Fraser Valley to analyse the theory that specialization is a result of the nature of specific farm commodities. Since government programmes protect livestock farms in the Fraser River Valley while horticultural farms must compete with internationally-grown produce it is impossible to isolate the nature of the farm commodity independent from trade or government. As a result, we will have to use this explanation as a way of further exploring and developing the hypotheses about international trade and government programmes as we apply data to test them. wood). Finally, farmers would have processed, marketed and sold their own products. Today, the farmer is only responsible for the biological development of the product. All other tasks and processes have been taken over by highly specialized and economically efficient corporations (Allen 8s Luek, 2000). The Ecologies of Scale Evan D. G . Fraser 7 3 CONCLUSION TO PART II: POSSIBLE EXPLANATIONS The objective of this section was to review possible explanations for the persistence of on-farm environmental problems. The first explanation was that farmers are responsible for degrading the environment either because they are negligent or un-aware of the problem. To address this theory, comments made by farmers and other stakeholders were analysed to see if anyone blamed farmers. No one suggested that farmers are responsible for the problems their farms produce. Instead, the stakeholders suggested a range of possible causes such as global trade and government programmes. According to the Canadian census, farmers' actions back this up, and B . C . farmers use methods to reduce their environmental impact whenever possible. The second theory was that farmers must have secure land tenure before they will invest in long-term management. Farmers who rent their land need to generate yearly cash returns to pay rent. As a result, we hypothesize that rented fields will have less grasslands, grain legumes but more annuals such as potatoes because grasslands and legumes do not provide a direct financial return. We will apply data from the Lower Fraser Valley to this theory in the next section. The third theory introduced in this chapter is that global trade has an effect on sustainable agriculture. There are serious disagreements in the academic literature and in the stakeholder comments about this topic. Briefly, some argue that increased trade leads to better management because (1) government subsidies favour large-scale monocultures and increased trade reduces these subsidies; (2) trade increases incomes that leads to increased demand for better environmental management. Others, however, argue that trade undermines the opportunity for farmers to engage in sustainable agriculture because it allows firms to exploit economies of scale that favour ecologically fragile monocultures. Anti-trade stakeholders and academic scholars also suggest that increased trade has allowed some firms to become very large and dominate the processing industry. This constrains farmers and may lead to bad management. To test the anti-trade /pro-government theories, we hypothesize that we will observe poor management on horticultural farms since these farms compete with international produce. Good management should be evident where government-protected poultry and dairy farms are concentrated. To test the theory that increased trade and reduced government leads to better management we hypothesize that a reduction in government programmes will force farmers to become more mindful of the environment. Consequently, we will witness an increase in diversity in at the west of the Lower Fraser Valley where farms are integrated into the global trade of agricultural goods. The final theory we explored in this chapter is that some farm products are naturally suited to production on large, industrial farms that tend to create negative externalities. We cannot test this explanation by itself, so this theory will help add depth when we analyse data to test the other hypotheses. The Ecologies of Scale Evan D. G . Fraser 74 PART III - ANALYSIS Part I of this thesis established that environmental problems exist on farms despite the fact that we have adequate scientific understanding to address these problems. To understand why this paradox occurs, we developed a conceptual framework to link social and economic factors with indicators of sustainable agriculture. Specifically, this framework uses the ideas of market failure (externalities, discount rates and public goods) to understand social and economic incentives. The sustainable agriculture literature that focuses on nutrient cycling and biodiversity provides the biophysical indicators that show whether or not a farm system has become more or less sustainable. Part II of this thesis began the task of understanding why bad agriculture continues in the face of good science. First, we considered data that strongly illustrate that farmers are not to blame for the environmental problems their farms cause. Instead, insecure land tenure, government programmes, international trade, and the nature of farm commodities are all possible causes of bad environmental management. Part UI will now use data from the Lower Fraser Valley to test these arguments. The Ecologies of Scale Evan D. G. Fraser 75 Chapter 5 T H E R O L E OF LAND TENURE: DATA FROM BRITISH COLUMBIA INTRODUCTION Based on the literature reviewed in the previous section, we hypothesize that unless farmers have secure long-term access to their land they will not farm in a sustainable fashion. Insecure land tenure increases the discount rate a farmer faces, shortens her or his planning horizon, creates an incentive to maximize short-term gain, and discourages long-term sustainability. As a result, we expect farmers who work rented land to plant fewer perennial crops, grasslands, and legumes since all of these crops represent a longer-term investment than is reasonable for fields with a high discount rate. In this chapter, we will explore this explanation using data from the Lower Fraser Valley. D A T A FROM T H E L O W E R F R A S E R V A L L E Y Bomke (1990) analysed the effect of absentee landlordism at the mouth of the Fraser River. In his report, Bomke suggests that although this area is one of Canada's most fertile regions 4 1 it has experienced a decline in soil fertility over the 1970s and 1980s (Bomke & Temple, 1990). Poor drainage, easily compacted soil structure, and declining organic matter levels have caused this loss of fertility. Specifically, Bomke blames short land tenure (Bomke 85 Temple, 1990, p. 2). He points out that long-term improvements such as drainage tiles, laser levelling and forage rotation crops are not possible under the short-term leases offered by the provincial government. To support these conclusions Bomke shows how organic matter on five rented fields in this area has declined since the government expropriated this land (Figure 5-1). By the mid-1990s the provincial government recognized the negative consequence of insecure tenure on soil conservation. A series of newspaper articles in the Vancouver S u n in 1995 reviews the history of the government's deliberations on this subject (Bellett, 1995a, 1995b, 1995c). In 1993, the provincial government under Mike Harcourt promised to offer leases that would ensure farmers had a long-term stake in soil conservation (Bellett, 1995b, p. B2). In 1995, the Vancouver S u n quoted then-minister of Agriculture David Zirnhelt, "We've had a commitment from the premier [to lengthen the terms of] these leases and h e l l deliver." (Bellett, 1995c) Specifically, the government promised to remove the clause that allowed leases to be cancelled within 90 days, and to offer ten and twenty years leases instead of the m u c h more common 1-year leases. This was because "...none of the farmers will invest any money into the property they are 4 1 In 1990 it held the Canadian record for the most amount of wheat grown in a single hectare (13.8 tonnes/ha). The Ecologies of Scale Evan D. G . Fraser 76 renting. They won't ditch it properly, make it level for drainage. They won't practise good stewardship and given these leases there is no reason why they should." (Valerie Roddick, quoted in Bellett, 1995b, p. B2) While this plan did move forward and some of the land has even been sold back to farmers, a large per cent is still farmed under short-term leases since a First Nations land claim has made the future ownership of all crown land in this area uncertain While Bomke's analysis does not provide a comparison with owner-operated fields, it is possible to compare what crops are grown on owner-operated fields versus leased fields in the late 1990s. The data used for this analysis came from work done by Agriculture and Agri-Food Canada. Since the mid-1990s, Dr. Bob Vernon, from the Pacific Agricultural Research Centre at Agassiz British Columbia, has recorded what crops are planted in each of Delta's fields. These data have been entered onto a geo-reference database, and supports his work on integrated pest management. Two different sources provided land tenure data. First, data on crown land and the length of crown leases came from the provincial ministry responsible for administering crown land. Second, Klohn Leonoff Ltd. , a private consulting firm that authored a major report on agriculture in Delta, provided data on leased private land (Klohn Leonoff Ltd. , 1992). By combining crop and land tenure data it was possible to observe differences between rented and owned land and test the hypothesis that rented land will have more annual crops and potatoes but less legumes and grasslands than owned land. Figure 5-2 and 5-3 and table 5-1 show how fields with different types of land tenure have different types of crops planted on them. Results are summarized: • rented fields have more annual crops than owned fields (figure 5-2). • very few fields managed under short-term leases had legumes planted on them between 1996 and 1999. Fields with long-term leases, however, did have legumes 4 2 (figure 5-3). • grasslands occurred most frequently on fields with leases between 6 and 16 years, but less frequently on fields with 1-5 year leases and 16+ year leases (table 5-1). 4 2 As noted in chapter three, not all legumes provide the same degree of soil conservation benefits. Peas and beans offer direct financial return to farmers but leave little in the way of organic matter as a crop residue. Clover, which is planted in set-asides and pastures, does not provide the immediate cash return but leaves considerably more organic matter. However, it was difficult to separate the data in this way, and all legumes were placed into one category. Since cash crop legumes would be planted for short-term gain, this would distort the data, as aggregating all legumes would bias the results towards fields with short leases. As a result, it is likely that if only forage crops were included in this analysis, then the trend would be stronger than the one observed. The Ecologies of Scale Evan D. G . Fraser 77 Figure 5-1 Soil organic matter on Ave fields from the expropriated land in Delta, B.C. between 1971 and 1990. 0) 03 O) • % Organic Matter Sample dates are above bars H % Organic Matter Sampled 1990 Source: Bomke & Temple, 1990 The Ecologies of Scale Evan D. G . Fraser 78 Figure 5-2 Percentage of fields with different land tenure that had potatoes, other annuals, grain, or perennials between 1996 and 1999 in Delta B.C. 60 - T 50 -"D 40 -Ci w= 30 -o 20 -10 -0 -EI owned 1] rented V type of crop Source: Crop data from Dr. Bob Vernon, Agriculture and Agri-Food Canada, Agassiz, B . C . Data on crown land from B . C . Government. Data on private land from Klohn Leonoff Ltd. The Ecologies of Scale Evan D. G . Fraser 79 Figure 5-3 Percentage of fields owned by the government and rented to farmers where legumes were planted between 1996 and 1999 in Delta, B.C. divided by the length of lease for that field. 25 20 (A 2 15 9 10 1-5 6-10 11-15 length of lease in years 16+ Source: Crop data from Dr. Bob Vernon, Agriculture and Agri-Food Canada, Agassiz, B . C . Data on crown land, B . C . government. Data on private land Klohn Leonoff Ltd. The Ecologies of Scale Evan D. G . Fraser 80 Table 5-1 Percentage of fields with different lease lengths that had been planted to grasslands between 1996-1999. Length of Lease % of fields that had been planted to grassland between 1996 and 1999 1-5 years 22% 6-10 61% 11-16 54% 16+ 34% Source: Crop data from Dr. Bob Vernon, Agriculture and Agri-Food Canada, Agassiz, B . C . Data on crown land, B . C . Government. The Ecologies of Scale Evan D. G . Fraser 81 DISCUSSION The first two results are consistent with the hypothesis. A n n u a l crops require continual cultivation (which compacts the finely textured and poorly drained soils that mark this agricultural area), are harvested every year, and leave fields bare in the winter and without a year-round root mass that helps prevent erosion. Consequently, the fact that rented fields have more annuals is what we would expect, since farmers who rent fields will not have incentives to invest in long-term management. Similarly, the fact that fields with long-term leases have more legumes than fields with short-term leases is also consistent with the hypotheses. As reviewed in chapter two, legumes are an important part of crop rotation because they fix atmospheric nitrogen, making it available for future crops but do not provide m u c h financial return to farmers. Again, this is what we expect, since farmers must have long-term tenure to use the best possible agricultural management. The third result, however, is not consistent with the hypothesis. According to the literature, grasslands are a long-term investment that farmers can make in the soil that does not provide immediate financial return. The data, which shows that farmers with short-term leases are just as likely to plant grasslands as farmers with long-term leases, are very surprising and flies in the face of the theory that farmers must own their land before they will invest in soil conservation. In order to explain this anomaly we must see if other incentives might lead a farmer to plant grasslands, despite the fact that they do not have secure land tenure. In 1993, a coalition of farmers and conservationists formed the Delta Farmland and Wildlife Trust (DFWT) to "...provide a forum for implementing creative solutions that ensure habitat is provided for wildlife without causing excessive burdens on farmers within the Fraser delta" (Delta Farmland and Wildlife Trust, 2001 promotional brochure). One of these programmes pays farmers to establish grasslands to provide habitat for raptors and ground dwelling mammals. This gives farmers an "...opportunity to improve soil structure and organic matter, while simultaneously providing habitat for wildlife" (Delta Farmland and Wildlife Trust, 2000, fact sheet). Funded by a number of public and private sources, the D F W T pays farmers to establish a mix of native grasses and clover for one to five years. Farmers are paid $150 per acre per year if they chose to cut the grass for hay or $300 per acre per year if they leave the grass in the field. These grasslands have proven to be excellent habitat for a variety of species; in particular, shrews, deer mice, and voles that are valuable prey for raptors. Waterfowl also use the set-asides during their migration through the area. The D F W T has created a financial value for a public good that overrides the high-discount rate caused by insecure land tenure. According to the discussion on market failure in chapter two, farmland is usually managed to produce private goods (because food is subtractable and excludable it is a private good). It is clear, however, that farmland also provides a number of public goods such as rural amenity value and wildlife habitat. By establishing the grassland setaside programme, D F W T has created a direct The Ecologies of Scale Evan D. G . Fraser 82 financial value for wildlife habitat to farmers. This has the added benefit of enhancing the quality of the land for agriculture since the grassland helps build soil organic matter. This programme, therefore, provides incentives for farmers to manage their fields for both public and private goods. CONCLUSION TO L A N D T E N U R E Based on the analysis of crop data on fields with different land tenure, we conclude that farmers who work under insecure land tenure arrangements face a high discount rate and plant crops that provide only short-term return. Farmers with secure tenure are better at ensuring long-term management and plant crops that help maximize soil conservation and public good such as wildlife habitat. The only anomaly in the data is that grasslands do not vary according to land tenure. A special programme, unique to this area, explains this apparent contradiction. The grassland setaside programme pays farmers to plant grasslands on land regardless of land tenure. This programme provides an example of how a public programme can create incentives for farmers to invest in the public goods their land provides. This also creates incentives to use appropriate environmental management. By paying farmers yearly to establish grasslands, the setaside programme has accomplished three things: (1) it provides an immediate return on what would otherwise be a long-term investment that would normally require secure land tenure to justify. (2) it has created a monetary value for public goods. (3) it provides an opportunity for farmers to provide wildlife habitat at the same time as they improve soil quality. The Ecologies of Scale Evan D. G . Fraser 83 Chapter 6 T H E R O L E O F T R A D E : D A T A F R O M B R I T I S H C O L U M B I A INTRODUCTION The purpose of this chapter is to test the impact of increased trade and reduced government support for agriculture on the environment. In chapter four, we reviewed theories that suggest increased trade and a reduction in government support for farmers will result in better environmental management on farms. According to this theory, if the government does not protect farmers, then farmers will use better environmental management to reduce their vulnerability to weather and market variation and ensure that incomes remain stable. We hypothesize that in situations where trade has increased and government support has decreased, we will witness an increase in on-farm diversity and other indications of good environmental management in the Fraser Valley. A discussion on the processing industry made it clear that, in a global trade environment, it is not sufficient to just focus on the local environment. According to this discussion, changes in diversity may not necessarily be a result of farmers reducing risk, but of farmers responding to changes in the processing industry. If this is the case, it will be necessary to expand our analysis to include the regions that B . C . trades with to see how trade has had an effect on the environment there. First, we will test the hypothesis that increased trade and reduced government programmes lead to better farm management. To accomplish this, we will demonstrate that international trade in agricultural produce has increased and that reduced governmental support has facilitated this change. We will then examine data on farm diversity and nutrient cycling from the Lower Fraser Valley to assess the environmental impact of trade agreements on the local environment. The second objective of this chapter is to test whether any of the changes we observe in farm management are a result of farmers managing risk or due to changes in the processing industry. We will investigate this question in three ways. First, this chapter will present data that show that B.C. 's processing industry has declined. Second, we will analyse crop data to see what role the processing industry plays in determining the diversity of crops that B . C . farmers plant. Third , we will explore the nature of California's horticultural industry to show the impact of trade on one of B.C. 's major horticultural competitors. Changes in trade and trade agreements World trade in agricultural products has risen quickly over recent decades and has increased by 500 per cent since 1970 to more than $200 billion (US) each year (Ervin, 1997, p. 5-6). Since the late 1980s government support for farmers in most industrialized countries has dropped. Although Canada is no exception, and support has declined over the 1990s (figure 6-1), The Ecologies of Scale Evan D. G . Fraser 84 the Canadian government has always funded farmers less than the governments of other industrialized countries (table 6-1). At the beginning of the decade, government support represented 30 per cent of Canadian farm income. By 1998, this was just 15 per cent ( O E C D , 1999 p. 23). Statistics Canada points out that farm support in British Columbia is amongst the lowest of all the provinces and has dropped in the last decade (figure 6-2; Canada , 1999). The Organization for Economic Cooperation and Development (OECD) tracks governmental agricultural programmes. According to O E C D statistics, both the European Union and the U.S. subsidize grain farmers at a m u c h higher rate than the Canadian government (table 6-1, O E C D , 1999 p. 27). In 1998 the European Union paid farmers $60 (Cdn.) for each ton of wheat, $108 (Cdn.) per ton of barley, and $139 (Cdn.) per ton of malt barley (Canada, 1998b). Similarly, the U.S. Department of Agriculture (USDA) has a $320 million (Cdn.) subsidy budget and a $6 billion (Cdn.) "Loan Deficiency Payment Programme." This money helps to set the prices producers receive yet does not have an effect on the price of exports and allows American grain to enter the world market at below production costs (Canada, 1998b, p. 2-3). The Ecologies of Scale Evan D. G . Fraser 85 Figure 6-1 Estimate of Canadian Government farm support in millions of (1998) dollars between 1986 and 1998. c •a O o o o o o © 1986-88 1991-93 1996-98 Year - • - Producter Support Estimate ~»- General Services Total Source: Organization for Economic Cooperation and Development, 1999. The Ecologies of Scale Evan D. G . Fraser 86 Table 6-1 Estimate of total government support in 1998 U.S. dollars for farmers in the U.S., Canada, and Europe between 1996 and 1998. Country Estimate of producer Estimated of producer supports per farmer per supports per hectare year between 1996-1998 per year between in U S Dollars. 1996-1998 in U S Dollars Canada $7-8,000 $44 United States $15,000 $85 European Union $20-25,000 $801 Source: Organization for Economic Cooperation and Development, 1999 p. 27. The Ecologies of Scale Evan D. G . Fraser 87 Figure 6-2 Government farm support payments in thousands of 1998 dollars, as reflected in farm cash receipts in British Columbia, 1985-1998. 90000 80000 70000 60000 c 3 50000 o o 40000 30000 20000 10000 0 C O CO C D C O CO C O O l O ) Nl Source: Canada , !<• The Ecologies of Scale Evan D. G. Fraser 88 One of the causes for the decline in governmental support is that multi-lateral agreements signed in 1990s brought agriculture commodities under international trade laws for the first time (Ervin, 1997, p. 5-6). These agreements include the Uruguay Round Amendment to the General Agreement on Tariffs and Trade (GATT) that established the World Trade Organization (WTO), the U . S . / C a n a d a Free Trade Agreement (FTA), and the North American Free Trade Agreement (NAFTA). Reports written by the B . C . Ministry of Agriculture, Fisheries and Food, and Agriculture and Agrifood Canada suggest that unti l the mid-1980s there was little or no discussion about bringing agriculture under international trade rules. (British Columbia Ministry of Agriculture Fisheries and Food, 1995; Agriculture and Agri-Food Canada, 1998). A n early sign of this change came in 1988 when the U.S . and Canada signed the Free Trade Agreement that stipulated all border tariffs in place at the time would be phased out by 1998. In 1994, the North American Free Trade Agreement (NAFTA) came into being. It stipulated that all border tariffs between Canada, Mexico, and the United States except those on dairy, poultry, and eggs would be eliminated by 1998 (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 1). These two treaties, however, are relatively insignificant when compared with the changes made to the G A T T that were agreed to at the Uruguay Round negotiations that created the World Trade Organization. The goal of the W T O is to bring agriculture under "normal" international trade rules that ban subsidies and required the elimination of other trade-distorting practices (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 16). The WTO's agreement on agriculture, the related agreement on sanitary and phytosanitary standards, and the agreement on dispute settlement, influence the ways that governments support domestic producers (Agriculture and Agri-Food Canada, 1998b, p. iv) During W T O negotiations, existing subsidy programmes were considered to fall into three "boxes." Programmes in the yellow box are unacceptable under international trade rules. These include direct payment to farmers based on export performance, the sale of non-commercial stocks at below the domestic price, and lower internal transportation charges on export shipments. Green box programmes do not distort trade and are discussed in Annex two of the World Trade Organization's Agreement on Agriculture. These include research, inspection, extension, training, marketing, and infrastructure development (Agriculture and Agri-Food Canada, 2000a; Agriculture and Agri-Food Canada, 2000). The European Union obtained an exemption for certain subsidies, which are considered to fall into the "blue box." E a c h subsidy programme is dealt with individually, and the standard against which these programmes are compared is whether they influence production. If programmes create incentives to increase production and if government assistance exceeds 5 per cent of the total annual value of production, then the subsidy represents a "serious prejudice" to trading partners and must be eliminated or the partners The Ecologies of Scale Evan D. G . Fraser 89 compensated (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 3). The W T O agreement, however, allows certain safeguard measures in the event of sudden price swings and changes in production. In the event of a sudden increase in imports or a drop in prices, countries may increase tariffs by 30 per cent if: (1) imports exceed a three-year average by 25 per cent and imports are 10 per cent of national consumption, or (2) imports exceed a three-year average by 10 per cent and imports are 10-30 per cent of consumption (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 12). In addition to placing programmes in yellow, blue, or green boxes, the Uruguay Round introduced four new elements to agricultural trade. First, it was the first trade treaty that included agricultural products. Second, it created a new body, the World Trade Organization, to oversee and enforce the agreement. Third , it established that countries that become members of the W T O could not select the rules that they wanted to adhere to and could not opt-out of specific rules for domestic reasons. The fourth significant change is that the W T O eliminated a number of ways that governments can influence foreign competition within their country. Previously, governments had used such strategies as industry supports, technical regulations disguised as health or environmental concerns, and production subsidies to block imports and support local producers. For example, before the W T O , the Canadian government controlled dairy, poultry, and egg imports through quantitative restrictions at the border. Under W T O rules, the only way a country can restrict imports is through tariffs. Consequently, quantitative restrictions imposed by the Canadian government, were converted to tariff-equivalents (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 4). Governments not only agreed to change subsidies, import restrictions, and technical requirements to a tariff system, they also agreed to reduce tariffs by a min imum of 15 per cent and an average of 36 per cent over six years and allow "minimum import access" or a min imum amount of a foreign good that must have access to domestic markets. For Canadian dairy, poultry and eggs this amounted to a 15 per cent reduction in tariffs over six years, or a 2.5 per cent annual reduction. Tariffs on fresh fruit and vegetables imported into B . C . have been reduced by a min imum of 15 per cent; however, some tariffs, like the tariff on fresh raspberries, was completely eliminated. Tariff reductions on processed fruit and vegetables are higher. In general, tariffs on processed vegetables were reduced by 36 per cent, while the tariffs on processed mushrooms and frozen strawberries were reduced 15 per cent, and processed asparagus was reduced by 50 per cent (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 10). As a result of these changes, B.C.'s horticultural industry and its fruit and vegetable processing industry have experienced the largest impact of all agricultural sectors because competition in this sector is fierce from highly-concentrated The Ecologies of Scale Evan D. G . Fraser 90 California producers and low-cost Mexican farmers (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 1 ) . D A T A FROM T H E L O W E R F R A S E R V A L L E Y Methods In order to assess the impact of these agreements on the environment, we used crop data at a number of scales to assess biodiversity and data on groundwater pollution and nutrient production to assess nutrient cycles. At an aggregate scale, provincial-wide horticultural data show how many hectares of each crop farmers planted over the 1990s. Since provincial horticultural production is concentrated in the Lower Fraser Valley and relatively few horticultural crops are grown in the prairie-like Peace-River region, which focuses on grain, the arid interior of B . C . , which raises cattle, or the fertile valleys that specialize in tree fruit and wine production, these data are relevant to this research. Using the methods to calculate alpha diversity described in chapter three it was possible to determine a yearly relative specialization score for horticultural farms. These data were also used to determine the proportion of all horticultural land devoted to the four most-planted crops. The Agriculture and Agri-Food Canada database, used to test the role of land tenure in chapter five, was used in this analysis to calculate the relative specialization of farmers' fields in the municipality of Delta. Although these data do not cover as long a period as the provincial data, it is useful because it only includes farms at the mouth of the Fraser River, where the soil is prone to compaction. R 2 values as well as F statistics were calculated using Microsoft Excel 2000's regression and A N O V A analyses using the following model. Y(i)=U+CX +CT2E Where: Y represents the relative specialization score Delta's field in different years (i). u represents the population mean. cr2 sa represents the variance due to year. Q 2 e represents the residual or unexplained variance. Statistical tables are included in appendix IV. A n analysis by Schreier et. al. on the spatial and temporal variability of nutrient production and depletion in the Lower Fraser Valley provided nutrient cycling data (Schreier et al., 2000). In addition to these biological indicators of sustainable agriculture, two other types of industrial data were used to infer changes in the environmental impact of farms in the Lower Fraser Valley. First, the Canadian census provided data on changes in the use of soil conservation methods (generically called "conservation tillage") on horticultural farms in the Lower Fraser Valley. The Ecologies of Scale Evan D. G . Fraser 91 Second, industry data illustrate that organic food production has expanded in B . C . Diversity data Figures 6-3, 6-4, and 6-5 show how the diversity of horticultural crops has changed over time (all tables and figures are included at the end of the discussion of the results). Results are summarized: • Figure 6-3 shows a decline in the relative specialization of farms over the 1990s. • Figure 6-4 shows that the top four most planted horticultural crops have declined from approximately 60 per cent of the total land devoted to horticultural to roughly 50 per cent (these crops, in order of area planted are potatoes, corn, shell peas, broccoli, see table 6-2). • Figure 6-5 shows that between 1996 and 1999, the specialization score declined in the municipality of Delta. This is only a weak statistical relationship (since F=0.33 this is below the level normally reported at for statistical significance). This result is cautiously presented here since there was only a limited amount of data (only 1996-1999 crop years were available), and the trend towards increased diversity is echoed by provincial-wide aggregate data. These results illustrate that the trend towards increased diversity is both reflected at the aggregated provincial level (figure 6-3 and 6-4) but also at the micro farm level (though this is not statistically significant). As a result, we conclude that this has helped create a more robust agricultural system on horticultural farms in the Lower Fraser Valley. Nutrient cycling data Tables 6-3 and 6-4, which come from calculations made by Schreier et.al. (2000) based on Canadian census divisions (see map in chapter 1), show how the nitrogen and phosphorus inputs and outputs have become more balanced on farms in the west part of the Lower Fraser Valley. Farms in the census region of West Delta, for example went from a 30kg/cropped h a N deficit in 1991 to a 10 kg of surplus N. Conversely, census regions where livestock is concentrated experienced m u c h higher nutrient surpluses (Nitrogen surpluses ranged between 100-200 kg/cropped h a and P surpluses between 50-100 kg/cropped ha for areas where livestock is concentrated). From the perspective of nutrient cycling, we conclude that horticultural farms had better nutrient balances in 1996 than 1991 and that horticultural farms contribute less pollution than livestock farms. Census data Based on responses in 1991 and 1996, the number of farms in the Lower Fraser Valley using practices to reduce soil erosion (called conservation tillage) rose from 312 in 1991 to 533 in 1996 (reported in data tables from The Ecologies of Scale Evan D. G . Fraser 92 Schreier et. al. 2000). This number, however, includes hobby farms as well as commercial farms. To address this bias Schreier disaggregated census data into two categories: large commercial farms and small hobby farms. The number of large farms using winter cover crops to prevent soil erosion and nutrient runoff during the wet winter months also increased from 506 to 732 (Statistics Canada, 1991, 1996). Finally, the number of farmers using some form of crop rotation also rose 440 to 921 (see table 6.5). Appendix IV contains a full breakdown of this information by census region. The Ecologies of Scale Evan D. G . Fraser 93 Organic food production data Because this is a very new industry, there is a lack of good data on B.C. 's organic farming industry. According to preliminary data compiled by the B . C . Ministry of Agriculture, Fisheries and Food, retail sales of organic food in British Columbia rose from approximately $90 million in the mid-1990s to $300 million in 2000/2001 (quoted in Jamieson, 2001, p. 21). Agriculture and Agri-food Canada suggests that the organic sector in Canada is small but growing rapidly and B . C . and Quebec lead the way as the only provinces with established organic food production standards (Agriculture and Agri-Food Canada, 2001a, electronic source). According to Statistics Canada (2000), organic production in B . C . has grown from virtually nothing ten years ago to having 135 registered vegetable producers with an estimated 1340 acres in 2000 (Parsons, 2000 p. 5-7). As a result, Jamieson concludes that the B . C . organic industry has grown rapidly over the past ten years as farmers have found new market opportunities (Jamieson, 2001, p. 21). The Ecologies of Scale Evan D. G . Fraser 94 Figure 6-3 Relative specialization score for all horticultural crops in British Columbia between 1989 and 1999. F<0.01 (years with a higher score have a greater degree of on-farm specialization, i.e. less biodiversity). TD CD W CD CD i CJ c £ ro o xj c C L o o 5 | cu c _ o cp c c o ro N ro o CD ro C L ro N o CD C L CO 0 > ro CD or 2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 R = 0.6623 1989 1991 1993 1995 1997 1999 Source: calculation based on data from: Agriculture Fisheries and Food, 1999. British Columbia Ministry of The Ecologies of Scale Evan D. G . Fraser 95 Figure 6-4: Percent of total area of British Columbia's horticultural cropland occupied by largest four crops between 1992 and 1997. F<0.05. Source: Calculation based on data from: British Columbia Ministry of Agriculture Fisheries and Food, 1999 & Statistics Canada, 1998. The Ecologies of Scale Evan D. G . Fraser 96 Table 6-2 Acres of top three crop horticultural crops in British Columbia 1992 - 1997. 1992 1993 1994 1995 1996 1997 Potatoes 4985 5800 5355 5090 4950 4030 Sweet Corn 1671 1631 1525 1635 1752 1457 Green Peas 1530 1427 1518 1376 727 779 Broccoli 980 1072 1522 1523 1225 774 Total top four 9166 9930 9920 9624 8654 7040 total of A L L crops 15142 15817 16310 16033 15240 1336^ % of top four crops 60 62 60 60 56 52 Source: Calculation based on British Columbia Ministry of Agriculture Fisheries and Food, 1999 and Statistics Canada, 1998 The Ecologies of Scale Evan D. G . Fraser 9 7 Figure 6-5 Relative specialization score for the municipality of Delta. F = 0.33 (years with a higher score have a higher diversity of crops). FT = 0.4413 1995 1996 1997 1998 1999 2000 Source: Calculation based on data set provided by Dr. B. Vernon, Food and Agriculture Canada, Agassiz, B . C . The Ecologies of Scale Evan D. G . Fraser 9 8 Table 6-3 Nitrogen (N) surplus / deficit from all farms in census areas in the west end of the Lower Fraser Valley for 1991 and 1996. Nitrogen Balance Surplus or deficit Kg N / cropped h a Census Region 1991 1996 West Richmond - 75 + 1 East Richmond +75 +20 West Delta - 30 + 11 East Delta + 10 + 16 Source: Schreier et al., 2000, electronic source. The Ecologies of Scale Evan D. G . Fraser 99 Table 6-4 Phosphorus (P) surplus / deficit from all farms in census areas in the west end of the Lower Fraser Valley in 1991 and 1996. Phosphorus Balance Surplus / deficit Kg P / cropped ha Census Region 1991 1996 West Richmond - 1 + 12 East Richmond +70 +5 West Delta +30 + 1 East Delta +20 + 18 Source: Schreier et al., 2000, electronic source. The Ecologies of Scale Evan D. G . Fraser 100 Table 6-5 Soil conservation practices on large farms in the lower Fraser Valley in 1991 and 1996 large farm totals % Change 1991 1996 91-96 T O T A L N U M B E R O F F A R M S 3493 3873 10 T O T A L F A R M A R E A - H E C T A R E S 96069 110937.4 13 Crop rotation (# of farms) 440 921 52 Winter cover crops (# of farms) 506 732 44 Contour cultivation (# of farms) Na 86 n a Strip-cropping (# of farms) Na 64 n a Grassed waterways (# of farms) Na 88 n a Source: 1991 and 1996 Canadian Census cited in Schreier et. al. 2000. The Ecologies of Scale Evan D. G . Fraser 101 DISCUSSION Although there is a great deal of variation between farms, the result of all three data sources suggest that in some ways farm management has improved over recent years on horticultural farms at the west end of the Lower Fraser Valley. This supports the theory that increased international competition, and a drop in government support, contributes to better environmental management practices. C a n we conclude, however, that because increased trade seems to have led to better environmental management on farms at the west end of the Fraser Valley, that this is because farmers are protecting themselves against changes in the market or weather that could threaten their income? Or is this change a result of a more general reorganization of the agri-food industry? This is an important question, because if the change in diversity is a result of risk-averting behaviour, we would expect that trade anywhere should lead to a better-managed environment. Conversely, if this change is a reflection of the re-organization of the food processing industry discussed in chapter four, then trade may have different implications for the environment of B.C. 's trading partners. To study this, we will examine changes in the B . C . vegetable industry and focus on B . C . vegetable processors. This will allow us to determine how the processing industry influences farm diversity and will allow us to answer the question: "has the change in diversity been a result of changes in processing opportunities?" Then we will evaluate the impact of trade on the environment in California, one of B.C. 's major trading partners for horticultural commodities. The processing industry Data suggest that the vegetable industry in British Columbia has undergone significant change. Unlike the rest of C a n a d a (and most of the industrialized world), there are more farms in B . C . than in the past. According to the 1971 census, there were 4487 farms in B . C . In 1996, there were 6671. A large proportion of this growth is accounted for by small farms; there were 2193 in 1971 to 3309 in 1996 (Penfold, 1998, p. 1-2). The vegetable processing industry is also in transition, and has declined in B . C . since at least the late 1970s. The annual report filed by the Ministry of Agriculture and Food in 1980 states that "...since the near collapse of the [horticultural] processing industry ... competition from U.S. growers has increased..." (British Columbia Ministry of Agriculture Fisheries and Food, 1980, p. 22). Agriculture and Agri-food Canada point out that following the implementation of the Canada-United States Free Trade Agreement (FTA) the processing industry underwent a severe period of rationalization that resulted in fewer plants and products but increased production (Agriculture and Agri-Food Canada, 1998). 4 3 4 3 We cannot conclude that the trade agreements themselves are the sole cause of this transition, as this may be a result of the underlying economics of vegetable processing The Ecologies of Scale Evan D. G . Fraser 102 The private consulting firm, Ference and Weicker (Ference and Weicker Ltd. , 2000) and Agriculture and Agri-Food Canada with the Department of Foreign Affairs and Trade (Agriculture and Agri-Food Canada & Department of Foreign Affairs and International Trade, 1997), all document a decline in the number of processors in British Columbia. They estimate that between 1984 and 1995 the contribution that food and beverage processing made to provincial G D P declined by approximately 40 per cent. There was a 13 per cent drop in the number of businesses (including 1 person establishments) between 1988 and 1994, and the industry became concentrated with the largest 40 per cent of companies producing 91 per cent of shipments (Agriculture and Agri-Food Canada & Department of Foreign Affairs and International Trade, 1997). These are not new problems in British Columbia. In his first report, B.C. 's first agricultural minister, James Anderson who was appointed in 1891, pointed out that a lack of processing plants seriously undermined local farmers' ability to develop a thriving industry (British Columbia Ministry of Agriculture Fisheries and Food, 1996, p. 30). Anderson's comments resonate today just as m u c h as they did 110 years ago. By the 1920s and 1930s this problem had been at least partly alleviated. In 1921, the Broder Canning Company established a factory in Ladner at the mouth of the Fraser River. Approximately 2,000 acres of peas were grown in this area each year to support this factory (British Columbia Department of Agriculture, 1966, p. 24). In the 1930s, Canadian Canning Ltd. also built a factory near Sumas, east of the mouth of the Fraser River. Also in the 1930s, Robert Broder added a corn processing plant in New Westminster (this later became Royal City Foods), and in 1936-7 Canadian Canning Ltd. , added sweet corn to the farm products they processed (British Columbia Department of Agriculture, 1966). Today, all of these operations, and a number of other processors (like the Nalley's Potato Chip factory that shut its doors in the mid-1990s), have closed. Ference and Weicker (2000) review industry data to illustrate that the B . C . food and beverage industry is simply not competitive with other regions in Canada. They estimate that there are around 300 food and beverage processors in the province and that these companies shipped an estimated $3.62 billion dollars worth of products in 1996 (Ference and Weicker Ltd, 2000). Excluding those employed by fish processing, Ference and Weicker calculate this industry employs between 15,000 and 17,000 people. Despite this industry's important role in the B . C . economy, B . C . processes considerably less food and beverages than Alberta, which ships $6.8 billion worth of food and beverages every year. The gap between B . C . and Alberta has increased in recent years and Alberta's business has grown 7.4 per cent per a n n u m compared with B.C.'s 3.7 per cent (Ference and Weicker Ltd, that led to a reorganization of the industry independent of trade agreements. It is likely, however, that trade agreements have made this change easier by removing barriers between regions. The Ecologies of Scale Evan D. G . Fraser 103 2000). Ference and Weicker also observe that the processing industry is smaller in B . C . than would be expected with the size of the province's population. B . C . has 12.7 per cent of Canada's population yet only 7.2 per cent of the total food and beverage processing in the country (Ference and Weicker Ltd, 2000). Finally, the Ference and Weicker report quantifies a number of costs that are higher in B . C . than the rest of the country. B . C . has higher labour costs as a percent of food manufacturing shipments in the processing industry than the rest of Canada. In Alberta, labour costs represented 5.7 per cent of the price of food shipments while in B . C . labour represented 9.9 per cent. B . C . has the highest average wage for workers in the food processing industry ($15.24/hour for B . C . workers, compared with $14 .32/hour for the rest of Canada). Productivity was also lower in B . C . than in the other provinces. In B . C . manufacturing shipments per production hour averaged $154.09 in 1996. The Canadian average was $176.30/production hour at this time (Ference and Weicker Ltd, 2000). This has resulted in B . C . having a large trade deficit when it comes to food products and is "...likely Canada's largest net importer of food and beverage products from other provinces." (Ference and Weicker Ltd, 2000). 4 4 Processing and Diversity Now that we have established that there has been a significant decline in the processing industry, we must see what role this decline has played in determining farm diversity. In order to test the role that the processing industry has on diversity, relative specialization scores were calculated for processing crops (Figure 6-6). This graph shows a m u c h steeper decline in specialization than figure 6-3, which illustrates relative specialization for all horticultural crops. This demonstrates that farmers who grew crops for processing rather than for fresh sale diversified to a greater degree than most horticultural farmers. Figure 6-7 echoes this point, showing that the value of processed crops has declined while the value of fresh crops has increased. Figure 6-8 shows that the total area of processed crops has dropped steadily while the total harvest of fresh crops has risen. Figure 6-9 shows that the three largest processed crops, shell peas, corn and potatoes, have also declined. According to this figure, 1997, which was the year with the highest relative specialization score for horticulture, was also the year with the lowest potato acreage. From this it seems that the decline in the processing industry is a major contributor to the increase in farm diversity. As processing plants have closed, farmers have tried to find new markets, and have tried new combinations of crops rather than relying on the products that processors used to demand. 4 4 It should be noted that some authors question why this should even be considered to be a problem; why should residents of a city accept a trade agreement with one region and not another. For example, why should residents of Vancouver accept a trade relationship with the Okanagan Valley and not with Washington State (Baxter, 1998). The Ecologies of Scale Evan D. G . Fraser 104 Since this evidence suggests that the increase in diversity is at least partly the result of changes in the processing industry, we cannot simply conclude that trade has forced farmers to become better environmental managers. Instead, to understand the role of trade on the environment we must expand our analysis and examine the environmental effect of trade on B.C.'s trading partners. For horticulture, B.C.'s most significant partner is California. Vegetable imports from California grew by approximately 35 per cent from $220 million (current dollars) Canadian in 1991 to $ 347 million in 2000 (Industry Canada, 1999, on-line database). Table 6-6 illustrates the growth of B.C.'s imports from California. Although this could be the result of a changing exchange rates, this trend highlights a critical fact: more important than the increase in trade, our dependence on California as our primary source of fresh and processed vegetables has also increased. Data from Statistics Canada shows that although B . C . has never been a net exporter of vegetables to this region, its trade deficit has grown by approximately 20 per cent since 1991, and California alone accounts for 50 per cent of the B . C . vegetable trade deficit. (Industry Canada, 1999, on-line database). As a result, if we want to accurately assess the environmental impact of trade on farms we must study the horticultural industry of California. The remainder of the chapter is devoted to this task. First, we shall review California's position in the North American horticultural industry. Second, we will investigate how this has had an effect on California's environment. The Ecologies of Scale Evan D. G . Fraser 105 Figure 6-6 Relative specialization score for processed vegetable crops in B.C. between 1990 and 1999. F<0.05 (years with high value indicate less biodiversity and greater specialization). R2 = 0.8978 Year Source: Calculation based on data from: British Columbia Ministry of Agriculture Fisheries and Food, 1999. The Ecologies of Scale Evan D. G . Fraser 106 Figure 6-7 Sales from total field crops, processed field crop, and fresh field crops from B.C.'s lower mainland. c •a O o o C 3 Mainland, field veg production total sales • Mainland field crops, fresh sales •*- Mainland, field crops (processed sales) Year Source: Brit ish Columbia Ministry of Agriculture Fisheries and Food, 2000. Available at: h t t p : / / w w . f b m i n e t . c a / b c / s t a t s / H O R T _ S T A . h t m The Ecologies of Scale Evan D. G . Fraser 107 Figure 6-8 % of the total harvested area for fresh or processed vegetables in British Columbia. 0) +•> U) Q) Z ra .c ~o c ro "ro +-> o •%of total field crop harvested for fresh % of total field crop harvested for processed ^ K<^ # NT-Years Source: Calculated from British Columbia Ministry of Agriculture Fisheries and Food, 1999. The Ecologies of Scale Evan D. G. Fraser 108 Figure 6-9 Area (in acres) of the three largest processed vegetables B.C. i n O v. O < -•- total corn - A - total shelled peas total potatoes Year Source: Calculated from British Columbia Ministry of Agriculture Fisheries and Food, 1999. The Ecologies of Scale Evan D. G. Fraser 109 Table 6-6 Value (in millions of current Canadian dollars) of B.C.'s vegetable imports from California between 1991 and 2001. Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Imports (million 220 225 259 261 276 277 316 348 327 347. current $) , Source: Industry Canada, 1999, on line. The Ecologies of Scale Evan D. G . Fraser 110 CALIFORNIA: T H E CENTRE FOR NORTH AMERICA'S HORTICULTURAL INDUSTRY Today, California is the undisputed leader in North American horticulture. According to McClurg , although California has just 8 per cent of U.S . irrigated cropland (California has roughly three million irrigated acres), it produces 50 per cent of the American fruits, nuts and vegetable harvest (McClurg, 2000, p. 95). Connor and Schiek point out that California is the centre of food processing for most of North America. For example, this state dominates the North American tomato, tomato paste, and tomato sauce industry, which is the second largest processed vegetable industry on the continent after frozen potatoes. California's share of the American canned vegetable market is 45-50 per cent. It also has the second largest frozen fruit industry (Connor & Schiek, 1997, p. 157-161). This state is the leader in what Connor and Schiek call demand-oriented processing, or industries that locate close to consumers because the final product is fragile (e.g., potato chips) as well as supply-oriented industries like lettuce, where the major cost is obtaining raw product (Connor 8B Schiek, 1997, p. 146-175). Stoll analyses why California has become the "industrial garden for the continent." He argues that although California has an excellent climate, it was on the periphery of the North American market in the late 1800s when this area was first developed for agriculture (Stoll, 1998, p. 62). According to Stoll, the earliest farmers who settled on these fertile valleys focused on developing export markets around North America. Between the 1880s, when fields were first cultivated, and 1927, California fruit producers were able to corner 67 per cent of the U.S . canned fruit market (Stoll, 1998, p. 4). Between the 1880s and 1900, California farmers specialized in grain production. Wheat is durable, transports easily, and grew well for the first generation of farmers (McClurg, 2000, p. 96; Stoll, 1998, p. 29). By 1900, however, wheat yields were in decline and the soil could no longer produce grains efficiently. Preliminary experiments with irrigation demonstrated that, with the proper infrastructure, this area was well suited to fruit and vegetable production. Banks and credit unions facilitated the switch from grain farms to orchards and horticultural farms by offering favourable loans of up to $400 per acre for farmers interested in developing orchards at a time when credit was unavailable to grain farmers (Stoll, 1998, p. 33-4). Land developers realized this potential, bought up large areas of under-utilized grain-land, and established the irrigation infrastructure. Stoll details a number of these land developments (Stoll, 1998, p. 33-35). For example, the developer William C h a p m a n established an agricultural colony near Fresno, and hired a corps of engineers and workmen to divide former grain land.into 32, 20-acre vineyards. He arranged a system of canals and ditches to carry groundwater and even planted grape vines between 1875 and 1877. These plots were marketed to urban residents from the Northeastern U.S . who were disgruntled with city life. The Ecologies of Scale Evan D. G . Fraser Ill A second ambitious project was sponsored by a group of German investors who had 450 miles of ditches and 25 miles of feeder canals dug before they began selling parcels of land to potential farmers. Similarly, the "76-Company," a private land development firm, built a 30-mile irrigation canal that brought water to 100,000 acres of soon-to-be planted orchard and vegetable garden in Fresno and Tulare County. In all, by the early 1900s there were approximately 500 miles of waterways that made horticultural production possible on approximately 200,000 acres of land (Stoll, 1998, p. 33-35). Two important themes r u n through the development of California's agriculture. First, one of the reasons for these massive investments was the realization that the only way of increasing farm-income was through increasing yield. Unti l this point, American farmers were still developing new land that had never been intensively cultivated. California was one of the last agricultural frontiers, so once this area had come under the plough, the only way farmers could increase income was through land improvements that increased the revenue per hectare. The second theme is that California never had what some might consider traditional farms that produced commodities for personal or local consumption. From its earliest development, California farmers were traders who sold their goods all across the U.S. According to Stoll, the period between 1900 and 1920 was critical to establishing California as the premier fruit and vegetable exporter on the continent (Stoll, 1998, p. 56). At this time, farm economists came to the understanding that distributing fruit is more profitable than producing it. From this point, farmers took huge risks sending uninsured shipments of fruit across the continent for sale in the rich markets of New York or Chicago. Farmers, however, were at the mercy of processors based in the East. It was virtually impossible for individual California growers to maintain a supply chain that ensured that food would be sold before it spoiled and that the farmer would receive profits from any sale. This provided the incentive for California farmers to organize and develop the technological and institutional infrastructure they needed to export their products and dominate this industry (Friedland, 1994, p. 174-175; Stoll, 1998, 57). As a result, starting with the formation of the first California farmers' union in the late 1800s, farmers began to consolidate the sale of California produce. First they established uniform grades that defined quality, they then invested in standard boxes for all California produce and engaged in deliberate and orderly marketing and promotion. This had a dramatic effect on California's position within North America and the canning and freezing industry began shifting towards California. Developments after World War II facilitated this process. Friedland (1994) outlines how increased consumer demand for fresh produce, better storage and refrigeration technology, and global trade facilitated an integrated network of agri-food companies that deliver fresh food to economically privileged consumers (Friedland, 1994, p. 210). Friedland argues that a "cool system," originated out of California because California lettuce producers The Ecologies of Scale Evan D. G . Fraser 112 were able to develop methods to produce lettuce year round (Friedland, 1994, p. 212). To accomplish this, farmers needed to be sufficiently organized that they could shift lettuce production through a variety of sites in California (and later in Arizona) to guarantee year-round production to distributors and retailers. The secret was to organize farmers over a large geographic area to work together and time their harvests so that California lettuce was always available. The second logistical task that farmers had to overcome was to develop the network of refrigerator trucks, climate controlled storage facilities, and retail outlets to move fragile and perishable produce to market . 4 5 Technological advances such as vacuum packing lettuce helped develop this system (Latham, 1992, p. 5-10). According to Friedland, however, the real accomplishment was not devising new technology, but organizing the h u m a n and physical infrastructure to move dozens of very valuable but highly perishable commodities, each with specific temperature and humidity requirements, around the continent every day. Once the organization was established for lettuce, year round tomato production was soon developed and today urban North American residents enjoy unparalleled fresh produce year-round (Friedland, 1994, p. 212-213). Governmental policy has also played a significant, though sometime unwitting, role in determining California's dominance. Friedland, Barton and Thomas (1981) show how a massive re-organization of California's tomato industry was (a) an unintended consequence of a change in America labour law, and (b) helped establish California's position of dominance in the North American tomato industry (Friedland, Barton, 8& Thomas, 1981 p. 37-42). Unti l the mid-1960s tomato production was very labour-intensive. The labour supply in California was essentially unlimited because farmers could hire very low-paid Mexican workers to harvest this crop. In 1962, there were 4,000 tomato producers and 50,000 workers (Friedland et al. , 1981, p. 38). This system supported small farmers who intercropped a variety of species. As a result, when the University of California announced in 1961 that they had perfected a tomato-harvesting machine, and had bred a new variety of tomato that would withstand being handled by these machines, few farmers had the incentive to spend the $25,000 for this highly specialized equipment . 4 6 After this harvester had been on the market for three years> 96.2 per cent of California tomato harvest was still handpicked. Around the same time, in the early 1960s, however, the U.S. federal government announced that it would crack down on migrant labour. Farmers in 4 5 The approach has spread to elements within the B.C. hothouse industry that now have partners in California and Mexico to cover months when B.C.'s produce cannot meet demand. 4 6 This point underscores an often hidden influence that shapes American agriculture. The U.S. government funds agriculture through the land grant university system. Although in the past this system has been seen as perpetuating large-scale industry agriculture, emerging "societal concerns about resource use, environmental impact, [and] food safety prompted U.S. landgrant universities to reevaluate priorities and led to some new initiatives in sustainable agriculture. (Francis et al., 1995) -The Ecologies of Scale Evan D. G . Fraser 113 California realized that they would be facing serious labour shortages and worried that they would lose market share to Mexican producers. In the wake of the federal labour announcement, there was a massive consolidation of tomato producers. By 1969, 99 per cent of the harvest was done using machines, by 1973 there were just 597 commercial tomato growers still in operation, and in 1972 this industry only employed 18,000 people (Friedland et al., 1981, p. 38-41). The location of tomato farms shifted, and this set off a minor land rush that drove up land values around the already large-well established producers. Irrigation, processing and transport facilities also moved to take advantage of this new industry concentration, and the government's decision to upgrade a small country road on the west side of the San Joaquin Valley to Interstate Highway #5 made Fresno County the major tomato producing region in the country (Friedland et al., 1981, p. 40-41). While it is undeniable that California has many natural advantages, this discussion highlights that it would be a mistake to reduce all of California's successes to climate and soil conditions. Instead, the history of California shows how policy decisions, organization within the industry, technology and natural advantages all combined to establish this region as the pre-eminent vegetable exporting area on the continent. The impact on California's environment Preliminary data show that agriculture has contributed to two significant problems for the environment in California: (1) water and (2) specialization. California has serious environmental problems with water pollution and exploitation. First, intensive agriculture has contributed to very serious water problems and decades of agri-chemical use have led to serious ground-water contamination (McClurg, 2000, p. 137). Young and Karkoski cite the U.S. Environmental Protection Agency (USEPA) that 37 per cent of surface water in the U S is unfit for either wildlife or fish habitat or h u m a n consumption and that agriculture is responsible for polluting 70 per cent of the nation's tainted waterways. Although these are national statistics, Yourn and Karkoski point out that this problem centres on California and other regions where there is a high density of agriculture (Young & Karkoski , 2000, p. 151-152). Hunt et. al. (1999) point out that 89 per cent of California's riparian woodlands, which were intact 100 years ago, have been lost to agricultural uses, and that 80 per cent of the coastal wetlands has been drained for urban or agricultural use. In the Pajaro River watershed, where Hunt et. al. did their work, 5.7 million kg of synthetic organic pesticides were applied in 1994, and that over 90 per cent of mussels sampled in one study contained toxic levels of organic chemicals (Hunt et al., 1999 p. 75-6). Similarly, Loague et. al. (1998) argue that agricultural run-off constitutes a major environmental problem throughout California (and elsewhere), as pesticides and nutrients leach into ground water where ever there is intensive agriculture (Loague, Lloyd, Nguyen, Davis, & Abrams, 1998, p. 109). The Ecologies of Scale Evan D. G . Fraser 114 Jus t as significantly, poor water management has led to the depletion of underground aquifers. Because of California's arid climate, fruit and vegetable farmers must irrigate during the dry winter months. The irrigation systems established by the early land developers generally made use of surface water, trapping and storing rainfall and directing the flow of streams and rivers into fields. In the 1920s, irrigation in the state exploded with the invention of the deep-well turbine pump that brought groundwater 4 7 within farmers' reach (McClurg, 2000, p. 105). This has led to groundwater overdrafts, where more water is removed from the water table than is replaced every year by rainfall. Estimates from the late 1980s suggest that there is an average decline of between approximately 15 cm to l m in California's water table each year (Soule & Piper, 1992, p. 26). More recently, the state experienced a 1.6 million acre-feet 4 8 ground water overdraft in 1998 (Kuminoff, Sumner, Buck, 8B Goldman, 2000 p. 40). G r o u n d water overdrafts have been so common throughout California's agricultural history that many areas have experience significant subsidence 4 9 . In the San Joaquin valley, for example, 5,200 square miles have sunk between one and thirty feet since the origins of groundwater irrigation (McClurg, 2000, p. 105). Groundwater overdrafts and water pollution, however, are an inevitable price of California's success. According to McClurg , irrigation not only allows farmers to develop agriculture in an arid climate, but it also allows them the ability to carefully control water use. Thanks to the winter drought and irrigation, farmers in California never have to worry about floods or moisture shortfalls. This marks California farmers as perhaps unique in the history of agriculture. Throughout history, farmers have been powerless to influence how m u c h water their crops receive. In B . C . , for example, fields often are waterlogged in the spring due to late rains, which prohibits ploughing. Fields may become compacted in the fall if a late harvest coincides with early winter rain. Because the California farmer precisely controls the water fields receive, producers do not have to be concerned with any of these issues (McClurg, 2000, p. 95) . 5 0 However, the massive problems of ground water overdraft makes this is an unsustainable form of agriculture. The second major environmental problem is that farms in California have specialized in a very small number of crops. As highlighted in chapter two, specialization translates into high input use, broken nutrient cycles, and water pollution. Highly mechanized and specialized farms are also not 4 7 Groundwater: "The water that moves down into the soil and underlying geological strata from the upper soil layers following rainfall. Groundwater is stored in aquifers, and the boundary between aquifers and overlying unsaturated soils is the water table. Ground water may move underground by streams and seepage." (Dunster & Dunster, 1996, p. 154) 4 8 Acre-foot: "A unit of measurement describing water or sediment volumes; equal to a volume that would cover an area of one acre to a depth of one foot. A volume of 43,560 cubic feet or 1,233 cubic meters." (Dunster 8s Dunster, 1996, p. 5) 4 9 Subsidence: "...the collapse or sinking of the ground's surface due to subsurface changes in structure." (Dunster 8s Dunster, 1996, p. 305) 5 0 Unless, of course, wells run dry. The Ecologies of Scale Evan D. G . Fraser 115 compatible with sustainable crop rotations that include the use of fallow or grasslands. Specialization was one consequence of the consolidation in the tomato industry. In order to pay off debt accrued to buy the harvesters, farmers need to plant a min imum number of hectares of tomatoes each year. Consequently, the move towards highly specialized machinery led to a consolidation of the industry that reinforced an un-ecological specialization on farms. The processing industry has exacerbated this. To guarantee their customers a regular and consistent supply, large processors usually sign long-term contracts with farmers. Increasingly, these contracts stipulate the way a farmer produces the crop and how it is harvested (Winson, 1992, p. 139-141). In California, this has resulted in processors stating that they will only purchase tomatoes from farmers with machine harvesters. As a result, the system that has evolved in California makes sustainable agriculture a practical impossibility. Another part of California's agricultural industry that has become extremely specialized is dairy production. According to Butler and Wolf (2000), dairy in California began to take off in the late 1970s (Butler & Wolf, 2000, p. 141-143). In 1970, California accounted for 8 per cent of total U.S . milk production. By the early 1990s, California had overtaken Wisconsin as the chief milk producing state, and in 1998 California produced 18 per cent of U.S . milk (Butler & Wolf, 2000, p. 141). During this time 89 per cent of U.S. milk producers vanished, and herds in California grew from an average of 39 cows in 1959, to 173 in 1978, and 530 in 1999 (Butler & Wolf, 2000, p. 145). By contrast, B . C . dairy herds, which are large by Canadian standards, are approximately 70 cows/farm (Agriculture and Agri-Food Canada, 1996, p. 22). 5 1 This creates massive waste disposal problems and is a major contributor to groundwater pollution (the dairy industry is explored in more detail in the next chapter). Crop specialization is a legacy of California's origins as an agricultural export zone. Since the goal of farming in this state was never self-sufficiency, and there was never any expectation that local farms would meet the diverse demands of the local market, farmers in California have always specialized in a very limited range of crops. This is one reason that they have been so efficient at out-competing rivals. From the beginning of agriculture in this region, farmers have specialized in only those crops in which they have a natural advantage. To accomplish this, however, they use unsustainable water management to reduce the risks of crop failure (Friedland et al., 1981, p. 37-42; Goodman 8B Redcliffe, 1991, p. 202-203; Stoll, 1998). A speech 5 1 In all likelihood this number is a considerable under-estimate of the real size of B.C. dairy operations, and this includes all farms, including small hobby farms with one or two cows. According to Barichello [Barichello, 2000; personal communication], B.C. most commercial herds in the province are close to 100 cows. The Ecologies of Scale Evan D. G . Fraser 116 given in the 1890s by an early proponent of crop specialization demonstrates how deeply ingrained crop specialization i s : 5 2 A man who devotes ... 20 acres to 20 different varieties of fruits will never be in a position to secure as much for his product as the grower who devotes his energy to a few products. (G. Roeding, California farmer, circa late 1890s, speaking to the State Agricultural Society, quoted in Stoll, 1998, p. 62.) This quote indicates to Stoll that social and environmental concerns were subordinate to the forces of profitability at a very early stage in California's agricultural development (Stoll, 1998, p 62). The link between profitability and specialization was so strong that farmers lobbied Washington in the 1890s to increase farm supports during cyclical economic downturn rather than diversify their operations in order to protect themselves from market fluctuations (Stoll, 1998, p. 62). It is ironic then, that although California has many obvious natural benefits, the key reason that it was able to develop its pre-eminent position in North American agriculture is due to externalising environmental problems. Without the control of irrigation water, and without the degree of farm specialization, it is unlikely that California farm groups would have been so successful. As alluded to by Calvert, in a congressional testimony to a Subcommittee on Water and Power, in the long-term the unsustainable use of ground water sources, and environmental problems associated with excessive specialization may undermine the future of the industry: California has come to another crossroads in water resource management. For years, water policy was made in isolation in many different agencies and on many different levels. Often, our direction changed in a knee-jerk reaction to events, leaving us with conflicting priorities and contradictory goals.... California is the 6th largest economy in the world, and the nation's leading producer in both industry and agriculture. Resource shortages in an economy this large will have a ripple effect throughout the west. (Calvert, 2001, electronic source) 5 2 This same logic was applied to British Columbia at the same time. B.C.'s first Minister of Agriculture, James Anderson, argued in his first report on agriculture in British Columbia (1891) that: As regarding the unsuitability of crops, there is no doubt in my mind that if the farmers could confine themselves principally to dairying, fruit culture and root crops in the lower country, leaving cereals to those of the upper country, it would result much more favourable to the interests of all. (quoted in British Columbia Ministry of Agriculture Fisheries and Food, 1996 p. 9) Demeritt also points out that an electric railway linked Vancouver with Chilliwack in 1910. This allowed farmers well up into the valley (where land values are lower) to concentrate on dairy and sell into the big Vancouver market (Demeritt, 1997). The Ecologies of Scale Evan D. G . Fraser 117 Clearly, California's environment has suffered serious degradation due to agriculture. Nevertheless we must ask, do these data tell us anything about how open trade will affect sustainability or environmental damage? Might these issues be merely a result of a lack of environmental regulations? While a lack of governmental regulation may well be part of the story, preliminary evidence shows that the US has laws that protect the nation's lakes and rivers. For example, the Clean Water Act (CWA) is a very strong piece of legislation aimed at preventing water pollution. The CWA itself emerged from two separate bills. In 1972, the US government passed the Federal Water Pollution Control Act. This was amended in 1977. Together the original regulations and the amendments are referred to as the Clean Water Act. The CWA gives the Environmental Protection Agency (EPA) the authority to set effluent standards for all contaminants of surface waters (Carrel, 1999. on line). According to the Sierra Club, the CWA has three goals: -1. Enhanced protection from public health threats posed by water pollution. 2. More effective control of polluted runoff (from agriculture, urban streets, public lands, etc.) 3. Promotion of water quality on a watershed basis. (Sierra Club, 2002, on line). Theoretically, this should be enough to ensure that agricultural runoff does not pollute surface water. However, many feel that the bill has not been successful in reducing agricultural pollution. For example, in 2000 the National Wildlife Foundation published a report that graded how well each state enforced the Clean Water Act (National Wildlife Foundation, 2000. on line). According to the National Wildlife Foundation, no state received an "A" and California, along with 20 others, received an "F." (CNN, 2000. on line, for the full report see: http://www.nwf.org/watersheds/paralysis/pp2_report.pdf). Also in reaction to the perceived failures of the Clean Water Act, in 2000, a new bill was introduced into the US senate to protect fish habitat from water contamination. The proposed legislation was needed because the Clean Water Act had failed to ensure adequate conservation of fresh water (American Sportfishing Association quoted by CNN, 2000, on line). Since the Clean Water Act has not prevented water pollution or ensured that agricultural practices do not destroy fish habitat, we can conclude that there are more forces at work than just a lack of governmental regulation. Instead, to understand why agriculture causes poor environmental management we must look at the influence that macro-economic forces like international trade have in favouring types of farms that may cause environmental problems regardless of government regulation. The Ecologies of Scale Evan D. G. Fraser 118 S U M M A R Y AND CONCLUSION TO T H E EFFECT OF TRADE The purpose of this chapter was to analyse and test the effect of trade on the environment. Based on the discussion in chapter four we hypothesized that if pro-trade theorists are correct, then an increase in trade will lead farmers to adopt risk-averting behaviour and become better environmental managers. Data from British Columbia, which show an increase in trade and an increase in good environmental management on farms, supports this hypothesis. In order to understand whether this conclusion could be applied to all situations where trade has increased, we examined data on B.C.'s processing industry. The processing industry is important because processors provide a market for the majority of horticultural harvest that are not sold as fresh produce. Since increases in farm diversity are directly associated with changes in the processing industry, it was necessary to investigate how trade has impacted on B.C.'s most important horticultural trading partner, California. A review of California agriculture revealed that California has a natural advantage over most other farming regions in North America when it comes to climate. This natural advantage alone, however, does not account for its dominant position in world horticultural markets. Instead, careful marketing, the development of an extremely complicated transportation and storage infrastructure, and cooperation between producers are all vital components of California's successes. The system of highly specialized, irrigated farms that fuels California's industry, however, is based on two fundamentally un-ecological characteristics. First, agriculture in California has regularly exploited groundwater aquifers, which has resulted in a serious drop in the water table and major subsidence problems. Second, by specializing on highly mechanized farms, California producers have created a series of other negative environmental problems. Despite the fact that the agriculture is unsustainable, climate, producer organization, irrigation, transportation, storage, and government policy have all combined to allow California to seize the opportunities presented by increased global trade, and become the premier agricultural region on the continent. This is a reinforcing cycle. Thanks to ecological factors and unsustainable practices, California was able to develop a certain critical mass of production. This became a magnet for processors, which relocated to this area throughout the twentieth century. The growth of Los Angeles, a huge and wealthy urban population was another draw for processors, and other components of the agri-food industry. The dominance of the industry reinforced California's position as a major horticultural hub and further entrenched unsustainable water use and crop specialization. This attracted more processors, and led to more intensive, un-ecological farms. Consequently, integrated crop-livestock agriculture, with high biodiversity and closed nutrient cycles, is unsupportable because much of California's efficiency is built around specialization. Processors offer large mechanized producers long-term contracts, and small farmers lose their markets and are bought out by large farmers. The Ecologies of Scale Evan D. G. Fraser 119 In British Columbia, the opposite has occurred. B . C . is a less favoured agricultural area compared with California. As a result, the agriculture industry, based on a marginal climate and geared to provide food for the local population, suddenly faced serious competition with a massive, well-organized, export-oriented competitor as trade barriers dropped. Vegetable freezing and canning factories, which Connor and Schiek (1997) call "footloose" immediately either closed, unable to compete with the highly competitive, year-round produce out of California, or relocated to the U.S . Land based horticultural farmers in the west-end of the Lower Fraser Valley have lost their markets and been forced to find alternatives. This began the reverse process to what we witness in California. These farms have become de-centralized, more diverse, and better environmental managers as the industry and government programmes, which used to support them, have vanished. Accordingly, these farmers have explored new markets and found that some consumers will spend a premium for local, organically grown produce. This has spurred B . C . to be one of only two provinces to develop organic standards. This depiction, however, cannot be generalized across B.C. 's agricultural industry. Other types of farms (cattle, dairy, and poultry) have become increasingly centralized, and other regions within B . C . have adapted to different circumstances. The effect of trade, therefore, has been very different on these two ends of the international agri-industrial food chain. In B . C . , trade has led to a reorganization of the industry and the loss of market share for local producers. In response, data indicate that farmers in the Lower Fraser Valley have started taking the first steps towards better environmental management, which includes finding new niche markets in organic agriculture. In California, trade has reinforced the industry's already powerful position. This has supported ecologically-damaging methods of farming. The Ecologies of Scale Evan D. G . Fraser 120 C H A P T E R 7 T H E R O L E O F G O V E R N M E N T P R O G R A M M E S : D A T A F R O M T H E F R A S E R R I V E R V A L L E Y . INTRODUCTION In chapter four, we presented the theory that government protection must balance trade's negative influence to ensure good farm management. As a result, we hypothesize that, if this theory is correct, we will observe better environmental management (i.e. high biodiversity and closed nutrient cycles) on farms that are protected by the government. In chapter six, data show that government support in B . C . has dropped over recent years. Despite these changes one part of B.C.'s agricultural system has remained protected by the government. Dairy, egg, and poultry industries are all coordinated through a "supply management system" that allocates production quota to farmers, prevents foreign competition, and sets the prices that farmers receive. The purpose of this chapter is to test the impact that government protection has on the environment by studying the impact of these industries. First, this chapter will review the marketing board system that governs trade in these commodities, how this system was developed, and how it has changed in response to international trading agreements. Second, data from the Lower Fraser Valley on the environmental impact of dairy and poultry farms will be reviewed. Third , we will examine herd size and density in other parts of North America with different governmental regimes. Fourth, the historical development of B.C.'s dairy industry illustrates how a number of factors, which include government protection, explain the impact these farms have on the environment. B. C. 's marketing board system According to Wilson, Canada has a long history of protecting farmers. In 1935, the federal government passed the "Natural Products Marketing Act" that allowed farmers to band together and bargain for better prices. This established the British Columbia Marketing Board that had the mandate to regulate the sale of certain commodities (British Columbia Marketing Boards, 2000). In 1935, Ottawa established the Canadian Wheat Board that controls the sale of prairie grain to this day (Wilson, 1990, p. 31). In 1966, the federal government responded to chaotic dairy prices and established the Canadian Dairy Commission through the Canadian Dairy Commission Act. The goal of this act is to provide: ...efficient producers of milk and cream with the opportunity of obtaining fair return for their labour and investment capital; and provide consumers of dairy products with a continuous and adequate supply of dairy products of high quality (quoted in, Barichello & Romain, 1996, p. 164) The Ecologies of Scale Evan D. G . Fraser 121 Since then, the Canadian dairy sector has been administered under a supply management system. In December 1970, a national dairy plan was established, and by 1974, all the provinces had become part of this plan (Barichello 8s Romain, 1996, p. 165). This act, and the ones that created a similar framework for eggs and poultry, established a marketing board system of production quotas, administered prices, and import controls. In essence, marketing boards operate a legal monopoly that determines the conditions of sale into the domestic market (Wilson, 1990, p. 168). The goal of the board is to predict domestic demand and allocate quota to producers to meet this demand. Ideally, this will prevent price swings and provide a stable business environment for both farmers and consumers. The marketing boards establish a price for the commodities that is high enough to cover production costs plus a profit. The boards also control imports. Predictably, this system has changed in recent years. For example, the Canadian Government used to charge a levy against farmers who produced more than their quota. Under W T O rules, this levy became illegal (Barichello 8B Romain, 1996, p. 166). In addition, farmers used to receive a $6.03 per hectolitre (hi) subsidy for industrial milk product ion . 5 3 In August of 1993 this was reduced to $5.42 per hi, though the consumer made up the shortfall through a price-hike at the supermarket (the loss of this subsidy was not directly related to the WTO). The federal budget in 1995 reduced this a further 30 per cent, and in 1996, this subsidy began to be phased out entirely. At this time, new tariffs were imposed on dairy imports (Agriculture and Agri-Food Canada, 1996, p. 45). Unti l the mid-1990s, marketing boards limited foreign competition through quantitative import restrictions. Under the World Trade Organization, this was changed to a system of tariffs (British Columbia Ministry of Agriculture Fisheries and Food, 1995, p. 4). Despite these changes, none of the trade agreements signed since 1988 have had a significant impact on the shape of the Canadian dairy industry and this system still controls foreign competition (Agriculture and Agri-Food Canada, 1996, p. 151). Although dairy is Canada's second largest agricultural industry, less that 1 per cent of Canada's total international agri-food trade is from these products (Agriculture and Agri-Food Canada, 1996, p. 19 8B 27). Agriculture and Agri-food Canada, suggest, however, that this will change and the trade deals signed so far lay the foundation for a future reorganization within the industry (Agriculture and Agri-Food Canada, 1996, p. 16). DATA FROM T H E L O W E R F R A S E R V A L L E Y There are two key characteristics of the livestock industry in the Lower Fraser Valley relevant to this study. First, as described earlier in this thesis, 5 3 Industrial milk refers to milk used to produce cheese, ice cream, and other dairy products. Fluid milk refers to the milk consumers drink such as 1 per cent or skim. Farms used to obtain different quotas for industrial and fluid milk though in B.C. they are now pooled together. The Ecologies of Scale Evan D. G . Fraser 122 horticultural farms are geographically separate from livestock operations. Horticulture is concentrated at the mouth of the Fraser River. Poultry and dairy operations are densely clustered up the valley where they are surrounded by raspberries . 5 4 Second, livestock production has grown more intensive over time and is now concentrated on m u c h larger farms than in the past. Figure 7-1 shows that, in terms of income, large livestock farms dominate B . C . , while small horticultural farms are the norm. Aggregate, Canada-wide statistics support this position. In Canada in 1995, farms had an average net operating income of $23,977 before depreciation (Agriculture and Agri-Food Canada, 1995). 5 5 In 1995 poultry and egg farmers earned well above the national farm average and took home $50,523 before depreciation. Fruit and vegetable farms earned below the average and had incomes of $21,342. Dairy farmers were also well above average with an average income of $48,558 (Agriculture and Agri-Food Canada, 1995). Not only are these livestock operations earning more than their horticultural counterparts, they also have been growing larger over time, while horticultural farms in the Lower Fraser Valley have shrunk and become more numerous. Barichello, and Romain point out that the number of dairy farms has declined in all provinces since 1975 and herd size has increased. In B . C . for example, the average herd size was just under 50 cows per farm when the Canadian Dairy Commission was established. By the mid 1990s there was an average of approximately 70 cows per farm in British C o l u m b i a . 5 6 According the 1986, 1991, and 1996 Canadian censuses, the number of cattle in West Delta, the heart of the horticulture region, dropped from approximately 2500 cows to just 800. Chickens, which were never very numerous in Delta area, dropped to less than 1000 birds. To the east, Abbotsford is now home to 18,000 dairy cattle and 600,000 chickens. Adjacent census regions are no different. East Chilliwack had roughly 21,000 cattle and 800,000 chickens, and West Chilliwack supports 8,500 cattle and 5 4 As noted earlier in this thesis, there are three environmental problems with raspberries. (1) although raspberries are a perennial species, they are grown in large monocultures, with tilled alleys between the rows. This can damage soil structure. (2) they have replaced old pasture lands. The organic matter that had accumulated in these pastures has now been ploughed under, creating a pulse of nitrogen pollution. (3) Very little nitrogen is contained in the actual berry. Therefore, this crop does not remove nitrogen in the poultry and dairy manure that is spread on these fields. 5 5 This was up slightly from $23,561 in 1995 (Agriculture and Agri-Food Canada, 1999) and $19,052 in 1992 (Agriculture and Agri-Food Canada, 1992). These figures gloss over the fact that the income for small farms declined throughout this period while large "commercial farm" income increased (Agriculture and Agri-Food Canada, 1999). 5 6 As noted in the last chapter, the figure of 70 cows per farm probably represents a considerable underestimate. Barichello (personal communication) suggests that if only commercial farms are included the average dairy herd would be closer to 100 cows per farm. For example, Bomke, Kennedy and Tait suggest that there are approximately 800 dairy farms and a total of 80,000 cows in B.C., yielding an average of 100 cows per farm (Bomke, Kennedy, & Tait, 1999, p. 69) The Ecologies of Scale Evan D. G . Fraser 123 630,000 chickens. As a result, more manure is produced on less land in the East of the Lower Fraser Valley. This manure interacts with local soil conditions and creates a number of water pollution problems. Many dairy farms, such as those in Chilliwack, are on relatively deep silt loam soils. In this situation, seasonally shallow water tables and flooding may result in surface runoff and drain nutrients and pathogens (such as E. coh) into surface water such as streams and ditches. Alternatively, some of the livestock farms in the Lower Fraser Valley sit on the Abbotsford Aquifer, the largest and most extensively-used unconfined groundwater aquifer in the valley (Environment Canada, 2000, electronic source). The Abbotsford Aquifer also straddles the U.S.-Canada border and provides water to over 100,000 people in the Abbotsford region and in north central Whatcom County of Washington State, USA. Because this water flows southward from Canada to the USA, some communities in Washington State worry that nitrate levels on the Canadian side are polluting American drinking water (Environment Canada, 2000, electronic source). Environment Canada has observed nitrate contamination in this aquifer since the 1950s, though they only began intensively studying the problem in 1992. Since 1992, nitrate levels have regularly exceeded the 10 mg/L Guideline for Canadian Drinking Water Quality and, of 1,526 groundwater samples collected from monitoring wells between 1992 and 2000, 70 per cent exceeded this guideline (Environment Canada, 2000, electronic source). According to an Environment Canada website, individual tests returned values ranging from a low of 0.025 mg/L to a high of 91.9 mg/L, with average values ranging well above Canada's suggested safe levels fhttp: / /ecoinfo.org/env ind/region/nitrate/nitrate.htm).5 7 Work done by Zebarth et. al. (1998), suggest that intensive agriculture has contributed to groundwater pollution since nitrogen surpluses in this region are due to intensive livestock production. According to Zebarth et. al, in 1971 there was 134 excess kg of N per cropped hectare over the Abbotsford Aquifer (Zebarth et al., 1998, p 99-112).5 8 By 1981, this had risen to 185 kg/ha, and by 1991 it was 245 kg/ha (Zebarth et al., 1998 p. 99-112). To systematically assess the environmental impact of this information Schreier et. al. analyze livestock densities through livestock equivalent units per ha (LEU/ha). One livestock equivalent unit is equal to the average waste produced by: • 1 cow. • 4 sows. 5 7 Nitrate pollution contributes to "blue baby" syndrome, where the blood is unable to carry oxygen. There is also some concern that high rates of nitrates in ground water can increase the r isk of some types of cancer. Nitrate is also a major nutrient for aquatic vegetation a n d can result in excessive growth of algae, fungi a n d other aquatic plants. T h i s can destroy valuable fish habitat (Environment C a n a d a , 2000, electronic source). 5 8 S u r p l u s Nitrogen refers to the amount of plant-available nitrogen in excess of crop requirement per hectare. The Ecologies of Scale Evan D. G. Fraser 124 • 125 laying hens. • 300 pullet per turkey broilers. • 1000 chicken broilers. • 1 horse. • 4 sheep. According to their work, Delta has about 0.5 L E U s / h a , while Abbotsford, and East and West Chilliwack have roughly six times this concentration, or about 3 L E U s / h a (Schreier et al., 2000, electronic source). Schreier et.al. conclude that this has resulted in nitrogen excesses between l O O k g / h a and 200 k g / h a in most of this region (table 7-1). The Ecologies of Scale Evan D. G . Fraser 125 Figure 7-1 Distribution of B.C. dairy, cattle, poultry and fruit farms by income class. Dairy Cattle Poultry & Egg Fruit and Vegetable • $10,000-24,999 E 25,000-49,999 • 50,000-99,999 E 100,000-249,999 250,000-499,999 • 500,000+ Income class ($ Cdn./year) Source: Canada, 1995 The Ecologies of Scale Evan D. G. Fraser 126 Table 7-1 Kg of surplus nutrients in the Lower Fraser Valley. Surplus N Surplus P Region Kg 1996 Kg 1996 South Langley >100 >50 West Matsqui >100 >50 South Matsqui >100 >100 North Matsqui >100 >50 West Chilliwack >100 >50 Abbotsford >100 >50 Source: Schreier et al., 2000. The Ecologies of Scale Evan D. G . Fraser 127 DISCUSSION Based on these data, a picture emerges of (relatively) high-paid poultry and dairy farms protected by the government. These farms have grown so large and concentrated that they cause serious water pollution. In contrast, data presented in the last chapter suggests that lower-income horticultural farmers at the mouth of the Fraser River must compete with the well-organized Californian producing, processing, and transportation industry and have made the first steps towards reducing their impact on the environment. C a n we conclude that supply management has caused these problems and blame government protection for environmental problems in general? In order to answer this question we need to see if the trend towards larger units has happened in regions that do not have the same degree of governmental protection. If this is the case, we will need an alternative explanation for these data. To answer this, we will (1) look at changes in herd size and concentration for B . C . before the Canadian Dairy Commission was established; (2) examine herd size in the two leading U.S . milk producing states, California and Wisconsin; and (3) apply the final theory presented in chapter four, that the nature of certain farm commodities creates incentives for some farms to become very large. Trends in herd size: British Columbia The pattern of farms in the Lower Fraser Valley until WWII was of mixed livestock-horticultural farms, where a farmer would plant a variety of grain and vegetable crops in rotation with enough pasture to support a small number of dairy cows. By the late 1940s, this system had begun to break down. By investing in specialized equipment that reduces the cost of producing a small number of crops, Canadian farms grew larger and more efficient after WWII (Wilson, 1990; Winson, 1992). This meant that either farmers concentrated in livestock production or horticulture as each require expensive and specialized equipment. The huge investment for barns to raise animals, and for machinery to harvest field crops, made it difficult for a farmer to raise both kinds of commodities and still be cost-effective. Rather, farmers who could afford this equipment were able to achieve economies of scale, reduce costs, and put their competitors out of business. One of signs of this transition was the concentration of the dairy industry, which Demeritt considers to be the "...single most telling barometer of the changing pressures on agriculture in British Columbia ..." (Demeritt, 1997). The development of the transportation infrastructure facilitated this transition. First, an electric railway linked Vancouver with Chilliwack in 1910. This allowed farmers well up into the valley (where land values are lower) to concentrate on dairy and sell into the big Vancouver market (Demeritt, 1997). Second, the trans-Canada highway, completed in the 1960s, linked the wealthy Vancouver market to even remoter rural areas. Combined with better storage facilities and refrigeration, the highway allowed dairy farmers in areas where land values were lower to ship produce into the The Ecologies of Scale Evan D. G . Fraser 128 Vancouver market. This increased the pressure on farmers to specialize in only horticulture or livestock thus allowing them to capitalize on economies of scale. In addition to the supply management system, other government policies also promoted this process. During the 1950s, the government imposed higher sanitary regulations on dairy that made it especially difficult for small mixed farmers to keep their herds of cattle. In 1956, the "Milk Industry Act," made milk tanks mandatory for all dairy farms, and introduced dairy inspectors to oversee these standards. Smaller farmers who could not afford the capital investment sold their herds. As the industry adapted to these changes, the number of farms with dairy cows decreased while herd sizes increased. In 1966, the year the Canadian federal government created the Canadian Dairy Commission to help coordinate provincial marketing boards, the B . C . Department of Agriculture noted that the dairy industry was (a) becoming more concentrated and (b) shifting up the Fraser river to the east of Vancouver. This report highlights a similar transition in the poultry industry (Table 7-2, British Columbia Department of Agriculture, 1966). At the start of the twentieth century, poultry production had been spread around Vancouver, Burnaby and New Westminster (two suburbs immediately adjacent to Vancouver). By 1966, it had shifted east to Matsqui, Langley, and Surrey. Consequently, the trend towards larger and more intensive livestock farms started long before the marketing boards were established. Trends in herd size: United States In the U.S . , the degree of government protection of dairy and poultry is m u c h less than in Canada, though there are a number of federal programmes that support farm income for dairy producers (Butler & Wolf, 2000, p. 146). Since the 1970s, there has been a massive consolidation of milk production, and dairy farms with 1000-2000 cows are common in some parts of the U.S . (Knutson 8B Loyns, 1996, p. 3). California went from producing 8 per cent of American milk to 18 per cent between 1970 and 1998. Accompanying this increase in production, herd size grew in this state from 39 cows/farm in 1959 to 530 cows/farm in 1999 (Butler 8B Wolf, 2000, p. 141 8B 145). According to Butler and Wolf (2000), this increase was a result of a number of unique circumstances, including government policy. They conclude however, that the effect of state and federal agricultural policies, "... have been greatly exaggerated" (Butler 8B Wolf, 2000, p. 159). According to these authors, favourable climate, a huge local population that creates demand for dairy products, a transportation infrastructure that allows grain to be cheaply shipped for feed, and technological advances have created the conditions where farms have been able to grow very large (Butler 8B Wolf, 2000, p. 160). Unti l the mid 1990s, when California producers over-took it, Wisconsin dominated U.S . milk production. Unlike California, however, herd size is m u c h more modest. According to Jackson-Smith and B a r h a m (2000), medium-sized, diversified, family-labour farms have long defined this region The Ecologies of Scale Evan D. G . Fraser 129 and, until recently, Wisconsin only had a "handful of large dairy farms that rely heavily on hired labour" (Jackson-Smith 8& Barham, 2000, p. 115). Today, Wisconsin's average dairy herd is only 59 cows per farm, which is below the U.S. national average (78 cows per farm) and less than B.C. (roughly 70 cows per farm) (Jackson-Smith 6s Barham, 2000, p. 116; Butler 8& Wolf, 2000, p. 145; Agriculture and Agri-Food Canada, 1996, p. 221). Aggregate statistics, however, mask a trend throughout the 1990s in Wisconsin towards larger farms (table 7-3). Typical of the rest of North America, Wisconsin dairy farmers have experienced considerable changes in herd size, cropping patterns, the division of labour and technology. Although there was an 8 per cent decrease in the total number of diary farms, and farms with less than thirty cows declined by close to 40 per cent, there was a 9 per cent increase in the number of farms with over two hundred cows. As a result, it seems that no matter what the governmental regime, herd size across North America has expanded. While this is most dramatic in California, even Wisconsin, which has an agricultural economy built on small and medium family-farms, is no exception. The growth and concentration of B.C.'s industry cannot be seen as merely a cause of governmental protection, and must be seen in terms of broader trends that impact this industry. The Ecologies of Scale Evan D. G. Fraser 130 Table 7-2 Cow density on B.C. farms between 1941 and 1964. Year # of cows in British Columbia # of farms Cows / farm with cows 1941 62602 6105 10.25 1951 51819 6526 7.94 1961 62402 6047 10.32 1962 57000 — --1964 58000 2000 29.00 Source: British Columbia Department of Agriculture, 1966, p. 16. The Ecologies of Scale Evan D. G . Fraser 131 Table 7-3 Changes in the size and production of the U.S. and Wisconsin dairy industry, 1993-1998. Changes 1993-1998 Farms 1998 Net Percent by herd total Change change size U S A Wisconsin U S A Wisconsin U S A Wisconsin <30 35690 43000 -22940 -2000 -39.1 -31.7 cows 30-49 25155 7300 -9655 -2990 -27.7 -29.1 50-99 34277 8900 -7833 -1900 -18.6 -17.6 100-199 13748 1950 -882 -340 -6 -14.8 200+ 7560 550 +590 +230 +8.5 +71.9 Total 116430 23000 -40720 -7000 -25.9 -23.3 Farms Source: Milk Cows and Production: Final Estimates, 1994-1997, U S D A / N A S S Statistical Bulletin #952, 1999; also published figures for 1998 from http: / /usda.mannlib.Cornell .edu / reports / nassr / dairy / pmp-bb / quoted in Jackson-Smith 8s Barham, 2000, p. 117. The Ecologies of Scale Evan D. G . Fraser 132 Alternative explanation We need an alternative explanation to explain the growth of dairy and poultry operations. To find this explanation we will return to the final theory suggested in chapter four of this thesis. This discussion cited scholars who suggest some farm commodities are naturally suited to large economies of scale in factory-like operations that are removed from environmental considerations. These farms tend to produce environmental problems. Other farm commodities are naturally suited to farms that integrate into local ecological systems. These products favour more environmentally sensitive management practices. This argument, put forward by Allen and Leuk (2000), suggests that if manufacturing a specific product requires a number of short and easily stardardized steps, then that product will be efficiently produced on large factory-like farms. If a farm product takes a long time to produce, and the tasks that go into its production require careful and exact timing, then farms will remain small. Allen and Leuk suggest that cattle feedlots and cow-calf operations provide an example of these two types of farm. To raise beef cattle on a feedlot, the farmer only has to provide regular veterinary care and food. By staggering the age of cattle, animals are regularly coming ready for slaughter and provide a constant source of income. In this situation, there are fewer economic risks associated with farming and it is possible to hire labour that specializes in particular tasks. As a result, feedlots across North America enjoy economies of scale, have attracted capital investment, grown very large, and create serious environmental problems. Cow-calf operations illustrate the opposite process. A cow-calf ranch raises a calf from birth until it is weaned and sold to a feedlot. The production cycle, therefore, is approximately 1 year, and it is very difficult to standardize the timing of when cows give birth. To this day, cow-calf operations remain quite small (see chapter four for a more detailed discussion on this). As a result, industrialized farms specialize in commodities that they manufacture quickly and can maintain continuous production. The activities that go into the production of these commodities tend to be broken into a series of small steps occurring at regular periods. Non-industrialized farms require on-the-spot decision-making, and have a relatively high degree of risk. When we apply this model to the types of agriculture in the Lower Fraser Valley, it is clear that broiler chicken farms exemplify the industrial farm model. Typically, farmers obtain chicks when they are a few days old, and keep them for a designated number of days (usually approximately 40 days). Dur ing this period, the farmer only needs to feed the chickens regularly, remove dead animals, and ensure that the climate in the barn is constant. Computers control the climate, and most chicken producers have two or three barns, each at different stages of production, to ensure that chicks are always maturing and being picked up for slaughter. Because of this regularity, it is easy for a chicken farmer to divide tasks and train individual workers to specialize in one job or another. Because it is possible to divide labour in this way, chicken farms have many similarities with Henry The Ecologies of Scale Evan D. G . Fraser 133 Ford's assembly line. Dairy farms also have many similarities with this model. By investing in barns and milking machines, farmers can control the jobs that they must do to produce milk. Regardless of governmental programmes, these products are naturally suited to large-scale intensive production. Horticultural farms, however, produce slow-maturing commodities that require a greater diversity of tasks to complete. Horticultural farmers in B . C . only obtain one crop per year (though some crops can be planted throughout the summer season to lengthen the harvest period). Vegetable farmers must also respond immediately to changes in the weather, the market, and ecological conditions when deciding to, plant, harvest, apply sprays, irrigate, plough or till. For example, some sprays, such as those that prevent weed seeds from germinating, must be applied immediately before a rain so that they wash into the soil. To use these sprays effectively, the farmers must constantly watch the weather in order to apply this chemical no more than a few hours before a rainfall. Glyphosate herbicides such as "roundup" enter the plant through the leaves. As a result, if roundup is applied before a rain, the chemical will wash off the plant. Roundup is also ineffective during very hot weather, since the stomata of the leaves close in high temperatures to conserve moisture and the chemical does not enter the plant. The jobs required to bring a horticultural crop to harvest in the Lower Fraser Valley do not suit standardization. As a result, vegetable farmers cannot r u n their farms like an assembly line since they must respond to m u c h more variable climate conditions than their southern counterparts. Small errors in timing such tasks as spraying or harvesting can result in big losses to the farmer. This makes it costly to contract spraying out to workers who specialize in this type of job (Allen 85 Luek, 2 0 0 0 ) . Given these observations, one reason that dairy and poultry farms have become concentrated is due to the nature of the products they produce. This is not to say that government programmes do not play a role. Indeed, the marketing board system means that there are limitations on the quota that is available at any given time and is expensive to obtain. Rather, a number of factors, which include the nature of the products as well as government programmes and technological innovation account for the changes in B.C.'s livestock industry. SUMMARY AND CONCLUSION This chapter began with the hypothesis that government protection creates a false sense of security that leads farmers to specialize on non-ecological types of agriculture. To test this hypothesis, data from B . C . showed that despite the overall reduction in government support since 1988 poultry, eggs, and dairy farmers are still protected under a supply management system that allocates production quota, fixes prices, and limits international competition. Since this system was established, livestock farms have become larger and geographically concentrated in the central and eastern end of the Lower Fraser Valley. There, these farms contribute to serious groundwater The Ecologies of Scale Evan D. G . Fraser 134 pollution. In order to see whether we could infer that government protection caused these environmental problems, we examined data on herd size and density in B . C . from the decades leading up to when the supply management system was established. These data illustrate that the trend toward larger farms started before this government policy. A n evaluation of the historic context for agriculture in the province suggests that a combination of factors, which includes government programmes and technology have contributed to increasing livestock concentrations. Data from Wisconsin and California, the two leading U.S . milk producing states, also show a similar concentration in the industry. This led us to investigate whether the nature of poultry and dairy commodities allow large, intensive farms to produce these commodities. According to the literature, industrial farms will favour products that can be manufactured in a short amount of time, with simple routine steps. Products with longer production cycles and steps that must be carefully timed will be most efficiently produced on small farms. Since poultry and dairy farms produce a continuous product and require regular steps, it is possible that the growth of these farms can be at least partially explained by the nature of these products. These data suggest the following progression. The nature of livestock is such that it is suited to intensive production. Technological advances, specifically better storage and transport, and cheap energy, provided the capacity to implement this intensive production. Government programmes, in this case the sanitary measures requiring more advanced storage facilities and marketing boards, provide the incentives for farmers to make this capital investment. The consequence is that livestock farms have grown larger and create environmental problems. These problems are environmental externalities and do not translate into increased costs for either the consumer or the farmer. It is impossible to isolate the supply management system within this broader system of incentives. Instead, we conclude that a number of factors have led to the situation today where livestock farms cause nitrate pollution in communities' water supplies. The Ecologies of Scale Evan D. G . Fraser 135 CONCLUSION TO PART III: ANALYSIS Th is sect ion has attempted to move beyond the exist ing l i terature on agr icul ture to test the impact that social and economic factors have on the environment. To summar ize , four different theoret ical explanat ions were tested u s i n g data f rom the Lower Fraser Val ley: (1) insecure land tenure leads to poor env i ronmenta l management. (2) in ternat ional trade leads to poor management . (3) government protect ion leads to poor management. (4) poor management is a resul t of the nature of specif ic farm products . F r o m the s tudy on land tenure, key f indings suggest that farmers mus t own their l and to invest i n long-term management and publ ic goods. However, special programmes can create f inancia l incent ives to promote pub l ic goods that over-ride the negative effect of insecure land tenure. F r o m the s tudy on in ternat ional trade, the key f inding is that in ternat ional trade has not itself led to worse management. However, intense compet i t ion f rom unsus ta inab le hor t i cu l tu ra l producers in Cal i fo rn ia has led to a reorganizat ion of the process ing indust ry . Th is has left B . C . farmers vulnerable and wi thout their t radi t ional markets . Some have turned to more ecological pract ices and found a new source of income in organic product ion. The study on government protect ion i l lust rated that government programmes, in combinat ion w i th the nature of farm commodi t ies and technological advances, have created condi t ions that favour an un-ecological scale of l ivestock farming. Overa l l , the analys is suggests that poor env i ronmenta l management on farms is not a resul t of any one of these, but emerges due to a combinat ion of factors. The role of f inanc ia l and economic r isk , however, r u n s throughout a l l of these resul ts . Secure land tenure reduces the r isk that a farmer wi l l not benefit f rom long-term management. Government subs id ies reduce the r isk of crop fai lure a n d farm income variabi l i ty. F a r m inpu ts l ike i r r igat ion pest ic ides and ferti l izer reduce r isk because they al low farmers to contro l env i ronmenta l var iables. If a farmer invests in i r r igat ion, spreads ferti l izer, or moves l ivestock f rom pastures to a ba rn , they exert contro l over var iables that h a d previously been out of their ju r isd ic t ion . Storage and t ransportat ion technologies reduce the r isk that commodi t ies wi l l spoi l on their way to the consumer . Reduc ing these r i sks has both posit ive and negative aspects. O n the posit ive side, the more var iables a farmer can contro l , the more stable their envi ronment. If a farmer has i r r igat ion, she or he does not have to worry about droughts. Farmers w i th long-term land tenure wi l l not worry that their l and wi l l be put to some other use or leased to a different farmer. If a farmer has a long-term contract w i th a processor, or a guaranteed income from the government, then incomes shou ld remain stable. In a l l of these s i tuat ions, a reduct ion i n r i sk means that farmers wi l l not worry about year-to-year market or env i ronmenta l changes and wi l l have the opportuni ty to make the long-term p lans needed for susta inable farming. There seems to be a point, however, when technology, the nature of fa rm commodi t ies, indust ry organizat ion, and pol icy reduce r i sks so m u c h The Ecologies of Scale E v a n D. G . Fraser 136 that farmers have incentives to ignore ecological limits and specialize in highly profitable but ecologically fragile or unsustainable practices. For example, government policy and the technology used in milk production allow the farmer to control a huge number of variables and be protected from changes in the market. This has contributed to a consolidation of milk herds across North America over the century. The low risks and high financial reward associated with livestock provide incentives for farmers to increase their herds beyond a level that is ecologically acceptable. In California, a combination of a huge local market that creates a continuous and enormous demand for farm products and irrigation technology that eliminates the threat of drought and year-round growing condit ions, 5 9 have reduced the risks associated with horticulture farming. Low risks and high returns allow vegetable farms to grow very large, very specialized and create serious environmental problems. In B . C . , the opposite has occurred. For horticulture, the risks associated with farming have increased: farm income has dropped, government protection has dwindled, and traditional markets have vanished. Farmers are vulnerable. In order to reduce this vulnerability, some farmers have switched to more ecological-based farming practices, thus lowering the chance that environmental conditions will destroy their crops. Horticultural farmers in B . C . have also discovered that there are new market opportunities for organic production. The cases of B.C.'s and California's vegetable industries show that increasing and decreasing risks can also be reinforcing. Due to natural advantages there have always been less risks associated with vegetable farming in California than in B . C . Deep-well irrigation technology, developed early in the twentieth century, increased farmers control of the environment and further reduced the risks in California. Thus , agriculture in California is a better investment than B . C . with its shorter growing season, smaller market, and variable rainfall. California producers were able to capitalize on this, and North America's processing industry has shifted from the Northeast, where it was historically based out of Chicago and New York, to the Southwest, where it now resides in California. This has further reduced risks for farmers in this state who now have the majority of the continent's processors and retailers. This illustrates how low risks attracted investment and led to even lower risks. In B . C . , the traditional processing industry has almost entirely left the province, thereby increasing the risks associated with horticulture. It is clear then, that risk-averting behaviour in California has led to major environmental problems while horticultural farmers in B . C . , have adopted better environmental management in response to the increased levels of financial and environmental risks that they face. 5 9 Until wells run dry and groundwater sources are fully exploited. The Ecologies of Scale Evan D. G . Fraser 137 P A R T I V - C O N C L U S I O N S This thesis has tried to answer the question: "why does poor environmental management continue on farms in light of the fact that there are good scientific and technological solutions?" To answer this, research was divided into three sections. Part I established a theoretical framework based on the sustainable agriculture and environmental economics literature to approach this problem. Part II established hypotheses about land tenure, international trade, and government protection of agriculture. Part IH then tested these hypotheses using data from the Lower Fraser Valley. This found that a combination of factors increase and decrease the risks of farming and this has created a system that favours a non-ecological approach to farming in some cases and a more ecological approach in others. The Ecologies of Scale Evan D. G. Fraser 138 CONCLUSION SUMMARY OF R E S E A R C H It is now time to summarize this work, and develop the themes that have r u n through this thesis. We began with the basic question: since the science of farming is well understood, why do farmers still use environmentally poor management practices? For example, calculating the amount of nitrogen fertilizer required by a crop is relatively simple, yet across North America nitrogen in regularly over-applied and causes serious ground water pollution. In order to answer this question, we focused our attention on the Lower Fraser Valley, a productive agricultural area adjacent to Vancouver Canada. This ecologically sensitive region is undergoing serious changes that reflect many of the issues that frame agriculture around the world. As a result, it provides an interesting laboratory where we can test the influence of global trade, governmental policy, and land tenure. To approach this topic, this thesis was divided into three main sections: conceptual framework, possible explanations, and analysis. Part I - conceptual framework To systematically investigate the forces that shape farming, it is necessary to develop a conceptual framework. Two bodies of literature came into play. First, the literature on sustainable agriculture helped develop an "ecosystem approach" to farming. This literature suggests that farms should be viewed as ecosystems that are governed by nutrient cycles and contain biodiversity. This approach helps highlight the underlying cause of environmental problems. By viewing farms as highly managed ecosystems we can observe that farms have low-biodiversity. In agricultural systems, nutrients, which are usually cycled between animal and plant species over a relatively small geographic area, are not cycled at all. Rather they are extracted from one area and pool as waste where the product is consumed. By monitoring a farm's biodiversity and nutrient flows, it is then possible to suggest if that farm has become more or less biologically sustainable over a period of time. The second body of literature used to analyse the forces that shape modern agriculture comes from the school of "environmental economics." Three important points come out of this literature. First, it suggests that the private markets do not necessarily value environmental or social problems. Often the environmental costs of manufacturing are external to the price that a consumer pays. As a result, farmers may be able to produce commodities cheaper by using practices that pollutes the environment. Second, insecure land tenure, low income, or an uncertain future, may induce a farmer to take a short-term view of farming and adopt a short planning horizon. In economic terms, unless farmers have confidence that they will be farming on a particular piece of land for a long time, they will heavily "discount" the future The Ecologies of Scale Evan D. G . Fraser 139 and maximize short-term profit at the expense of long term sustainability. Third , environmental economics show that a resource can provide different types of goods. For example, farmland can produce both food and wildlife habitat. Food is a private good because a farmer can control its distribution and sell it for a profit. Wildlife habitat, unless a farmer can sell hunting or wildlife viewing privileges, is a public good because a farmer cannot control who benefits from it and cannot derive a profit. Farmland, therefore, tends to be managed to produce only the private good. The public good, although it is environmentally beneficial, is not sufficiently valued by farmers. These two bodies of literature together provide the intellectual tools to systematically evaluate the problems of farming in the Lower Fraser Valley. The ecosystem approach helps us understand environmental problems in terms of their root ecological causes. It also provides indicators to evaluate whether a farm or agricultural region is becoming more or less sustainable over time. Environmental economics helps us understand these same problems in terms of economic incentives to bad management. This literature helps highlight when our socio-economic systems constrain farmers or make environmentally bad management rational. Together these two schools provide us with the tools to link social and economic factors with environmental problems. Part U - possible explanations The first task was to demonstrate that farmers are not to blame for the environmental problems caused by their farms. This was done in three ways: first, comments made by farmers indicate a concern for the environment and an understanding of sustainable agriculture. Second, none of the key stakeholder groups in B . C . agriculture suggest that farmers are themselves responsible for the environmental problems that agriculture creates. Third , farmers' actions, as recorded by the Canadian census indicate that farmers now use more soil conservation practices than in the past. Based on this appraisal, this thesis has examined what social and economic forces influence or constrain farmers so that they use poor management. Stakeholder comments, and the academic literature provide four possible explanations that might account for continued poor management on farms in the Lower Fraser Valley. First, there is a general agreement that unless farmers have secure land tenure they will discount the future excessively, externalise environmental costs, and maximize short-term profit at the expense of long-term sustainability. The second possible explanation is that global trade creates incentives for bad management and the third is that government protection favours bad management. Some academic authors suggest that trade will lead to massive specialization on farms and promote ecologically fragile monocultures. Others point to data that show government subsidies lead farmers to specialize in only those crops that government policies support. One school of thought argues that increased trade will increase biodiversity. The other school suggests the opposite. The Ecologies of Scale Evan D. G . Fraser 140 In order to tease apart the contradictions in the literature we applied data from the Lower Fraser Valley. To test the role of land tenure, we compare crop history on owner-operated fields with rented fields with different lengths of leases. In this analysis, we discovered that rented fields have more erosion and compaction-promoting annual crops while owned fields have more perennials that help prevent soil erosion. This is consistent with what we would expect from the literature on land tenure. We also, however, discovered that grasslands, one of the most important components of a sustainable crop rotation, do not vary with the land tenure. Because grasslands offer no direct financial gain to farmers, we would only expect grasslands to be planted by farmers who own their land. A programme r u n by a local farm and environmental organization to promote wildlife habitat by paying farmers to establish grasslands explains this anomaly. The "grass land set-aside programme" creates an economic value for this public good and provides farmers with the opportunity to let the land (whether it is rented or owned) recover fertility. Data from the Fraser Valley illustrate the impact of global trade and governmental policies and reflects the confusion in the literature. Relatively rich dairy and poultry farmers in the eastern part of the valley enjoy governmental protection because their commodities are managed through a complex system of marketing and import quotas. This system regulates both the amount of a product that a farmer can sell and the price they receive. Less prosperous horticultural farmers in the west of this region must compete with products from all over the world and receive little in the way of governmental support. Evidence suggests that these horticultural farmers are becoming more environmentally sustainable. Census data illustrate that they have increased their use of soil conservation measures and aggregate measures of crop diversity show increased diversification over recent years. Global trade drives many of these changes. Because B . C . farmers have difficulty competing with low-priced produce from elsewhere in the world, the processing and retail industry have moved from B . C . to regions where they can obtain year-round low-priced commodities. This has begun a negative cycle because, once the infrastructure that supports the agri-food industry starts to diminish, it becomes even more difficult for remaining firms to stay in business. The price of production rises, and the infrastructure further diminishes. This has reduced the market for a number of key crops that farmers used to depend on. As a result, the acreage of these key crops has declined and farmers have diversified, expanding into non-traditional markets including organic produce. The changes that have rocked the agri-food industry have had push and pull forces. The push factors are low incomes that mean that farmers sometimes can no longer afford high-cost inputs and must rely on more "natural" methods such as growing clover to fix atmospheric nitrogen instead of spreading chemical fertilizer. The pull factors are the development of the organic food and other niche markets that offer a premium for food produced with environmentally-responsible practices. In order for a farmer to take The Ecologies of Scale Evan D. G . Fraser 141 advantage of these new niche markets, they must be certified as organic growers. In order to qualify for this certification, any field where organic vegetables are produced must have been free of chemical inputs for three years. The grassland set-aside programme provides an opportunity for farmers who only have a short-term lease to take land out of production for this period and earn enough cash to cover basic costs. This allows the field to qualify for organic production and build up organic matter. When it comes to the crops protected by marketing boards, the opposite has occurred. These livestock farms have grown larger and more concentrated in the eastern half of the Lower Fraser Valley. However, livestock farms across North America have grown larger and more concentrated because these farm commodities are naturally suited to large-scale production that ignores environmental costs. While government controlled marketing boards have played a role, it would be wrong to blame them entirely. Instead a combination of factors, ranging from technological change, to the nature of the farm commodity and government policy has created a system that favours certain types of farm. For poultry and dairy in the Fraser Valley, these forces have supported large operations that impose environmental costs on others. OVERARCHING CONCLUSIONS Three overarching conclusions that can be drawn from this research: Conclusion # 1: Interaction between influences The first conclusion is that it is impossible to investigate large-scale forces like the role of government programmes or global trade in isolation. These forces interact in sometimes surprising ways to create incentives that can lead to bad management. The sum of these interactions creates the system in which individual resource managers operate. This system creates incentives that promote some types of management and discourage others. If environmental and social costs are external to the market any system based on the capitalist market will fail to encourage good environmental management no matter how conscientious the individual. For example, amongst the highest paid farmers in the Lower Fraser Valley are those dairy and poultry farmers who operate in the supply management quota system. Their gross incomes are more or less guaranteed through a government programme, but this is without regard for environmental constraints. Similarly, the California horticulture empire has created a system that is based on unsustainable practices. As this region grew in power over the last century, it has attracted a huge amount of the processing infrastructure to support it. This has reinforced external environmental costs. As a result, it is impossible to consider government programmes or global trade separately. Instead, they must be analysed at the same time. This creates a great deal of complexity and makes it impossible to neatly test the statistical relevance of each factor. However, an analysis that The Ecologies of Scale Evan D. G . Fraser 142 combines all these threads together will have a greater chance of observing underlying trends more accurately. Conclusion #2: Local context The second conclusion is that when we analyze environmental problems it is necessary to understand local conditions and not to generalize the possible ecological consequences of forces like global trade based on aggregate data. One reason that there are so many theoretical discrepancies about the anticipated impact of trade on the environment is that the theories devised by social scientists and economists are insensitive to small-scale environmental variation. Except for a few truly global environmental problems (like ozone depletion and climate change), many environmental problems are inherently local. The loss of biodiversity, water pollution, habitat loss, and soil erosion all happen in small areas. The fact that these problems are common to many regions around the planet creates the impression that they are global problems. However, each manifestation of these problems is local and is the result of local circumstances and actors. Consequently, one of the great challenges behind understanding the impact of global forces like trade is to establish causal relationships between phenomena that operate on very different scales. Conclusion #3: Optimum levels of risk. Financial and economic risk is a theme that emerges from all the analyses. For example: 1. Insecure land tenure creates a risk that a farmer will not benefit from long-term management. 2. Government subsidies change the risk of crop failure and farm income variability. 3. F a r m inputs reduce risk because they allow farmers to control environmental variables. 4. Storage and transportation technologies reduce the risk that commodities will spoil on their way to market, and extend the distance that food can travel between field and consumer. These risks have positive and negative impacts on environmental management. The more variables a farmer can control, the more stable their environment. California farmers, for example, are able to control the water their plants receive through irrigation. Farmers with guaranteed contracts expect stable incomes. In all of these situations, a reduction in risk means that farmers will not worry about market or environmental fluctuations and be able make the long-term plans needed for sustainable farming. In some instances, however, technology, the nature of farm commodities, industry organization, and policy reduce risks so m u c h that farmers have incentive to ignore ecological limits and specialize in highly profitable but ecologically fragile or unsustainable practices. As a result, this research has uncovered preliminary evidence that suggests that risk plays a significant role in determining good farm The Ecologies of Scale Evan D. G . Fraser 143 management. If farmers are able to rely on government protection or a dominant position in the market, then they will be able to maximize profitability by using ecologically damaging management, without concern that they will lose their income. Conversely, if farmers do not have secure land tenure, they will be at risk of losing their land and will not receive the benefits of good farm management. In short, for ecologically sustainable farming to take place, farmers must have a stable economic environment so they can plan into the future, but must not be so protected against environmental variability that they ignore ecological limits. Finally, if the risks associated with farming create incentives to engage in unsustainable farm management practices, then more sustainable practices will come about only if governments impose environmental regulations. This can be done in a number of ways. Programmes like the grassland set-aside can encourage farmers to invest in public goods. Similarly, pollution could be taxed so farmers pay a penalty if they allow manure to enter the water-table. Regulations can also be imposed to mandate farmers to use good management practices. In the context of competitive world trade, however, any of these measures may put Canadian horticultural farmers at an even greater economic disadvantage relative to producers in California. For poultry and dairy farmers, however, who have guaranteed income through the marketing board system, it may be feasible to impose stricter environmental management regulations without pushing farmers into bankruptcy. FINAL RE M A R K S This research began with the assertion that we understand how to farm well enough to do it without causing grievous environmental problems. This was a conviction that I personally held when I first came to the University of British Columbia to embark on this project. I came to this opinion thanks to working along side my grandfather on his fruit and vegetable farm in Southern Ontario. During the four years that I have worked on this thesis this conviction has grown. To my experience on my grandfather's farm, I can now boast that I have studied "the literature" on sustainable agriculture, know more technical terms, and have a better knowledge of environmental and economic systems. M y underlying beliefs, however, have not changed. Farmers are on the front line of our battle to maintain a fertile and safe environment. Hourly, they make decisions that have an impact on the soil's ability to produce food and to provide a host of other environmental services. Despite the fact that farmers play an undeniably vital role in managing one of our planet's most precious resources, they are extremely constrained. There is a rarely visible, but omni-present economic system that surrounds farmers, influencing every action they take. Sometimes this influence leads to a positive direction, other times it leads in a negative direction. Let us hope that we can shape these influence for the positive in the future. The Ecologies of Scale Evan D. G . Fraser 144 I arrived at the hypothesis of this thesis in 1994, during the last summer that I spent any length of time at the farm. During that summer my grandmother, who is a highly successful stockbroker, had done (to put it mildly) very well for herself. 6 0 During that summer, my grandfather's neighbours who had cherry trees were abandoning their harvest because the price of cherries was lower than the cost of picking them. My grandfather, who had dug up his cherry trees years before, was not hurt by this particular downturn. Yet, as a man of astounding ingenuity and formidable energy, his life as a farmer was spent trying to stay one step ahead of the market. Despite his skills and passion as a farmer, my grandmother's skills in the stock market certainly helped keep the farm running. One afternoon in particular I remember chatting with my grandparents over dinner, having spent a long and hot day weeding strawberry plants. At some point in the conversation it dawned on the three of us that my grandmother had made more that afternoon on commission on investments than I was to earn in the entire summer. 6 0 T h i s i n no way impl ies any disrespect for m y Grandmothe r w h o m I love dearly a n d respect h ighly . T h a n k s to her successes that s u m m e r (and ever since), m y univers i ty tu i t ion fund also d i d rather wel l (which is a good th ing because I have stayed i n univers i ty longer t h a n most people expected). The Ecologies of Scale Evan D. G . Fraser 145 APPENDIXES APPENDIX I: T H E VARIETIES OF AGRICULTURAL E X P E R I E N C E S In this entire thesis we have been discussing agriculture as if it is one large uniform system, stretching around the world, and interacting with all producers and consumers in the same way. This is not the case. There are at least two major distinctions that, in broad terms, define different agricultural regions: (1) temperate and tropical farming, and (2) agriculture in the developed or industrialized world and agriculture in the developing world. The first distinction is geo-climatic, while the second is economic and social. The purpose of this section is not to exhaustively survey all the climatic and economic differences between these regions; in reality there are many other meaningful divisions between types of agriculture such as irrigated vs. rainfed, or subsistence vs. commercial. Rather, the goal is to highlight some of the key influences on sustainable agriculture around the world so that this thesis can be read with a slightly broader perspective. Lamprecht outlines a number of the key climatic differences between tropical and temperate zones. The most obvious of these is the fact that while temperate regions can only grow crops during the summer months, tropical zones have a twelve month growing season. In the tropics, daily temperature fluctuations are greater than yearly or monthly fluctuations and the length of day and night (the light periodicity) does not change much . The only regular climatic cycle in the tropics is the wet and dry season (Lamprecht, 1989). Another significant biological difference between tropical and temperate regions is the condition of the soil. In general, tropical soils are m u c h older than temperate soils, and the year round biological activity and high temperature mean that these soils are very weathered. As a result there is a deep leaching of nutrients in most tropical lowlands, and no matter what the parent material, tropical soils do not have the ability to regain base cations. Furthermore, organic matter never has the opportunity to accumulate in tropical soils because the decomposition rate is so fast (high tropical temperatures and moist conditions provide ideal conditions for biological activity that breaks down organic matter). As a result, tropical ecosystems are extremely diverse and efficient at recycling nutrients. Furthermore, the majority of the biomass in a tropical forest lies above the ground in living plant material. In the boreal forest, by contrast, the majority of the ecosystem's biomass is found on or below the ground in the form of decomposing litter and debris. Because of this, Lamprecht argues that tropical soils are maintained by the vegetation that grows on them as opposed to temperate ecosystems where the soil maintains the plant life that grows on it (Lamprecht, 1989). Conversely, in the north, the soils are m u c h less weathered and have a higher cation exchange capacity (a measure of a soil's ability to absorb nutrients in the form of cations). This is due to cooler The Ecologies of Scale Evan D. G . Fraser 146 temperatures that allow organic matter to accumulate. Organic matter not only provides a source of organic nutrients, it also increases the soil's cation exchange capacity, making it m u c h easier for temperate soils to be regenerated if they become infertile. Temperate ecosystems, therefore, tend to have less complex vegetative structure and are less efficient at recycling nutrients (Lamprecht, 1989). Tropical ecosystems tend to be higher in biodiversity and are inherently more fragile than temperate ones. This provides a number of substantial obstacles to sustainable agriculture. First, once the initial vegetation layer is removed soils erode quickly and have very-little ability to regenerate. Second, the majority of the world's genetic diversity exists in tropical areas. The destruction of these ecosystems is especially devastating for biodiversity. The challenges of tropical agriculture are compounded by the economic situation that many tropical farmers find themselves in. By and large the developing world exists in tropical regions. In general, therefore, tropical regions also have a high population growth rate, a large proportion of people who directly depend on agriculture for employment, and high rates of poverty. Consequently, agriculture in these regions is more subsistence oriented, is less capital-intensive, and is m u c h more labour-intensive than the agriculture found in Europe, the U S , or Canada. This set of conditions mean that sustainable agriculture faces different hurdles in the developing world than it does in the rich north. For example, Jackson argues that one way of making farming more sustainable in the North is through increasing the number of people working the land. Essentially he suggests that if there were more farmers, the need to spray and use heavy farm machinery would be diminished (Lamprecht, 1989). In the developing world, however, soil erosion is often blamed on the size of the agrarian population. Lamprecht cites Lanly (1985) who sees population growth as a major problem with agriculture in the developing world (Lamprecht, 1989). Writing in 1989 Lamprecht points out that in 90 tropical countries 500 million people (out of a total of 1.2 billion) support themselves from slash and burn , shifting cultivation agriculture. Since populations in these areas are growing by 1.25 per cent each year, fallow periods are reduced below sustainable levels, marginal land is cleared for cultivation and serious problems of soil erosion occur (Lamprecht, 1989). According to Lamprecht's research, each farming family in the developing world needs on average between one and three hectares each year. Typically, at the beginning of each dry season land is cleared, and at the end of the dry season the land is burned to release the nutrients in the plant matter. The plants (usually rice or maize) are sewn at the beginning of the rainy season, and in areas where there is a second, shorter, rainy season farmers may be able to obtain a second crop on a different piece of land. After one or two years on a field, pest outbreaks increase, soil nutrients decrease and there is a 50 per cent reduction in yields even on high-quality tropical soils. After four years a farm family usually abandons the land and moves onto a new site. Lamprecht shows that there are four usual outcomes for this The Ecologies of Scale Evan D. G . Fraser 147 used agricultural land: (1) ecological succession takes place and the land may develop to a second growth climax forest; (2) cultivation may have lasted so long that nutrient depletion is irreversible. In this case succession is arrested, and a climax community of hard grasses occurs preventing the development of woody plants. Lamprecht indicates that there are approximately 2 billion hectares of this unusable secondary savannah world-wide; (3) at the end of the agricultural cycle grasses are sewn and the land is converted into pasture. Lamprecht argues that in some cases large land owners have been known to use shifting farming families to clear the land for them in order to expand grazing land; or (4) abandoned land is transformed into some sort of plantation. It is important to note that shifting cultivation has been a viable way of life for millions of people for at least 2,000 years. Sustained yield is possible in this system so long as fallow periods are kept quite long (1-5 years of agriculture and 10-25 years of fallow). Lamprecht, however, argues that for this to work there can only be a maximum rural population density of 5-7 people per k m 2 and no population increase. In recent decades, however, this has broken down because large areas of land have been removed for plantations or animal husbandry and there have been high population growth rates. Consequently, the number of people depending on the available arable land has increased, fallow periods have decreased, and marginal land has been brought into use (Lamprecht, 1989). This contrasts dramatically with agriculture in the developed world. In North America and Europe farm populations have been dropping since the Industrial Revolution when the demand for labour in the new industrial sector drove urban wages beyond what was possible for agriculture. Winson (1992), for example, shows that since the mid 20th century the farm population in Canada has fallen by 67 per cent (Winson, 1992). Echoing this, Wilson (1990) shows that while 80 per cent of Canada's population was agrarian at Confederation, it had fallen to approximately 50 per cent by 1921, and had declined to 20 per cent by the late 1980s (86). Strange (1989) points out that reducing the number of farmers (and their dependants) has been a clear objective of economic policy since the Industrial Revolution, as people who could not earn a living from agriculture were free to work in industry (47). Consequently, there were significant labour shortages in agriculture as children from rural families were enticed off the farm in search of better jobs, higher salaries, and an urban lifestyle. As a result, those who were left on the farm had to make their labour stretch m u c h further. This transition was at once made possible by, and created a social and economic niche for, labour-saving technologies. Tractors, combine harvesters, and the widespread use of pesticides all allow a shrinking agrarian population to meet the demands of urban consumers. Bray points out that mechanization also sped up the European settlement of the American mid-West. When this area was developed land was very cheap. The easiest way for farmers to improve their income at this time was to increase the acreage they were cultivating (Bray, 1986). Because The Ecologies of Scale Evan D. G . Fraser 148 labour was l imi ted (and therefore expensive) the easiest way to do th is was through invest ing in labour-sav ing technologies. A s a resul t , the history of agr icul ture in the West since the Industr ia l Revolut ion has been a history of subst i tu t ing capi ta l , i n the form of technology or inpu ts , for labour (Bray, 1986). The labour- intensive agr icul ture of the south and the capi ta l - intensive agr icul ture of the nor th present different obstacles for susta inable agr icul ture. For example, Scott points out that ru ra l unemployment wi l l increase if labour saving technologies are used in areas where there is h igh ru ra l densi t ies and few other economic opportuni t ies (Scott, 1985). Barke r , et. a l . stress that if fa rm workers are put out of work by labour saving technologies they may be forced to over-uti l ize c o m m u n a l resources or cult ivate marg ina l l and that is unsu i tab le for cul t ivat ion (Barker, Herdt, 8B Rose, 1985). Th is can then lead to increased deforestation and the associated problems of soi l erosion, water s i l tat ion, and the loss of habi tat and biodiversity. O n the other h a n d , i n the developed wor ld , labour saving technology has al lowed indus t ry and commerce to f lour ish. It is a matter, however, of ta i lor ing the use of th is technology so that it does not create other env i ronmenta l problems. Bomke , et. a l . , argue that this debate centres a round how economists define efficiency (Bomke, Wojcik, 8& K u t k o w s k a , 1991). In Nor th Amer i ca farm efficiency is measured in terms of cost per un i t of output . Accord ing to Strange, by th is def ini t ion grain farms wi th a n n u a l sales between $40,000 and $130,000 have the m a x i m u m efficiency (1988). W i th less than $40,000 in a n n u a l sales, farms tend to have underut i l i zed labour and equipment that p u s h the cost per un i t higher. Over $130,000 in a n n u a l sales and the management and admin is t ra t ion of a farm becomes so compl icated and other var iables s u c h as weather and labour issues, start to create problems (Strange, 1988). To t ru ly unders tand if an agr icu l tura l system is efficient, however, B o m k e et. a l . say that it is necessary to evaluate the socia l , pol i t ical a n d economic context. For example, if ou tpu t / pe rson hours i n agr icul ture is low (which is the economic def ini t ion of an inefficient farm), one mus t look at the whole economy to see if agr icul ture is drawing workers away from indust ry (perhaps because farm labour is subsidized). If there is no demand for labour in indust ry , then low labour product iv i ty is not real ly inefficient and may be provid ing much-needed ru ra l employment (Bomke et a l . , 1991). In summary , therefore, whi le in the developing wor ld there may be too m u c h labour for the avai lable arable l and , i n the r i ch nor th there may be too little agr icu l tura l labour. A s it happens, the majori ty of the ru ra l poor in developing economies are in ecologically fragile t ropical regions. Th is shou ld lead to a different series of pol icies than wou ld be put i n place for agr icul ture in the developed wor ld . In the ecologically more robust Nor th , the ma in problems may stem from not enough labour that has resul ted in a dependence on mechanizat ion. If th is tu rns out to be a prob lem, then there wi l l need to be different solut ions proposed. In conc lus ion B ray contends that there is a re lat ionship between the environment, the avai lable land base, and The Ecologies of Scale E v a n D. G . Fraser 149 the cost of labour that will determine what opportunities there are for sustainable agriculture (Bray, 1986). The Ecologies of Scale Evan D. G . Fraser 150 APPENDIX II: M E T H O D O L O G Y U S E TO ANALYZE TRANSCRIPTS A n axial coding process was used to add key words to the transcripts. These key words became the basis for the analysis. This included the following six stages: Key Words - A n initial list of eight key words or concepts was developed that reflected the different forces that might influence agriculture in British Columbia. This initial list of influences included: international trade, government programmes, cost of inputs, and the price of commodities. The transcripts were then all read carefully keeping in mind the question: "what are the forces that shape the farm crisis?" Whenever a quote in the transcripts was found that helped to answer this question the quote was coded with one of the key words. If the quote did not relate to any of the key words a new key word was added to the list that generically represented the quote. In this way, the text itself informed the development of the categories rather than having the data forced into pre-determined categories. By the end of the process, there were approximately 20 key words. Out of the 2,000 pages of transcripts, over 400 quotes were coded. Comments - As the transcripts were being coded a comment was written for each key word. E a c h comment describes, in point form, the content of the quotes. For example, the key word "retail" was used to code any quote relating to the influence that retailers have on the farm crisis: Key word: retail Comment: retail amalgamation major effect - most retailers do not differentiate between local and North American Produce - for perishable commodities there are fewer purchasers and more producers; scales in favour of buyer - niche markets will not ever deal with the 4 million pounds of fruit and vegetables. B . C . produces every year; B . C . needs access to major chains -individual retail stores used to buy their own produce, now big chains do not allow this - 3 - 4 chains control the B . C . grocery dollar, and hurt local economies by offering milk as a lost leader - small local produce is competitive in season, however, short season. Identifying the speaker - The speaker of each quote was also identified as either a business person (though not representing a major retail chain), a civil servant, a member of the standing committee, a farmer, a politician (though not a member of the standing committee), a representative from a Non-governmental Organization (NGO) or private citizen, or a representative of a major retailer. Combining key words with speakers - Quotations and comments were then sorted by key word and by speaker. The quotes made by each speaker for each key word were then briefly summarized in a sentence or two. For example, Speaker: Farmer Keyword: Trade # of Quotes: 17 Summary: Trade is seen as a negative factor for B C producers. Farmers in B . C . are supported less and have such a low volume of sales that it is The Ecologies of Scale Evan D . G . Fraser 151 impossible to think that they can compete with American producers. F a r m subsidy levels are also m u c h lower in Canada (and BC) than other countries. Analysis using flowcharts - A flow chart or mind map was created for each type of speaker that depicts the organization of thoughts and ideas. These flow charts represent each type of speaker's notions on the origins of the farm crisis. In this way, it is easy to observe where speakers agree and where they disagree and how they organized the various influences. Figures one and two provide examples of these flow charts. This method roughly followed the process suggested by Grounded Theory "...a qualitative method designed to aid in the systematic collection and analysis of data and the construction of a theoretical model" (Glaser 8B Strauss, 1967). Grounded theory is an established methodology for analysing large amounts of text and in order "... to develop a well integrated set of concepts that provide a thorough theoretical explanation of social phenomena under study"(Corbin 8& Strauss, 1990). The Ecologies of Scale Evan D. G . Fraser 152 Retail Retail concentration has reduced opportunities for local processors and producers. Processors Processing has declined in most sectors in B.C. This has hurt local producers, but opened up opportunities for small-scale processing that producer can access. Marketing and Education Must explore possibilities of new markets Taxes While taxes should be put in place that favour good environmental practices any additional taxes may hurt B.C.'s ability to compete with food from other areas. Price and Income Global forces such as trade, retail, and changes in the processing industry have eroded farm income through low commodity prices. The price at the grocery store has not matched this. Strategies As a result, the following strategies are proposed. Government While some favour more or less government, generally the role of government is to help manage transition while not creating false security in industries that must change to meet new realities. Trade We are part of a global system that brings both good and bad. First, we cannot compete for all products. Second, there is increased prosperity in general. Environment Farmers must receive some benefit when they protect the environment Consumers Consumers are caught between a desire to support local producers and the inexpensive convenience of the supermarket Flow Chart or mind-map to illustrate the perspective of the members of the select standing committee based on their comments during public hearing on the state of the agricultural industry in British Columbia. The Ecologies of Scale Evan D. G. Fraser 153 T r a d e I n c r e a s e d t r a d e h a s b r o u g h t b o t h o p p o r t u n i t i e s a n d p r o b l e m s C o m p e t i t i o n C o m p e t i t i o n wi l l o n l y b e c o m e t o u g h e r a s W a l - M a r t e n t e r s t h e m a r k e t . T h i s m a k e s s u p p o r t i n g l o c a l p r o d u c e r s v e r y h a r d . B i g B u s i n e s s T h e r e h a s b e e n a l a r g e c o n s o l i d a t i o n o f t h e p r o c e s s i n g a n d r e t a i l i n d u s t r y . L o c a l p r o d u c e r s a n d p r o c e s s o r s h a v e n o t b e e n a b l e to a d a p t . / P r o c e s s i n g T h e p r o c e s s i n g i n d u s t r y is s u p p o r t e d b y r e t a i l a s l o n g a s it is f l e x i b l e e n o u g h to m e e t c h a n g i n g c u s t o m e r d e m a n d s . G l o b a l i z a t i o n T h e l a r g e r e t a i l e r s p e r c e i v e t h a t m a j o r c o m p e t i t i o n f r o m t h e U S , e s p e c i a l l y W a l - M a r t a n d o t h e r b i g b o x s u p e r s t o r e s a r e c r e a t i n g a s i t u a t i o n w h e r e t h e y m u s t r a t i o n a l i z e t h e i r a c t i v i t i e s to s t a y c o m p e t i t i v e . M a r k e t i n g a n d E d u c a t i o n s C o n s u m e r s a r e b e t t e r e d u c a t e d a n d a s k i n g t o u g h e r q u e s t i o n s . H o w e v e r , m a n y j u s t w a n t t h e c o n v e n i e n c e o f t h e s u p e r - s t o r e . T h e r e is a bit o f a c o n t r a d i c t i o n h e r e . L o c a l P r o d u c e R e t a i l e r s wi l l b u y l o c a l s o l o n g a s t h e y c a n s t a y in b u s i n e s s , a n d t h e p r o c e s s i n g / p r o d u c t i o n i n d u s t r i e s a r e f l e x i b l e to m e e t t h e i r n e e d s ( w h i c h a r e a r e f l e c t i o n o f c u s t o m e r d e m a n d ) . T h e y d o n o t k n o w h o w m u c h l o c a l p r o d u c e t h e y b u y . H o w t o d a y ' s r e t a i l i n g s i t u a t i o n e f f e c t s t h e f a r m c r i s i s R e t a i l e r s a r e f i n d i n g t h e m s e l v e s u n d e r p r e s s u r e to g r o w l a r g e r a n d o f f e r m o r e s e r v i c e s , c o n v e n i e n c e , a n d a b e t t e r p r i c e d u e to c o n s u m e r d e m a n d s , a n d p r e s s u r e to g r o w f r o m t igh t c o m p e t i t i o n , e s p e c i a l l y f r o m W a l - M a r t . T h i s m a k e s it d i f f i c u l t to s u p p o r t l o c a l f a r m e r s w h o c a n n o t p r o d u c e y e a r r o u n d . G o v e r n m e n t a g e n c i e s a r e s e e n a s s t a n d i n g in t h e w a y b e c a u s e t h e y c r e a t e a f a l s e s e c u r i t y t h a t m e a n s t h a t f a r m e r s o r p r o c e s s o r s d o n o t i n n o v a t e to m e e t c h a n g i n g d e m a n d s . R e t a i l R e t a i l i n g is p o l a r i z e d b e t w e e n b i g - b o x o u t l e t s a n d s m a l l n i c h e b o u t i q u e s P r i c e a n d I n c o m e B . C . r e t a i l e r s try to s u p p o r t l o c a l f a r m i n c o m e b y d i r e c t i n g a s m u c h s a l e s w i t h i n p r o v i n c e a s p o s s i b l e . E n v i r o n m e n t T h e r e a r e e n v i r o n m e n t a l c o n s t r a i n t s in B . C . t h a t m a k e s o m e p r o d u c t s i m p o s s i b l e to p r o d u c e . Flow Chart or mind-map to illustrate the perspective of the representatives from major grocery retailing chains based on their comments during public hearing on the state of the agricultural industry in British Columbia The Ecologies of Scale Evan D. G. Fraser 154 APPENDIX III: 1 9 9 1 C E N S U S D A T A 6 1 #OF FARMS ha Conservation tillage (# of farms) No tillage (# of farms) Crop rotation Winter cover crops (# of farms) (# of farms) South Langley 374 3786 4 8 13 18 North Langley 557 6136 10 11 27 29 Central Langley 477 3841 14 8 20 15 LANGLEY 1408 13763 28 27 60 62 East Richmond 125 1881 4 3 6 3 West Richmond 112 4136 5 7 7 5 RICHMOND 237 6017 9 10 13 8 East Delta 97 4253 3 6 20 20 West Delta 91 3274 6 3 22 26 DELTA 188 7527 9 9 42 46 South Surrey 142 1331 6 3 10 6 North Surrey 556 6897 18 8 28 27 SURREY 698 8229 24 11 38 33 South Matsqui 425 3981 10 6 14 51 West Matsqui 400 4191 10 8 31 37 North Matsqui 283 4807 12 12 23 43 MATSQUI 1108 12979 32 26 68 131 West Chilliwack 266 3598 14 16 15 39 East Chilliwack 489 8391 21 53 68 63 CHILLIWACK 755 11988 35 69 83 102 AGASSIZ 108 3449 4 21 20 22 ABBOTSFORD 298 7689 15 30 49 72 MISSION 135 1196 2 2 6 7 MAPLE RIDGE 244 1992 6 11 10 10 PITT MEADOWS 180 5618 1 4 9 5 NICOMEN 183 5378 3 13 18 23 BURNABY 38 112 7 1 6 0 6 1 Conservation tillage refers to a number of different agronomic practices that reduce the amount of mechanical disruption to the soil. No tillage refers to seeding crops without tilling the soil. Crop rotation refers to planting different crops in the same field on successive years. Winter cover crops are crops planted during winter months to protect the soil from water erosion. Permanent grass cover is when farmers plant perennial grass crops Contour cultivation is when crops are planted along a hillside rather than up or down a hill, thus reducing the potential for erosion. Grass waterways refer to when the banks of rivers, streams and ditches are planted with grass instead of being bare soil. Strip Cropping Strip cropping is a technique in which alternate strips of different crops are planted in the same field. The Ecologies of Scale Evan D. G. Fraser 155 1 9 9 6 C E N S U S D A T A 6 2 Crop Strip-Total # Tillage rotation Permanent Winter cover Contour cropping Grass of (# of (# of grass cover crops cultivation (# of waterways Items farms Total Ha farms) farms) (# of farms) (# of farms) (# of farms) farms) (# of farms) Agassiz 133 4,111 5 30 98 28 1 4 9 East Chilliwack 603 15,988 13 107 329 84 5 12 9 West Chilliwack 323 3,345 5 50 170 51 2 4 15 Chilliwack 926 19,333 18 157 499 135 7 16 24 East Delta 105 4,463 2 46 35 20 3 2 3 West Delta 82 3,073 1 33 27 19 2 1 1 Delta 187 7,536 3 79 62 39 5 3 4 North Langley 562 5,602 1 31 230 18 5 4 5 Other Langley 547 4,322 3 24 267 26 5 4 19 South Langley 477 3,463 0 26 213 11 5 3 10 Langley 1,586 13,386 4 81 710 55 15 11 34 Mission 163 1,164 1 9 63 7 2 3 3 Maple Ridge 331 1,943 5 26 128 10 7 2 7 South Matsqui 420 3,875 2 42 128 45 16 0 2 West Matsqui 455 4,693 1 46 219 43 4 4 14 Other Matsqui 248 4,583 12 44 116 44 8 1 8 Matsqui 1,123 13,151 15 132 463 132 28 5 24 Abbotsford 329 7,596 12 102 143 91 5 5 13 Nicomen 198 5,212 5 22 125 14 2 1 5 Pitt Meadows 179 3,087 3 15 62 9 1 7 2 East Richmond 130 1,968 1 18 23 0 1 2 1 West Richmond 119 1,152 5 19 19 9 2 3 0 Richmond 249 3,120 6 37 42 9 3 5 1 North Surrey 542 7,147 15 87 187 31 12 8 12 South Surrey 203 1,573 5 16 72 6 2 3 5 Surrey 745 8,721 20 103 259 37 14 11 17 Burnaby, part 35 140 3 13 4 4 0 0 0 6 2 Conservation tillage refers to a number of different agronomic practices that reduce the amount of mechanical disruption to the soil. No tillage refers to seeding crops without tilling the soil. Crop rotation refers to planting different crops in the same field on successive years. Winter cover crops are crops planted during winter months to protect the soil from water erosion. Permanent grass cover is when farmers plant perennial grass crops Contour cultivation is when crops are planted along a hillside rather than up or down a hill, thus reducing the potential for erosion. Grass waterways refer to when the banks of rivers, streams and ditches are planted with grass instead of being bare soil. Strip Cropping Strip cropping is a technique in which alternate strips of different crops are planted in the same field. The Ecologies of Scale Evan D. G. Fraser 156 APPENDIX V : STATISTICS T A B L E S Summary output for Figure 6-3: Relative specialization score for all horticultural crops in British Columbia between 1989 and 1999. Multiple R 0.8138 R Square 0.66227 Adjusted R Square 0.614023 Correlation Coef. -0.8137 Standard Error 195105.1 Observations 9 ANOVA Df SS MS Significance F Regression Residual Total 1 7 8 5.23E+11 2.66E+11 7.89E+11 5.23E+11 3.81E+10 13.7266 0.007605 Summary output for Figure 6-4: Percent of total area of British Columbia's horticultural cropland occupied by largest four crops between 1992 and 1997. Regression Statistics Multiple R 0.85504 R Square 0.73109 Adjusted R 2 0.6638 Correlation Coef. -0.85504 Standard Error 2.104 Observations 6 ANOVA df SS MS F Significance F Regression 1 4.183 48.183 10.875 0.02999643 Residual 4 17.722 4.4306 Total 5 65.90 The Ecologies of Scale Evan D. G . Fraser 157 Summary output for Figure 6-5: Relative specialization score for the municipality of Delta (years with a higher score have a higher diversity of crops). Regression Statistics Multiple R 0.664273 R Square 0.441259 Adjusted R Square 0.161889 Correlation Coef. -0.66427 Standard Error 1.281035 Observations 4 ANOVA df SS MS F Significance F Regression 1 2.592 2.592 1.579477 0.335726646 Residual 2 3.2821 1.64105 Total 3 5.8741 Summary output for Figure 6-6: Relative specialization score for processed vegetable crops in B . C . between 1990 and 1999 (years with high value indicate less biodiversity and greater specialization). Regression Statistics Multiple R 0.955285 R Square 0.91257 Adjusted R Square 0.90008 Correlation Coef. -0.9475 Standard Error 314258 Observations 9 ANOVA Df SS MS F Significance F Regression 1 7.22E+12 7.22E+12 73.06386 5.95777E-05 Residual 7 6.91E+11 9.88E+10 Total 8 7.91E+12 The Ecologies of Scale Evan D. G . Fraser 158 APPENDIX V I : W O R K S CITED Agriculture and Agri-Food Canada. (1992). An Economic Overview of Farms Incomes by Farm Type, 1992. Ottawa: Government of Canada. Agriculture and Agri-Food Canada. 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