NOVEMBER 7, 1974
There's No Such Thing as a Free Lunch
AN ADDRESS BY John E. Moles,
GENERAL MANAGER, ROYAL AGRICULTURAL WINTER FAIR
CHAIRMAN The President,
Sir Arthur Chetwynd
SIR ARTHUR CHETWYND:
Distinguished guests, ladies and gentlemen:
"Some people tell us that there ain't no hell, But they never farmed, so how can they tell?"
As well as being General Manager of the world-famous Royal Agricultural Winter Fair, our speaker today-Mr. John Moles-is a farmer and agriculturalist-by training and choice. As I lived and worked on a farm for the first twenty-two years of my life, perhaps we can jointly attest that there is some truth in that couplet by an anonymous writer.
Most city slickers are wont to refer to the farmer in terms of derision. You all have heard someone say "That farmer!" Why do we have country bumpkins but not city bumpkins?
The city child's exposure to the very important art and industry of farming in many cases is confined to rhymes and songs. In kindergarten they learned there was a "farmer in the dell". Later on they found out that "Old Macdonald had a farm".
Other than an odd trip to the country and consuming the products of the farmer's sweat and sometimes tears, those of the city have little feeling or understanding for the everyday life of those in the most primary of all industries--farming. By contrast, the country or farm child learns to take the bull by the horns quickly. In other words they have to come to grips with the basics in this life of ours, at a very early age.
After shovelling a few tons of "you know what" on the business end of a four-tined fork, incredibly long working hours with little or no discernible pay, it should not be surprising that increasing numbers of farm folk have left their original abode to answer the siren song of what seems to be, comparatively at least, a softer life, and easier money. That old song from World War I has taken on renewed meaning in recent years. Many are, indeed, now wondering, "How're you gonna keep 'em down on the farm, now that they've seen Paree?" or some Canadian equivalent of that beckoning metropolis?
Daniel Webster's statement on the subject has renewed meaning today for all of us: "Let us never forget, that the cultivation of the earth is the most important labour of man. When tillage begins, other arts follow. The farmers, therefore, are the founders of civilization."
In these worrisome times of "population explosion and famine", those who produce the things we need for our tables do, indeed, hold the future of mortal man in their rough-worn hands. We are fortunate in having with us today a man whose education, experience and lifestyle have prepared him so well to speak to this subject under the very intriguing title: "There's no such thing as a free lunch!" What he will have to say has important implications for all of us.
It is particularly timely that we should welcome as our guest today the "head knock" of Canada's "Show Window of Agriculture". Next week marks the opening of the 46th show. The "Royal", as it is affectionately known to every farmer, rancher, and cattleman in Canada and the United States, will have a particularly "Royal" touch this year in that Her Royal Highness, Princess Anne and her husband Captain Mark Phillips will be on hand for opening ceremonies.
John Moles, understandably, is very busy at this time of year. His whole life has been centred around farming and the products of the earth. From his birth, a few short years ago in Collingwood, Ontario, through high school at Ridley College, through obtaining his degree from the Ontario Agricultural College at Guelph, to his present very responsible position, he has been farm oriented.
An active athlete during his younger days, he is a man of very broad and proven experience in his chosen field. He has been:
-An international livestock judge
-A successful manager and salesman of animal feed products
-A mixed farmer-raising beef, hogs and turkeys, not necessarily in that order!
-The former manager of farm sales for the Ontario Hydro
-A successful and personable broadcaster and performer on CBC Radio and the well-known TV show "Country Calendar".
There is little in connection with agriculture that John Moles does not know about or has not been involved in.
Except for the years of World War II, when John served his country as a Lieutenant in the Royal Canadian Naval Volunteer Reserve, commanding one of those truculent little seagoing creatures--a corvette (an experience even more rugged than farming!), his interests have never wavered.
Even in marriage he kept everything together. Marsha Moles, herself a graduate from Macdonald Institute, and John Moles produced and successfully raised two children--one girl and one boy. They are happily able to enjoy three grandchildren, two girls and one boy (similar to our experience except we have two grandsons and one granddaughter). Surely an example of well planned, "mixed farming".
I am most pleased to present to you at this time John E. Moles, General Manager of Canada's own Royal Agricultural Winter Fair, and to ask him to tell us the reasons why "There is no such thing as a free lunch!"
Ladies and gentlemen, John Moles. Will you welcome him please.
Thank you, Mr. President. May I just say how pleased I am to be invited to speak to The Empire Club of Canada. When I looked over your last year's guests, and those who have come before me this year, and those who will follow--I am most honoured.
The Empire Club of Canada, and the Royal Agricultural Winter Fair have many things in common: a responsibility of tradition of service to all Canadians, and a forum to spread knowledge-your Club through its distinguished and knowledgeable speakers on many subjects, and the Royal by bringing together from across Canada, the United States, Great Britain, Australia, New Zealand and, in some years Rhodesia-agricultural products, livestock and grain to be judged, and by exchanging ideas and information on new agricultural breeds and varieties that will play an important role in world food supplies.
When I suggested my subject to your President several weeks ago, it seemed appropriate, and as I speak to you today it has taken on a far greater importance, because within the past week or ten days, many of the significant world crop reports have become available and, for the third year in succession, grain and protein crop production has fallen 1972, 1973, 1974.
Should this continue, we are faced with two questions. First--can we, will we be able to feed ourselves? Second--will we be able to feed others?
The Food Situation Today
The present world food situation is critical. Many regard it as temporary and blame adverse weather patterns. Drought did strike in varying degrees in thirty-five countries in 1972, 1973, and 1974. After the record-breaking grain crop of 1971 (1,106 million tons), a seemingly small drop of 4% (44 million tons) was enough to cause violent responses in prices, shipments, purchases, and human suffering. The 4% grain reduction in 1972 was the first decline in total food production since World War II, and even so, was the second largest production ever recorded. Adverse weather has always existed, but no planned international grain storage system to even out year-to-year variations has ever been undertaken. Seemingly minor fluctuations in food production continue to cause violent responses.
Much of the decrease in food production occurred in the advanced areas of the world. Winterkill in the USSR in 1972 meant that much of the area was re-seeded to spring wheat, which, in turn, suffered from drought. To meet domestic food and feed needs, the USSR made the largest single cereal grain purchase in history from the world market. A poor wheat crop in Australia compounded the shortage. Wheat prices soared to three times their former $1.70 per bushel value. World wheat reserves were reduced to less than 10% of recent annual world production.
In 1974, the situation worsened. Coincidental with reduced world wheat stocks was a virus disease which induced rice shortage in the Far East. Total world grain reserves reached the lowest level since 1953, and left the world without the protection and security it formerly enjoyed. The anchovy catch off the coast of Peru, a valuable protein source, was reduced 90% by a shift in ocean currents and overfishing. Growing livestock numbers, and an alarmingly large pet population in affluent societies exerted strong demands for limited protein and other feed supplies. Feed prices soared. Devaluation of the dollar shifted the purchasing power of nations and inflation became world-wide. An energy crisis hit a world highly dependent on fossil fuels, especially mechanized agriculture. Small reductions in food production resulting from adverse weather meant that more food was reserved for domestic needs and less was directed into international trade. In Canada, food prices rose 18.1 % in 1973, and an estimated 15 % in 1974. A growing awareness of the critical food situation engulfed the world.
In 1974, the "all-out effort" at food production flagged because adverse weather reduced yields in many areas. In Canada, early fall frosts damaged the late-seeded crops, so that prairie wheat production was down 13.3 % from 1973, and down 14.2% below the ten-year average. In the United States, 35 million acres of land was released from the soil bank but corn and soybean production was down an estimated 16 and 19% respectively, because of drought, late seeding, and fall frosts. Export availabilities in the five main exporting areas of Argentina, Australia, Canada, the United States, and the European Economic Community could not reach expectations. The effects of the "energy crisis" were expressed in fertilizer shortages and higher prices, increased transportation costs, limited and expensive farm machinery and goods.
The root of the food crisis lies in the fact that the world is expected to add 80 million people in 1974, along with 77 million in 1973, plus 73 million in 1972-an increase of 1.3 billion people since 1953, for a total of 3.9 billion people on earth. Although further capacity to increase food production does exist, the exploding population is steadily reducing the margin of safety. Enormous increases in food production are needed to restore food reserves, yet weather, the most powerful component in crop production is essentially beyond control. Irrigation can overcome drought on a limited acreage and only if fresh water supplies are available. The situation is critical! Rather than a temporary shortfall related to adverse weather conditions, the present food crisis may more accurately be described as an inevitable situation. It may be that a long-term trend has been brought dramatically into focus.
Population increase and the fact that not all countries are equal in agricultural productivity are related to the present crisis, not a slowing down in food production. Food production per year increased an average of 2.8%, just slightly above the 2.6% per year population increase during the 1960s, but 5 % per year increase is needed to bring diets up to an adequate level. The overall 2.8% increase masks those countries who have failed to increase food production fast enough to meet the demands of their people. On a per capita basis, food production during the 1960s showed no increase in any of the developing regions, and actually declined in Africa. The arable land available to feed man is limited to about 0.9 and 1.9 acres per person in the Old and New Worlds, respectively. Neither can seafood be used to bridge the food gap because of the unmanageable nature of the oceans. Presently the oceans provide only 1 % of the food supply.
Because generalizations about the total world food situation are not meaningful, and because of the contrasts between the industrialized and the have-not nations, separate descriptions are necessary.
The Industrialized Nations
In North America, Europe, Japan and Oceania, there are 1.2 billion people whose diets are adequate to excessive. There is no concern about the next meal; standards of living have reached unprecedented levels; agriculture is efficient; there is a willingness to pay steadily rising prices for imported foods, highly processed foods, or animal products. The continued expansion of animal agriculture indicates that the economics of taste outweigh the economics of need in less fortunate areas. The majority of the people have been released from any responsibility or concern about food production. Until recently, over-production has caused serious economic problems and governments justifiably have encouraged production limitations to reduce the economic burden of surpluses. More than 50% of adult Canadians are overweight; in certain classes of people, this problem has reached an extreme of 65 to 87%. Future historians describing the 1960s and 1970s will marvel at the amount of animal products consumed, and may envy the abundance and variety of food that has been taken for granted.
Mechanization has displaced farm labour but has increased agricultural output and efficiency to a point where, of all nations, North Americans spend the lowest percentage of their income on food. Food production is well ahead of population growth because rainfall is more reliable and better distributed than in areas dependent on the cyclical monsoon rains. But because the fine line between producing too much and just enough has been violated, agriculture is not held in esteem by consumers. Farm incomes are depressed relative to other segments of society. The high cost of establishing a viable farm unit with extensive mechanization, high land values, labour problems, risk, and low financial return has discouraged farming. Parents encourage children to enter more prestigious professions with shorter work hours, higher pay, and with less physical demands. Farmers fortunately recognize farming as a way of life, and this alone has held them to the soil. A select 6% of the population produce the food and have sought the most efficient methods to remain viable. They are proud to be farmers; their satisfaction lies in meeting the challenges of farming and in producing food for others.
The Have-not Nations
The food situation of the industrialized areas stands in sharp contrast to that of the have-not nations. Popular literature suggests that one-third to two-thirds of the world's people "go to bed hungry", a statement that cannot be verified. Based on recommended caloric intake, as many as 2.4 billion (2/ 3) are underfed at various times of the year. Few may die of direct starvation but food shortages or imbalanced diets predispose many to fall victim to a variety of diseases. People in the have-not nations consume 50% less calories than in the industrialized nations.
Protein malnutrition is serious in developing areas. Protein-calorie imbalance is reportedly found in 1.9 billion people (one-half the world's population) and 300 to 500 million, possibly 800 million, suffer from extreme protein malnutrition. Protein deficiency is common in children (43% of children five years of age or less) resulting not only in a high mortality rate but irreversible mental retardation and restricted body development in survivors. When such children reach adulthood, will they be capable of assisting in food production and the economic development of their country?
Of a hundred developing countries, seventy-three became independent after 1945. These people have chosen first independence and freedom. They have not demanded the right to be fed. Until the people of a nation demand of their government an explanation for their inadequate food producing capacity, and until they demand the right to be fed, little agricultural progress may occur. First indications of this action may be witnessed in the September 1974 downfall of the Ethiopian Government. An explanation of why hundreds of thousands of people were allowed to die in the 1973 drought was demanded.
Food in History
Although far fewer numbers of people than at present have lived at any single time throughout history, man has never had enough food. In six thousand years of recorded history, never has enough food been produced in any one year to meet all of man's needs. Famines were more frequent in former times than today, so that there has always been doubt about the ability of the planet to produce enough food.
Before recorded history, a vague record exists of how man spent every waking moment of his life in search of food. Undoubtedly the fortunes of hunting varied, and unless "in season" food plants could be found, be frequently went hungry.
The development of agriculture ten thousand years ago was a giant forward step in food production and it released people from the concerns of obtaining their daily food to perform other functions. More food allowed populations to surge, thereby placing greater and greater demands on food production.
From the beginnings of agriculture until the advances made by science in the 19th century, food production was relegated to the lowest order of society. But without science, it mattered little if food production rested with slaves, serfs, bondmen, service-tenants, stewards, copy-holders, husbandmen, landowners, farmers, or county-squires--the result was the same--inadequate production. Yet agriculture was viewed as a source of unending wealth and man was forced by need, greed, or taxation, to extract all that was possible from the land. Agriculture became nothing more than an assault on the soil. Once productive areas have been scarred by the mismanagement of former civilizations.
Famine again characterizes the world in the centuries following Roman agriculture until the development and application of science in the 19th century. Between 10 and 846 A.D., two hundred and one famines were recorded in the British Isles, a famine once every four years. 1n a single country of Europe, four hundred and fifty famines were recorded between 1000 A.D. and 1946, or 53% of the time. A study at Nanking University in China reported that from 108 B.C. to 1911, there were 1,828 famines in China in a total of 2,019 years.
Historical references to famines are frequently remarks "in passing", rather than conclusions drawn from presented data or descriptions, or often they are nothing more than a footnote in history. Perhaps no author has found the words to describe a famine. Perhaps famines were so common they were not deemed newsworthy, or writers were too proud to admit that their people were hungry.
Extreme food scarcity, hunger and starvation for thousands characterized a famine in former times. No food was available at any price; no help could be sought; no alternative food sources existed. Death, misery, or emigration resulted. Some statistical idea of the size and effects of famine may be revealed by the potato famine in Ireland in 1846. Prior to the failure of their staple food crop, the population numbered eight million. When the potato blight struck, two million starved to death, two million emigrated, and four million were left in misery.
Since 1846, the situation in Europe has been less critical because sixty million people went to the Americas, Australia, and New Zealand and, in time, exported food back to Europe. But until immigrants mastered the forest, prairie droughts, plagues of pests, plant diseases, cold and other adversities, food shortages in the new lands were not uncommon.
It is to the credit of agriculture that in less than ten thousand years, primitive man, who lived on the brink of extinction for 100,000 years, was propelled to a civilization capable of space travel and nuclear physics.
Indeed, it was due to agriculture that the ancients had to work out a survey system to re-establish the boundaries of farm fields obliterated by the flooding rivers and to build the extensive irrigation channels required for food production. Mathematics evolved to solve these agricultural problems.
Credit must be given to farmers who produce food under the stresses of natural calamities and the uncertainties of biological organisms. Increasing stress is being exerted by people who not only want food, but land for housing, highways, recreation, wild-life sanctuaries, forestry, and other uses. Yet in the United States, it is calculated that because yields have risen since 1940, and although a much larger population now exists, for each acre of land cropped in the seventies, one acre has been released for optional use. Agriculture has provided "more living space" by freeing land for other purposes.
Before I return to answer my two questions, I would like to give you a simple eight-word definition which will most certainly be a key to the answer.
In the old days, the king called in his three wise men to tell them he'd become interested in economics. "But," he said, "it sounds confusing and complicated. I want you to go out and boil it down for me in a way that I can understand."
Nine months later, they came back and reported they had completed the job. They said they had condensed all of economics into a single book of two hundred pages. The king said, "That's too long. I don't have time to read that much."
He had the chairman beheaded, and told the other two: "Now, I want it boiled down."
They came back in thirty days and said they had economics boiled down into a single chapter of twenty pages. The king said, "That's too long, I don't have time for it."
He had the chairman beheaded, and turned to the remaining wise man: "You know your job. Now, boil it down."
"Yes sir, Mr. King."
This wise man came back in three days. "Mr. King, I think I have it. I have boiled down the entire subject of economics into a single sentence of eight words."
The king said, "That's fine. I have time for that. What is it?"
"There's no such thing as a free lunch."
I tell that story because I think those eight words sum it up pretty well. Economics is a description of what you and I, and others like us, do in order to get our share of the things that are in the real world around us.
Unfortunately, there are a lot of people around--you know them and I know them-who think that there is such a thing as a free lunch.
Are we prepared to pay the price in dollars, personal input, change of diet, change in attitudes, our every-day priorities, our freedom? If we are, then the answer to my questions must be "Yes".
First, can we feed ourselves? Canada produces enough food for sixty million people.
However, when we look at this production, a very large percent is cereal grain. We are not self-sufficient in many other agricultural products. We are, in many years, importers of livestock products. A large part of our vegetable consumption comes from the United States. Cheese is imported. Our coffee, tea, and sugar too. As world demand increases prices on these commodities, will we continue to pay the price, or will we change our eating habits to use the products that Canadian farmers can produce in surplus?
One major factor will be the economic returns to farmers. Over the last thirty years, government, business, and consumers have, in many instances, ignored the primary producer or just taken it for granted that our food would be produced-the kind we wanted-in quantities demanded and at a price far below economic production costs. Over this thirty years, a silent revolution has taken place-farmer after farmer has given up. Age has removed many, many have gone broke, few young people were prepared to face a difficult and demanding profession, and still more were unable to go into farming because of escalating costs of land, equipment, seed, livestock, and interest on borrowed capital. As a result, we now have less than 6% of our population engaged in primary agriculture.
No longer can, or will, Canadian farmers continue to produce at a loss. As businessmen, their cost accounting practices are as sharp as any other segment of business. While a few may have no other choice than to produce at any price, they will not produce a significant percentage of our total requirements.
Prices to all segments of farm production must not only meet farm production costs, but return a reasonable profit when the product leaves the farm gate.
Canadian farm products can, and will, be increased, but not if the production over consumer needs sets the price. We have tried that, with absolutely disastrous economic results. If we consume three million hogs a year, then any extra production over consumption must not set the price. The same can be said for beef, eggs, chicken, turkeys, grain, fruit, vegetables. If it does, then what will be the consequences? Farmers will change their production patterns. In grain, providing say barley seed is available, the farmer can change from wheat-probably a one-year cycle. If he decides to go into livestock, then large capital outlay is required and, depending on his operation, a one-to-three-to-five year cycle.
We've seen it happen in dairy production, in beef-cow-calf farming, in hog breeding and feeding lots. There is every evidence, if you read the livestock market reports, that our beef cycle will be drastically affected this year-the percentage of cows and heifers going to market has increased, resulting in a depletion of our cow herds, caused by unsettled markets, lack of confidence on the part of the breeders, high feed costs, high money interest. If this trend continues this fall, beef costs to the consumer will not only continue to be relatively high in 1974-1975, but this will be reflected for at least three years.
As for food costs being high--don't look at the farmer, maybe not even at the processor or retailer. When you get up in the morning and face the mirror, you are looking at the cause. It is our demand, our insistence on prepared foods, our dependence on convenience foods. Ask yourselves, do we need all this convenience? If your answer is "yes", then we're going to have to pay.
"There's no such thing as a free lunch!"
There are other ways to reduce consumer costs. We could change our attitudes towards recycling. I read with dismay that the Ontario Government was spending 17 million dollars for recycling plants. Can we afford this when much of our livestock can-and maybe should-be used. But it will take a major change in attitude. China, with 900 million people, has few, if any, waste problems. In China, they use their hogs to recycle wet waste.
There are many other changes that, if accepted and implemented, would not only reduce food prices, but ensure that there will be enough food to feed Canadians, and also let us provide, at a cost, food for others.
Yes, we can feed ourselves if we are prepared to pay the price. "There is no such thing as a free lunch."
Can we, the developed nations, feed the rest of the world? I don't know. What are we prepared to pay? If we don't, will we pay more through loss of freedom and our place in the world?
In the under-developed areas of the world, where an average income is $100 to $400 per year, how many pounds of grain can the people buy at this year's price of 4'2¢ per pound, of protein-rich soya beans at 10¢ per pound? They are unable, if they could afford it, to use meat as protein for many reasons: lack of knowledge, lack of transportation and refrigeration, and in some cases, religious beliefs. Our main hope for success may be in education, in teaching them to produce their own requirements. There's an old Chinese proverb, "Give a man a fish and you feed him for today. Teach him to fish and you feed him for life." Are we prepared to spend the money, but more important, the time to teach the developing countries? If so, maybe our answer could be a qualified "yes", we can feed the developing countries.
Regardless of all the foregoing, there is one major concern to all engaged in agriculture, and that is water.
Our energy situation is important, very important, but of far greater importance to everyone alive in the world today and for the generations that will follow (with world population by the year 2000 at eight billion, twice today's population) will be water.
Food production is tied directly to fresh water. Our large neighbour to the south is now running out. Estimated costs of irrigation in the mid-west and west of the United States is between 600 and 700 million dollars per year. Depths of wells have gone from 400 or 500 feet to over 1800 feet. The estimate of costs, if they find water by 1985, will be two billion dollars.
Oil is important, but the answer to feeding ourselves and others will, in the final analysis, depend on water-fresh water.
It won't be cheap. It will take government action. It will mean controls and direct loss of our freedom to use not only surface water but ground water as we like. Are we prepared to pay the price?
Ladies and gentlemen, if we care about feeding Canada and the world we live in, and our children, our grandchildren and all that follow, let us remember . . . "There's no such thing as a free lunch!"
Mr. Moles was thanked on behalf of The Empire Club of Canada by Mr. J. A. William Whiteacre, a Director of the Club.