What is the current state of our agricultural systems?
We are in a precarious situation where our food systems are heavily dependent on fossil fuels and are both energy-intensive and environmentally damaging. It takes 10 calories of fossil-fuel energy to produce just 1 calorie of food energy, which is unsustainable and far from efficient. The system relies on synthetic fertilisers produced from natural gas and is heavily dependent on fossil fuels. This not only makes it vulnerable to energy price fluctuations but also contributes significantly to climate change. Additionally, this system has resulted in over-reliance on large-scale monoculture, which is both environmentally damaging and financially unstable.
What are the financial risks associated with extractive agriculture?
Extractive farms are exposed to high and volatile input costs, such as fertilisers, pesticides, seeds, and fuel. Despite rising commodity prices, input costs have risen even faster, pushing many farms into financial distress. This has led to an unsustainable model where farms must scale up continuously to remain viable, making them more vulnerable to external shocks like weather changes and market fluctuations.
How does extractive agriculture degrade natural resources?
Soil degradation and erosion are significant issues, as farms lose their most valuable asset—fertile soil. Overuse of groundwater for irrigation is depleting aquifers, and the reliance on genetically modified crops has led to the rise of resistant superweeds and insects. Moreover, biodiversity loss is severe, with studies showing drastic declines in insect populations.
What role does climate change play in the risks faced by industrial agriculture?
Industrial agriculture is highly vulnerable to climate change, particularly extreme weather events such as droughts, floods, and unseasonal frosts. Farms that lack resilience, such as those practising monoculture, are especially at risk, as they depend on uniform conditions that are increasingly disrupted by climate change.
What are the health risks associated with current agricultural practices?
The use of fossil fuel-based fertilisers and pesticides has led to significant environmental pollution, contributing to health issues such as cancers and other chronic diseases in rural and agricultural communities. The hidden costs of these practices, including health care expenses, far exceed what consumers spend on food.
How are companies and investors being impacted by the current agricultural paradigm?
Companies are increasingly required to disclose their environmental impacts, and new regulations, such as the EU's Regulation on Deforestation-free products, are being implemented to curb harmful practices. The financial burden of these negative externalities is rising, making the current system financially unsustainable.
What is the potential impact of shifting to regenerative agriculture?
Regenerative agriculture has the potential to restore degraded soils, reduce reliance on fossil fuels, and improve biodiversity. It also offers significant health benefits by reducing pollution and promoting healthier food production. In the face of mounting environmental and financial pressures, this transition could provide a sustainable solution to many of the challenges currently faced by our agricultural systems.
