Category Archives: economics

 

Australia is a functioning representative political democracy, but with so many important decisions being made in the economic sphere of social life, most of us are effectively disenfranchised. Key decisions about the allocation of resources, job creation or job destruction, and what form of economic development we want for our country, are too often taken by a small number of wealthy individuals, behind closed doors.

I argue that a system based on the endless and limitless accumulation of private wealth is not only socially and environmentally destructive: it is ultimately self-destructive. We have seen this already in the past 100 years with two major world wars and a seemingly endless succession of minor wars. As inequality reaches stratospheric levels in the first decades of the 21st century, the globalizing capitalist system is once again at breaking strain, and the drums of war are beating loudly yet again.

Happily there are powerful alternatives emerging, in the form of the the peer-to-peer, commons-based economy, the co- operative movement and economic democracy. All of these have natural affinities with the global food sovereignty movement. All are expressions of the solidarity economy, which Brazilian author Euclides Mance describes as being practiced daily by millions of people,

[W]ho work and consume in order to produce for their own and other people’s welfare, rather than for profit. In a solidarity economy what matters is creating satisfactory economic conditions for all people. This means assuring individual and collective freedoms, generating work and income, abolishing all forms of exploitation, domination and exclusion, and protecting ecosystems as well as promoting sustainable development.

In the context of food sovereignty, this is captured by Via Campesina leader Nettie Wiebe, who describes how the experience of working together for a common vision and cause is unifying and powerful:

To stand…and to walk shoulder to shoulder with people who all recognise that what we’re struggling for here are sustainable, nutritious, locally-based, empowering systems of farming, and that that’s key to all of us, that’s a tremendous strength…The hardships that we suffer, and the joys we have, don’t look the same, but…they’re very real in our own context. That kind of solidarity, generated of course by the political necessity of standing in solidarity with each other, has been just a powerful, powerful dynamic internationally. And it has sometimes surprised us in La Via Campesina just how powerful that has been.

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advocate, Corporate control of food, Food policy, National Food Plan

More export markets – but who benefits?

Export! Export!

A version of this article first appeared in the Coffs Coast Advocate on Saturday 18th August, 2012.

A fortnight ago the Australian Grains Industry Conference – ‘the premier industry-hosted conference for grain industry market participants and service providers’ – was held in Melbourne.

Described as a ‘high-level market event that brings together the Australian and global grain industry in a premium networking event’, this Conference was truly a gathering of the great and the good in the world of grains.

Which is why, when I heard that my colleague Fran Murrell, co-ordinator of MADGE (Mothers are Demystifying Genetic Engineering), had scored a ticket, I was fascinated to see what her impressions would be.

Grain Industry Report

She wrote to tell me that she had found the event ‘extremely worrying’. It’s not that anything particularly out of the ordinary happened. What’s shocking is simply the very ‘normality’ of how the large corporate players view the food and agricultural system as an arena purely for speculation and profit, regardless of the destructive social and environmental consequences of their actions.

This was made crystal clear when one speaker said that a significant reduction in the outrageously high levels of food waste – 50% or more of all food produced in developed countries is wasted, by some estimates – would represent a ‘threat’ to the burgeoning ‘investment opportunity’ that large-scale land acquisitions and clearances of rural and indigenous people in Africa and South America represents.

Let me illustrate the sheer, chilling insanity of this perspective by reference to a few facts about food waste, via Stuart Tristram’s excellent Waste: Uncovering the global food scandal:

  • ‘the irrigation water used globally to grow food that is wasted would be enough for the domestic needs (at 200 litres per person per day) of 9 billion people’
  • ‘if we planted trees on land currently used to grow unnecesssary surplus and wasted food, this would offset 100% of greenhouse gas emissions from fossil fuel combustion’
  • ‘all the world’s one billion hungry people could be lifted out of malnourishment on less than a quarter of the food that is wasted in the US, UK and Europe’

Just let those facts – and there are many, many more – sink in for a minute. And then reflect on the claim, endlessly repeated by the government and most media, that the world ‘must double food production’ by 2050 to meet ‘growing global demand’. There’s a very good case to be made, in my view, that the real challenge we face is how to curb wasteful overproduction.

Yet our federal government, in its wisdom, has placed increased production of commodities for export as the centrepiece of its ‘National Food Plan’, out for public consultation until 30 September. The grains industry, naturally, takes its cue from the urging of the Prime Minister, that Australia, in addition to being Asia’s quarry, also become its ‘food bowl’. It’s focused on supplying meat, wheat and dairy commodities to the Asian middle class, also exporting in the process all the diseases associated with diets based largely on these products.

The financial industry was also well-represented at the grains industry conference. Its spokespeople regard agriculture as the ‘shining sector of the economy for the next five years’. In their worldview, it’s assumed that the sale of Australian land and agricultural assets to sovereign wealth funds, global corporations and foreign investors will benefit Australian farmers and consumers.

Meanwhile US multinational Cargill is positioning itself as the farmers’ friend, as it increases its control of the Australian Wheat Board; as well as domestic grain storage, handling and marketing infrastructure. As Fran pointed out to me, while we’re being asked to trust that this type of foreign investment is in all our interests, we shouldn’t forget that Cargill is currently being prosecuted by the Argentinian government for large-scale tax evasion.

The corporatisation of our food system means that there will be a relentless and constant drive for efficiencies, all in the name of ‘global competitiveness’ and ‘productivity’. Amongst other things, that means far fewer farmers. The numbers of Australian grain farmers have fallen from 40,000 to 22,000 over the past thirty years. We can expect that trend to continue, even accelerate.

But don’t worry – it’s all going to be fine, because we’ll have new export markets!

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advocate, Corporate control of food, Cost-price squeeze, Food policy, Global hunger, National Food Plan, Supermarket Duopoly

A food plan for corporate agribusiness

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A National Food Plan, but not for us

A version of this article first appeared in the Coffs Coast Advocate on Saturday 20th July, 2012

On 17th July, the Federal Government released its green paper for a National Food Plan. This is the next step in the development of Australia’s first-ever national food policy. The first was the release, in June 2011, of an Issues Paper, followed by a two-month period of consultation and invite-only roundtable discussions. The green paper will also be followed by a two-month period of public consultation, and I’ll provide the relevant link at the end of the article.

During the first phase of public consultation, 279 written submissions were received from Australians, many of them from ordinary members of the public, and from community groups and small farmers. One of them was Graham Brookman, CEO of a permaculture farm (foodforest.com.au) in Hillier, SA, which produces 160 varieties of fruits, nuts and vegetables.

DAFF

The Food Forest is a family farm, run by Graham, his wife Annemarie, and their two children. The family’s aim is to ‘ demonstrate how an ordinary family, with a typical Australian income, can grow its own food and create a productive and diverse landscape’.

Graham took the trouble to write 13 pages in his submission to the National Food Plan consultation. He pointed out that ‘the dogma that internatioanl free trade will solve food insecurity has been proven to be faulty over centuries, billions continue to starve while others die of obesity in a world with relatively free movement of food’.

This would seem to be a simple statement of facts. Close to half the world’s population is malnourished in one form or another, either because they have inadequate intake of key micronutrients, or excessive intake of the wrong types of (highly processed) foods. Free trade, vigorously pursued by Australia and many other countries for the past few decades, has not resolved these issues; indeed there is a good argument that it has made them worse.

But in the green paper, the Federal Government has shown, to quote a(n) (in)famous lady, that ‘it’s not for turning’ when it comes to free trade. On the contrary, it’s full steam ahead on the trade liberalisation agenda, and we can expect increasing amounts of food imports. The Government wants your opinion on free trade – but only for suggestions on how Australia can export more, not whether the free trade agenda itself might require further thought.

Then Graham pointed out that the impacts of climate change, peak oil and geopolitical instability mean that ‘the whole food system needs rethinking and massive effort needs to go into rebuilding the skills of our agricultural producers such that the nation can remain domestically food-secure’.  To the free trade dogma, Graham adds the ‘free market dogma [which] has given Australia the duopoly of Woolworths and Coles who have driven farmers from the land by reducing profit margins for producers to miniscule levels and requiring them to use every technical device available to maximise yields.’ Broccoli crops in the Adelaide Hills, he points out, are ‘sprayed with biocides approximately 30 times to meet the cosmetic standards of the supermarkets.’

But Graham and the Government are inhabiting parallel universes, it seems. According to the green paper, Australia ‘has a strong, safe and stable food system’ and ‘Australians enjoy high levels of food security’; our food industry is ‘resilient and flexible’ and we ‘have one of the best food systems in the world’. A key plank of our national food strategy should be about us becoming ‘the food bowl of Asia’, in the Prime Minister’s words. This is a frankly preposterous example of wishful thinking, given that even on the most optimistic scenarios, Australia would supply food for no more than 1% of Asia’s 3.5 billion people.

So it’s no surprise that Graham, on reading the green paper, wrote to tell me that, ‘in terms of a sustainable food future for Australia there is virtually nothing in the ‘national food plan’ or its structure that is acceptable’.

There’s a simple reason for this: the ‘National Food Plan’ is actually a Plan for corporate agri-business and retailers, not ordinary people. If we want a food plan that meets our needs, we’ll have to work on it ourselves.

occupy_our_food_supply_new

If you want to read the green paper and tell the Government what you think about it, follow this link: http://www.daff.gov.au/nationalfoodplan/process-to-develop/green-paper.

Update: 8th November 2013

Following the election of the conservative Liberal-National Coalition, led by Tony Abbott, there is considerable doubt about the future of the National Food Plan. Apparently the new administration is not that happy with it, and the proposed Australian Council on Food has already been abandoned. This is not to suggest that we are likely to see a change of tack on free trade or any other aspects of the big corporate agenda. On the contrary, we are likely to see an intensification of that agenda, via the so-called ‘Northern Foodbowl Plan’, of which more in a later post.

 

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advocate, Backyard Gardening, Resilience, Self-sufficiency, Small-scale farming, Urban agriculture

The rise of the dachniks

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This article was first published in the Coffs Coast Advocate on Saturday 26th May, 2012

The rise of the dachniks

Last time I began telling the story of Angelo Eliades and his permaculture food forest in his suburban backyard in Preston, Melbourne. In response to that column, a friend sent me a link to some research that was carried out a few years back into the scale and productivity of agro-foresty and bio-intensive small-scale production in Russia. This research formed the substance of a PhD thesis submitted by Leonid Sharashkin in May 2008 at the University of Missouri.

This column will be in parenthesis to Angelo’s story, which after all, has a lot to do with the yields achievable in small-scale food forests. Next time I’ll return to his story proper.

If you’re really keen on the Russian research, you can download the full thesis – a mere 248 pages of text and tables – via ‘soilandhealth.org’. Here’s the (very) short version: Russia is a nation of small-scale gardeners, or dachniks; and they are very, very good at it. Some 35 million households, two-thirds of the country, grow a fairly significant portion of their food on a dacha, a small-scale garden plot with an average size of 600m2, belonging to urban dwellers, either privately or in a co-operative form.

The tens of millions of current-day dachniks are following in the footsteps of a centuries-old tradition of small-scale, self-reliant agrarian communities. As Sharashkin notes, this means that these practices did not suddenly re-emerge en masse in response to the economic collapse in the post-Soviet Russia of the early 1990s, but rather have deep historical and cultural roots that go well beyond the food production and economic dimensions.

Small'scale intensive production in Russia
Small-scale intensive production in Russia

Yet the productivity of the dachniks is impressive. Sharashkin reports that in 2004, they accounted for (conservatively) 51% of total agricultural output by value, around $US14 billion, or 2.3% of Russia’s GDP; a larger contribution than steel manufacturing or electricity generation. And when the focus shifts to staple food crops, as opposed to commercial crops for export, the figures are truly remarkable. Over 90% of Russia’s potatoes, over 80% of its vegetables and fruit, and over 50% of its meat and milk, are produced on small plots, with little or no machinery and minimal energy inputs.

And all this is achieved on a mere 2.9% of the country’s agricultural land, compared to commercial agriculture, which requires the other 97.1% of the agricultural land to produce 49% of total output.

Such extraordinary productivity is explained by two principal reasons. First, the care and attention that comes with labour-intensive gardening for self-provisioning. Secondly, the embrace of polycultures and perennial species, rather than single crop monocultures, characteristic of agro-forestry: plantings that ‘are intentional, intensive, integrated and interactive.’

And beyond their food yields, these spaces also generate a social yield. They are places ‘where a family comes together’ and where they ‘celebrate special occasions’. Dachniks watch over each others’ plots, and they share seeds as well as gardening experiences and tips.

As Prime Minister Gillard boasts of Australia’s potential to be the ‘foodbowl of Asia’, others look to the parlous state of the Murray-Darling basin, the impacts of the coal-seam gas industry on water tables and fertile soils, the growing reality of climate change and the looming shadow of peak oil, and wonder whether we shouldn’t first focus on feeding ourselves. In this debate, the dachniks of Russia have proven that ‘decentralized, small-scale food production is possible on a national scale’.

Which is why we should celebrate the growth of community gardening in this country, and in our region in particular. On Saturday, 2nd June, the Bellingen High School Community Garden will celebrate its first birthday, and everyone is welcome. There will be activities for children from 10.00 a.m., the pizza oven will be fired up for lunch, as well as live music and a photo exhibition. Come along and see what Charlie Brennan, Olivia Bernadini and their many helpers have achieved over the past year. For more details, visit the Facebook page of the Bellingen Community Gardens Association.

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advocate, Co-operatives, Fair Food systems, Food Hubs, Local and regional food economies, New market mechanisms

Food Hubs – essential infrastructure for a Fair Food System

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Food Hubs

A version of this article appeared in the Coffs Coast Advocate on Saturday 21.4.12.

Last time I wrote about the efforts underway in Girgarre to turn a new page in the history of the Australian co-operative movement, by launching a ‘Food Hub’ manufacturing centre that is co-operatively owned and run by workers, growers and the broader community.

I’m happy to report that while Heinz has now sold its Girgarre site to another buyer, the Goulburn Valley Food Action Committee has found an alternative greenfield site in Kyabram, and are planning to launch the first of their new products, designed by Peter Russell-Clark, by the middle of May. The results of their feasibility study have now come in, and they show, according to Chairperson Les Cameron, that ‘demand for Australian product is greater than ever before…the Heinz approach of creating a product, marketing it and then trying to sell it through the major supermarkets is no longer the way to go. [The study] is showing a number of significant, medium-size companies are looking for Australian product; and sub groups who will not buy anything else.’

So far, so good. I’m following these developments with great interest. When their products are available in Coffs Harbour, I’ll be sure to let you know!

But back to the question: what is a Food Hub? In essence, it’s a conscious attempt to scale up local and regional food economies. If there’s been a single persistent and fairly persuasive criticism of the local food movement over the years, it’s this: that while its aims and principles might be great, and while farmers’ markets and community-supported agriculture might work quite well for smaller producers, local food as a whole actually fails to deliver the goods in terms of offering reliable markets with sufficient throughput and volumes for commercial-scale farmers.

That function, so this reasoning goes, can only be filled by central wholesale markets; or, in this country, by supermarket distribution centres.

The Food Hub is an attempt to tackle this criticism head-on.  Originating in the United States in the 1990s, Food Hubs have expanded across that country, with more than 100 in operation, and many experiencing strong growth and expansion. Their primary functions are typically the aggregation, marketing and distribution of local fresh and processed produce. In some ways they resemble a wholesaler, but with the key difference that their mandate is to source as much local produce as possible, and channel it into local businesses, institutions and households. In the process they create more demand for local food, help build the capacity of local producers, and get much better returns for farmers than they receive in the central market system.

All the things a Local Food Hub can do
All the things a Local Food Hub can do

Government purchasing power seems to have played a big role in fostering the growth of Food Hubs, with 40% counting among their clients public institutions such as schools and hospitals.

According to a recent survey of Food Hubs by the US Department of Agriculture, some of the longer-running hubs have become significant local businesses. One has 100 suppliers, including many small and mid-sized producers, and offers over 7,000 products. This Hub owns a 30,000 sq.ft. warehouse and 11 trucks, with 34 full-time employees and over US$6 million in sales in 2010.

But Food Hubs can do much more than aggregation, marketing and distribution. As in the Goulburn Valley, they can combine manufacturing and processing with innovative product development and multiple traineeships. The Local Food Hub in Charlottesville has a five-acre demonstration farm, where they run training days for local growers and offer apprenticeships and internships for the next generation of farmers. 20% of the food grown on this farm is donated to local food banks and anti-hunger organisations.

And so on. Because there’s no single business model, and because these hubs are locally-owned and controlled, responding to local needs and priorities, the forms they take will vary widely. That they are emerging and expanding at this point in time, when the existing food system is plagued by so many profound dysfunctionalities, is a cause for great optimism.

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advocate, Co-operatives, Corporate control of food, New market mechanisms, Supermarket Duopoly

Heinz Meanz Mean

Co-operation in the Goulburn Valley

A version of this article first appeared in the Coffs Coast Advocate, on 31.3.12.

The spirit of co-operation lives – in the Goulburn Valley town of Girgarre. And just as the original Rochdale ethic of co-operation was born of the necessity of finding reliable sources of non-adulterated food, so the turn to co-operation in Girgarre has also been driven by necessity. Not of finding safe food, but of safeguarding jobs, businesses and livelihoods.

This necessity materialised when the chill winds of ‘globalisation’ swept through Girgarre (pop: 633) and the surrounding district. Those winds took the form of an announcement in May 2011 by the Heinz Corporation that it was closing its tomato processing plant and laying off 146 workers. Estimates suggest another 450 jobs will disappear through the flow-on effects; and the livelihoods of many tomato growers will also be put at risk.

Globalisation dictates that capital must flow to those places where it can be most profitably invested. In this instance, that ‘law’ required the closure of three Heinz factories in Australia and their relocation to lower cost New Zealand. The tomatoes will be sourced from even lower-cost Thailand. In announcing the closure, Heinz took a side swipe at Australia’s highly concentrated supermarket sector as a major reason why it was no longer profitable to maintain their operations here.

Within weeks of the closure being announced, a coalition of growers, workers and others in the local community began exploring what I would term ‘the Argentinian solution’. In late 2001, as the Argentinian economy was imploding under the burden of an unpayable debt, and workers were being laid off in their tens of thousands, a movement known as the fabricas recuperadas – ‘recovered factories’ – began.

What these workers did was not simply ‘occupy’ their workplaces in pursuit of demands for better wages and conditions. They literally took them over and made them productive as going concerns, run as co-operatives, in order to preserve their own jobs and livelihoods. Even as the economy has recovered, many of these worker co-ops have continued to exist, and some have thrived. The movement has been immortalised in The Take, a 2004 documentary made by Naomi Klein and Avi Lewis.

The Take - the story of the 'recovered factories' movement in Argentina
The Take – the story of the ‘recovered factories’ movement in Argentina

What’s distinctive about Girgarre is that it’s not just workers involved in the push for the take-over (via purchase) of the Heinz factory and its rebirth as a co-op. It’s the workers in co-operation with the growers; and both in co-operation with the broader community. Remember that the history of co-operation in Australia has been marred by mutual suspicion between producer and consumer co-operatives, translating into a palpable failure to co-operate. This is a conscious attempt to turn a new page in that history.

One of the leading figures in this effort, Tony Webb of University Technology Sydney, told me that:

“The idea grew from just simply replacing Heinz with its out-dated model of competitive relations with suppliers and customers and production of a limited range of internationally branded products for the retail market.  We want to develop new niche markets in the retail and food service sectors for a wider range of agricultural products. The co-op will integrate local warehousing and distribution logistics and a regional food industry training centre on-site, and incorporate sustainable energy, water and waste practices into the production facilities. In short, it aims to build co-operative links between many of the elements of the paddock-to-plate food chain as part of a sustainable regional food hub.”

The breadth of this ambition, and the spirit of co-operation that the initiative has inspired to date, has also crossed party political lines, with the Goulburn Valley Food Action Committee (find it on Facebook!) attracting significant local, national and international interest. Celebrity Chef, Peter Russell Clarke, is helping out with the marketing campaign. Offers of finance to buy and equip the factory have been made.

Meanwhile, Heinz is refusing to sell the site to the co-operative, rejecting their offer of $750,000, three times what the company paid twenty years earlier. Worse, they have, according to Webb and his colleague Les Cameron of the National Food Institute, engaged in a ‘scorched earth’ policy of ‘industrial vandalism’ by stripping the plant of any and all equipment of value, even down to the rat-proof fencing.

But now momentum has been generated and the co-op members have the bit between their teeth. They are looking for a greenfield site, and are launching a campaign for one million Australians to contribute $50 each to become members of a national venture aimed at inspiring – and financing – similar Food Hub ventures elsewhere.

What’s a Food Hub, I hear you ask? More on that next time.

Update, October 2013 – The GV Food Co-op is now trading and inviting supportive members of the public to join as members. To learn more, visit their website: http://www.gvfoodcoop.com.au/

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advocate, Co-operatives, Coffs Coast, Fruit growing

Idealism and pragmatism – the Co-operative movement in Australia

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Co-ops in Australia

A version of this article first appeared in the Coffs Coast Advocate, Saturday 17th March 2012.

Co-operatives represent the ideal of business with genuine ethics, not just window-dressing and ‘corporate social responsibility’ statements. From the social perspective, it’s hard, at least in theory, to get more ethical than the workers in a business also being the owners, and running it for their mutual benefit, rather than to maximise profits for distant shareholders.

As is so often the case, theory and ideals often crash against the harsh test of real life conditions, and human fallability. The ideal of a co-operative commonwealth, appealing to people’s higher values rather than just naked self-interest, is a powerful one, but in practice co-operatives have fallen far short of the vision of the Rochdale pioneers.

The case of farmer co-operatives in Australia, whose history was the topic of a book published in 2006 by Gary Lewis, called ‘The Democracy Principle’, is instructive.

For farmers, co-operation had an extremely sound economic rationale, as Lewis explains. The more farmers jointly could exert ‘ownership and control of the inputs, supply, processing and marketing of farm products’, the more they were able to take control of their own destinies, as regards avoiding the fate of being ‘price-takers’; and so better ensure their own viability.

The Coffs Coast region was home to one of Australia’s premier agricultural co-operatives: the Banana Growers Federation. Operating transportation services and a single marketing desk on behalf of its members, the BGF enabled NSW growers on the Coffs Coast to rise to a position of dominance in the Australian industry. It wasn’t by accident that the ‘Big Banana’ was established here as a tourist attraction. At its peak in the early 1970s, the BGF boasted around 18,000 grower-members.

The Big Banana, Pacific Highway, Coffs Harbour
The Big Banana, Pacific Highway, Coffs Harbour

There were many factors which brought about the demise of the banana industry in our region, and amongst them we have to include the self-interest of some growers who abandoned co-operative principles to pursue their own self-interest through separate deals with buying agents, undermining co-operative unity in the process. It’s been said to me that although the blueberry growers now enjoy a similarly strong marketing position to that once held by the BGF, through the single desk operated by Berry Exchange, the same dynamic that so afflicted the banana growers may already be underway.

History records that in 2004 the BGF was wound up with a mere 428 grower members. The country as a whole is losing farmers at a rapid rate. The fall in the number of dairy farms across Australia has been steep: from nearly 82,500 in 1950, to 7,500 in 2010. A further drop is expected now, with the impacts of the supermarket milk price war being passed down the supply chain.

Could it have been different? We’ll never know, of course, but certainly many farmers, and their leaders, did themselves no favours, according to Lewis, by effectively abandoning any genuine commitment to ‘the democracy principle’, and broader community and social welfare, in preference to their own narrow self-interest.

‘Farmers generally were inclined to squeeze every last drop from their co-ops’, he writes, ‘and neglected to invest in them adequately or in anything not immediately enhancing the bottom line, such as education or federations. With few exceptions, it was a short-sighted and stingy movement.’

The building of an effective co-operative movement in Australia – whether by farmers, workers, consumers, or all three – has, it would seem, been stymied by parochialism, inter-state rivalries, individualism, unhelpful legislation, the lack of substantial co-operative financing, and the inability to build a strong national movement promoting ‘co-operative unity and a co-operative consciousness’. Ironically, Lewis concludes, these are ‘all of the things which co-operative idealists had long argued for and which had been comprehensively quashed by pragmatists’.

The flame of co-operative idealism, however, is not yet quite snuffed out. It’s being revived, amongst other places, in a small town in western Victoria called Girgarre. Next time we’ll look at what’s happening there.

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advocate, Alternatives, Co-operatives, Growth paradigm

Co-operatives – business as unusual

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Not Business as Usual

A version of this article first appeared in the Coffs Coast Advocate on 3rd March 2012

The United Nations General Assembly, at its 65th plenary meeting on 18 December 2009, adopted Resolution 64/136, which proclaimed 2012 as ‘the International Year of Cooperatives’. This was in recognition of the role played by cooperatives in ‘promot[ing] the fullest possible participation in the economic and social development of all people’, as well as their growing emergence as ‘a major factor of economic and social development’ and their ‘contribut[ion] to the eradication of poverty.’

To talk of the ‘growing emergence’ of cooperatives as major economic players is somewhat misleading. Cooperatives as business entities have a history dating back to the 18th century in England and France. The modern ‘cooperative movement’ as a distint entity dates to the formation of the Rochdale Society of Equitable Pioneers in 1844, in Lancashire, England. Building on the ideas of factory owner, social reformer Robert Owen, and Dr William King, the Rochdale pioneers were motivated by the simple philosophy of self-help: they wanted access to quality (i.e. unadulterated) food at a fair price; and so they opened a member-owned food co-op.

IYCLogo_original

Trying to learn the lessons of the failures of many of the earliest cooperatives in the first decades of the 19th century, the Rochdale Pioneers set down a series of principles, which have formed the guiding compass of the cooperative movement ever since. They constitute what’s termed ‘the cooperative difference’; what it is that distinguishes cooperatives from traditional, privately-owned and operated, businesses.

As restated by the International Cooperative Alliance (ICA) in 1995, the key principles are as follows: open and voluntary membership, based on non-discrimination; democratic member control (one member, one vote); member economic participation, and reinvestment of the surplus to develop the cooperative and the cooperative movement; autonomy and independence, based on the value of self-help; education of cooperative members and the general public about the benefits of co-operation; co-operation among co-operatives – strengthen and build the movement; and concern for their communities.

From humble beginnings, the cooperative movement spread rapidly, and was widely embraced by farmers in Australia from the 1880s, beginning with dairy farmers on the NSW South Coast. However, for reasons I’ll look at it in a subsequent column, the cooperative movement in Australia never reached the high ideals or the vision of the Rochdale pioneers to ‘create a “Cooperative Commonwealth”, a democratic, social-economy rising from a decentralised network of consumer cooperatives (shops) linked to primary producer cooperatives through a giant wholesale trading entity creating capital to fund other cooperative enterprises in the services, manufacturing and tertiary sectors, coordinated and governed by a Cooperative Union, a grand “parliament”, of democratic organisations.’*

That said, the cooperative movement now numbers in the hundreds of thousands, and embraces over 1 billion members across the world, with over 100 million employees, more than all the transnational corporations ‘put together’, according to Dame Pauline Green, President of the ICA and currently in Australia promoting the International Year of the Cooperative. She adds that the  300 largest coops are together worth an impressive US$1.6 trillion.

The ICA’s aim is to make cooperatives ‘the fastest growing business model in the world by 2020.’ Encouraging trends, says Dame Pauline, include the 79% switch in deposits to the UK Cooperative Bank from the major high street banks ‘in the last two years’, a rapidly emerging cooperative renewable energy sector, and cooperatively-run schools. Dame Pauline speaks of a ‘cooperative renaissance’, led by ‘community-based cooperatives, people coming together and saying actually we can deal with this, we are going to lose our village shop if this goes on so let’s all fall in together as a cooperative and let’s keep our shop going.’**

What are the prospects for this renaissance in Australia? In a later column I’ll look at a project for a grower-worker-community-owned cooperative based out of a recently-closed Heinz plant in Girgarre, Victoria.

* This quote is from from Gary Lewis’ 2006 book, The Democracy Principle, which I highly recommend for anyone interested in the history of farmer coops in Australia. It’s held in the Coffs Harbour Library.

** The quotes from Dame Pauline Green are from an interview published on The Age’s “The Zone”, on February 27, 2012: http://www.theage.com.au/national/full-transcript-dame-pauline-green-20120226-1twcz.html.

advocate, Backyard Gardening, Community gardening, Self-sufficiency, Small-scale farming

Our shrinking trust horizon

The ‘trust horizon’, and what it means for the future

A version of this article appeared in the Coffs Coast Advocate on 11th February 2012

“Politicians typically make a bad situation worse, as quickly as possible. The [economic and political] systems that we have established have become sclerotic and unresponsive. Hostage to vested interests. They have no ability to adapt quickly to provide for changes that happen very rapidly… So I don’t look for solutions from there….There aren’t really any mechanisms for these large bureaucratic institutions to offer anything that will help…­­­What they’re far more likely to do is suck resources to maintain the centre, like a body that’s hypothermic, cuts off circulation to the fingers and toes to preserve the temperature of the core…Unfortunately for us, we’re the fingers and toes, we have to look after ourselves, nothing is coming from the top down.”

Nicole Foss, speaking with Italian interviewers in January 2012.  

Nicole speaks of the diminishing ‘trust horizon’: how large, centralised political institutions that have evolved over the last few hundred years are losing, and will continue to lose, their legitimacy; and with it, the ability to impose norms and rules that most people will accept. “The response these institutions typically have”, says Nicole, is “surveillance, coercion and repression”. Recent police actions towards the Occupy movement in the United States would seem to confirm this assessment.

The solutions Nicole proposes to the converging financial and energy crises – and she stresses that these are not solutions to maintain “business as usual”, which is “no longer possible”  – are grassroots, “from the bottom up”. The starting point is the recognition that the large centralised systems on which we have come to depend will, over time, begin to fail to “deliver the goods and services that we have come to rely on”.

Grassroots initatives, on the other hand, will work, according to Nicole, because they are based within the ‘trust horizon’.  “Where trust still exists”, says Nicole, “systems working within it can operate really quite well. The critical thing is that they’re small, they’re not bureaucratic, they’re responsive, they make the best use of very small amounts of resources, because there’s no enormous administrative overhead…It is amazing what can be done at a very small scale.”

Hearing this, I’m reminded of the concept of ‘square foot gardening’, popularised by Mel Bartholemew, who claims that his raised bed intensive method achieves the same yields as conventional gardening, but at half the cost, a fifth of the space, a tenth of the water, five per cent of the seeds, and two per cent of the work. Such claims might appear exaggerated, but there are impressive examples of substantial food production in small spaces with less inputs. And just last week, we learned that backyard chooks are producing as much as 12 per cent of the nation’s total egg production, according to the Australian Egg Corporation.

The Square Foot Garden
The Square Foot Garden

But there’s no time to lose in building local economies and social systems: “The key point is, we have to do it right now, because we don’t have a lot of time before we start to see centralised systems failing to deliver what they have delivered in the past.”

What’s the glue underpinning the newly configured trust horizons? Relationships and community. “It’s the strongest approach”, says Nicole. “We do need to do things at an individual level, because if we are on a solid foundation ourselves, we can help others. But we must build community: relationships of trust are the foundation of society.”

“So we need to know, and work with, our neighbours”, Nicole continues. “ We need connections, family and community, so that we’re less dependent on money. In many parts of the world where people have little or no money, their societies function entirely on barter and gifts, working together, exchange of skills – this works as a model, at a small scale. It’s this kind of structure that we need to rebuild.”

Nicole Foss will be speaking at the Cavanbah Centre, this coming Saturday, 11th February, from 12 pm to 2.30 pm. Gold coin entry, light lunch for $5.

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advocate, Alternatives, Ecological constraints, Growth paradigm

The Master Resource

Nicole Foss – Energy:  the ‘Master Resource’

A version of this article appeared in the Coffs Coast Advocate, 6th February 2012

This is the second of a series of three articles outlining the thought of Nicole Foss, who will be speaking at the Cavanbagh Centre in Coffs Harbour on Saturday, February 11, from 12 pm – 2.30 p.m.

“Energy is the master resource. There is no substitute for it. If your total amount of absolute energy is declining, you are going to have to face consequences as a result. Other societies have lived on an energy income, [whereas] our societies have been based on a massive energy inheritance, in the form of fossil fuels. We burn probably 400 years’ worth of the Earth’s primary production every single year. But production from that inheritance is peaking, and you cannot continue to increase the flow-rate from a finite inheritance, [especially] when what we have left is the difficult, expensive-to-produce fraction…We are having to re-invest a significant amount of the energy we produce into the process of finding more energy. So we have less available as a surplus- net energy, or Energy Returned on Energy Invested (EROEI) –  to actually do anything with, and that is going to have major implications…”

This is how Nicole Foss explains ‘Peak Oil’. The key term is ‘flow-rate’, or EROEI. Fifty-to-eighty years ago, when the ‘super-giant’ fields and the ‘gushers’ were first discovered, the EROEI was 100:1. Now it’s reduced by 90%, to 10:1. To maintain our current level of societal complexity, Nicole argues, we probably can’t afford to go much lower than that; yet many of the currently available alternatives have significantly lower ratios.

Ethanol, for example, is estimated to have an EROEI of between 1.4:1 to 2:1; Nicole argues that corn-derived ethanol is in fact less than 1:1. Nuclear power has a slightly better EROEI at around 3:1, but comes with a host of other issues, as the events at Fuksuhima last March demonstrated so graphically. There is an abundance of coal, but if it is substituted en masse for oil and natural gas, then its EROEI will drop sharply; and of course we can hardly forget that burning coal is a major contributor to the warming of the global climate.

The EROEI of renewables like solar panels and wind power is a hotly debated topic, with some suggesting flow-rates of less than 10:1, while others say that the latest thin-film solar technology has an impressive EROEI as high as 40:1.

peak-oil

Nicole however argues that we currently lack the production capacity and the infrastructure to make a large-scale transition to renewable energy sources; and that because of dynamics in the financial system, we are running out of time to mobilise the necessary investments. In particular, she points out that there has been a ‘chronic under-investment in grid capacity’; and that a ‘monumental investment’ would be required to re-tool the grid in order to make it fit for the purpose of channelling distributed energy generated by solar PVs located on private homes and businesses.

The main message is that ‘there are no easy answers’, and we are going to have get used to the idea of ‘doing with less energy; business-as-usual in not going to be option, reality is not going to negotiate with us’. The ‘hydrocarbon age’ will be recorded as a  relatively brief blip over the long-scale of human history.

Energy is a ‘major driver’ of economic activity; , and indeed ‘there’s an almost perfect correlation between energy and economic growth’. It follows that as we move from an era of energy surplus to energy deficit, we are moving from economic expansion to economic contraction. While this will be driven by the logic of the global financial system  in the first instance, the energy constraints will mean that attempts to restart the motor of growth will constantly bump up against physical limits. There will be no ‘de-coupling’ of economic growth from available energy sources. What we’re faced with is ‘not a stasis, but a de-growth scenario’.

In the final article, we will look at the implications of Nicole’s analysis, for individuals and communities.