27.01.2024
Building trust
Dear readers,
“Rebuilding Trust” was the motto of this year’s World Economic Forum (WEF) in Davos. A possibly record-breaking number of heads of state and heads of government made the journey to Davos and exchanged ideas, experiences and opinions with representatives from international organizations, NGOs and economic leaders. Trust is developed from the making of personal contacts – especially in a digitalized (AI) world.
The new Argentinian President Javier Milei reminded everyone of a few historic facts in his noteworthy address to the economic leaders present at the WEF. Capitalism has created prosperity and lifted the majority of the world population out of poverty. Markus Somm has provided a summary of the address in his Nebelspalter memo. “In 1800, some 95 percent of the world population lived in abject poverty (...). Now, only 5 percent of the global population are still considered to be extremely poor.”
Poverty always goes hand-in-hand with hunger. The development of productive agriculture around the world has helped to combat hunger and starvation. The Swiss agricultural economist Bernard Lehmann, Chairperson of the High Level Panel of Experts on Food Security and Nutrition at the UN-Committee World Food Security, described the performance of agriculture as outstanding in an interview with “Weltwoche grün” in December. “The population has tripled since the early 1960s. And the amount of agricultural land available decreased during this period, primarily due to urbanization.” In parallel with this, productivity per hectare has increased by a factor of 3.5 over the past seventy years. The increases in yields can be attributed to the green revolution with chemical fertilizers, conventional variety breeding (through hybridization and mutagenesis) and synthetic plant protection.
Efforts must continue towards increasing productivity levels. Because global hunger has not yet been conquered. There has even been a reversal of the trend since 2016/17. What’s more, the world population continues to increase. At the same time, the risks that agriculture faces are also rising: In its Global Risk Report, the WEF assessed the increase in extreme weather events as being of high risk in both the short and medium term. According to the WEF, risks such as a loss of biodiversity and the depletion of natural resources will come to the fore over the next ten years. It’s no surprise that (science-based) agroecology is also becoming more important for experts such as Bernard Lehmann. He is placing a great deal of hope in the new breeding technologies, such as CRISPR/Cas genome editing, which make rapid progress in breeding likely. Companies such as Bayer and Syngenta are focusing on regenerative agriculture. The differences compared to agroecology are smaller than you would think. This is because the success of agriculture in the future will ultimately rely on combining solid agricultural practice with the efficient use of all resources and the utilization of innovations. And this requires trust in a fact-based evaluation of the new solutions available.
At present, farmers in Germany have no trust their government. They have traveled in thousands to cities across the country to demonstrate against the cutting of subsidies on fuel prices. Contrary to many people’s expectations, they were shown a great deal of goodwill by the cities’ residents. A great many of these urbanites can clearly see who works hard day-in day-out to produce the food on their tables. This contrasts with the views of many German media outlets, among which the NZZ detects a lack of unbiased reporting.
Reducing the farmers’ feelings of resentment as being solely due to subsidy cuts, however, is too short-sighted. For years, the prevailing motto within the German food production and retail industries has been “the cheaper the better” ("Geiz ist geil”). Everyone in the food industry has passed on the pricing pressure to the next link in the chain – however, not without cutting off a slice of the salami for themselves. This means that, metaphorically speaking, all that is left for the farmers is the end of the sausage.
All of a sudden, the “green deals” were dictating the agenda in terms of agricultural policy. They came into being amidst the pressure caused by a number of scandals in abattoirs and butcher’s companies. And the scandals were not least caused by the growing price pressure. In addition, they were reinforced by an aggressive marketing campaign promoting a fad for all-natural foods that didn’t always rely on facts. Unfortunately, no-one thought this through to the end. On top of all this, the government’s micromanagement of the situation is now adding to the problems of farmers. The German farmers' representative Anthony Lee gives voice to his frustration: “We can deal with anything – with drought, wet conditions, flooding, storms – these are some of our occupational hazards. However, the biggest risk we have to face at the moment is from the world of politics. It is so interfering.” Regulations are making it increasingly difficult for farmers to produce food: “We are told we have to use fewer plant protection products, 50% less across the board – no-one can even explain to us where this figure has come from.” He continues by saying that this is similar to a situation in which a doctor would only have access to 50% of the usual medication – but they would still be expected to be able to heal the same number of patients. He shares the same feelings as his colleagues in that the regulations are “completely absurd and arrogant.”
Various studies have actually shown that placing similar extreme restrictions on plant protection products will result in crop failures, for example a study carried out by the European Parliamentary Research Service in 2019. Nevertheless, no-one has answered the questions of how the requisite investments will be financed and how the productivity losses will be offset by not using modern plant protection products. This is because, ultimately, sustainability has an economic and a social component. This exercise is doomed to failure if food cannot be produced or can only be produced in small quantities and to a poor level of quality. And failure is also guaranteed if consumers are not prepared or able to pay the higher prices.
The void between ambition and reality has become increasingly larger and continues to grow – and farmers are caught in the middle of this problem. The German government’s budget cuts, for example, have caused a barrel that is already full to the brim to overflow. The level of trust between politics and agriculture in Germany is at rock bottom. “Rebuilding trust” and more entrepreneurial freedom is exactly what would be needed. Instead of demonstrations, the situation requires real discussions to be held on finding solutions and ensuring less government influence.
What is going on in Switzerland in this regard? Here, too, there are rifts. However, they are not (yet) as drastic as in Germany, but there are more of them. Much like in Germany and France, the politicians in Switzerland have thrown their weight behind micromanaging the situation. With every revision made to agricultural policy, the rules are changed – and this is happening in a sector that is designed to be and is dependent on being focused on the long term. Investments frequently only pay off over the course of a decade. This has resulted in a thoroughly complex regulation situation, in which only selected specialists maintain an overview of their own individual part of the forest, but no-one keeps track of the entire jungle.
With bans and requirements on the input side (such as bans on crop protection products, contradictory requirements for the application of farmyard manure, setting aside arable land for the benefit of biodiversity), agriculture is being over-regulated. The actual effect of such requirements, however, is often not even measured comprehensively, as doing so would be significantly more complicated. The consequence of this is that hectic activism often requires even more hectic corrective actions to be taken. The fact that farmers don’t feel completely sick from the toing and froing is astonishing and is probably due to their levelheadedness – or because they are used to the unexpected when dealing with nature.
Still, regulation is only one side of the coin. The significance of agriculture is being played down, and sometimes also very subtly. When people point out that agriculture only accounts for a small share of Switzerland’s GDP, this annoys farmers, as all of those people who work in the sectors with high value creation are reliant on food. What’s more, they wouldn’t be able to perform their industrial or office jobs without a productive agriculture sector, as they would otherwise have to tend the fields themselves. An unproductive agriculture sector would also be bad for the environment and biodiversity, as too much land would have to be used for agriculture.
In his article in the NZZ, Matthias Benz states that the farmers’ protests should serve as a warning to everyone who is dependent on the government. Dependency restricts freedom and the government wants to join the conversation. Benz views the protests as an opportunity to demand cost transparency for the agriculture sector. This also seems necessary, as young farmer Jörg Büchi argues in his interview in Sonntagszeitung:
“I work for an hourly wage of CHF 8.30.” He goes on to say that “the majority of farmers feel that we would rather receive a fair price for our products than subsidies.”
However, the reality is actually very different: Swiss farmers are supposed to supply the market with high quality food products, demonstrate their entrepreneurial skills and at the same time meet increasingly stringent environmental requirements, writes David Rüetschi, CEO of the “Schweizerischen Vereinigung für einen starken Agrar- und Lebensmittelsektor (SALS)” (“Swiss Association for a Strong Agriculture and Food Sector”), in a guest commentary in NZZ am Sonntag. However, he feels that the government remains solely focused on environmental sustainability and the two equally important aspects of economic and social sustainability are attracting barely any interest. He writes that this is devastating, as there are no measures that can hold up in the long term, if they are not profitable and continues by saying that there is too much price pressure placed on food.
These statements are not the end of the matter for Rüetschi. He puts forward a set of indicators that can be used to measure all three aspects of sustainability. Using these indicators, everyone involved in the value creation chain is taken into consideration, and conflicting goals can thus be identified and analyzed. Rüetschi states, that this would enable the Swiss government to define goals for which every stakeholder can be individually responsible. The indicators should ensure that the problems are not kicked from one stage of the value creation chain to another or are shifted outside of Switzerland. This is an interesting approach with the potential to build trust. Sticking with it will pay off.
The swiss-food editorial team
