The End of Obesity is Just Around the Corner

If you imagine in your mind, the irrigated agriculture of California you probably can see a large valve sticking out of the ground with a wheel on top situated in the middle of a massive field with deep furrows.  As the valve is turned, water gushes out into the furrows, flooding them to provide water for the crops.  Alternatively, you might see large water guns irrigating the fields with booming sprays similar to a lawn sprinkler on steriods.  The way of the future will require a much more efficient approach if water use to produce crops in California is to be sustained.  Intensive approaches to irrigation have been developed for use in very dry climates where evaporation is heavy and represents a large waste of what little available water is there.  In these methods, drip irrigation delivers water right to the root zone in buried or partially buried plastic pipes with small holes to meter out the water.  This almost eliminates evaporation waste and the delivery of water to soil areas just outside the root zone where it is unavailable to the plants and therefore wasted.  While these methods have made some arid parts of the world spring to life and support large harvests, they have been viewed as techniques largely only practical for areas where water was very scarce.  We are coming into a era where water, energy and other key natural resources are either becoming scarce or will become scarce by government policy actions aimed at preserving them for the future.

These practices which aim at delivering precisely metered levels of scarce inputs directly to the point of uptake are referred to as intensive methods of agriculture.  Even though industrial and intensive as adjectives for agricultural methods have sometimes been used interchangeably in the past, there is a major distinction which is now coming to the fore.  Industrial methods are employed in scaled up systems which deliver substantial efficiencies compared to older and often smaller scale techniques but they have been largely erected within an environment where key resources necessary to support them are abundant and therefore comparatively inexpensive. 

If you look at how the modern swine industry, for instance, has developed globally, it has tended to shift geographically to locations where the key inputs required for production are either abundantly available and therefore inexpensive, or where infrastructruture allows the transportation of more locally scarce inputs to the production site without a disqualifying markup in cost.  This capturing of regional cost differentials is beginning to fade as a viable strategy since first world governments are beginning to view the economic landscape as the world vs. the region or nation.  Therefore, energy and water for instance, though abundant locally in certain regions, are now being considered world resources which must be managed in the future for the best outcome for all.  This means taxing use to reflect the true global cost of using available water rather than the local cost of providing it. 

This point of view, if widely adopted and promulgated via joint global policy actions will begin to strip away the comparative advantage force which under market systems allocates scarce resources efficiently by market determined prices.  Imagine a set of taxes and regulations which in a sense "level the playing field" of costs so that comparative advantage among countries and regions disappears or becomes equalized or better yet, managed so that governments grant comparative advantage by policy decisions.  This of course is a recipe for dramatically shrinking the capacity of the world to produce food and other products but it is what is increasingly contemplated by policy makers and is gaining ground on a global basis.

The equalizing of resource prices at the margin or managing their differntial cost is accomplished by taxing users differential rates reflecting what someone calculates to be the "true global cost" of their use.  So here are some beginning examples related to the swine industry.  Measure, regulate and then tax the creation of dust, gas emissions, particulates in the air, odors, antibiotic use, manure generation and recycling, labor that works within confinement facilities, electricity use, fuel use, land use, water use, crop use, technology use (if viewed as wasteful or creating animal welfare issues etc.) to make sure the true cost of using these globally owned or managed resources is known via the budgeting process before their use is committed to production processes.  Similarly, grant subsidies for the use of certain favored products and technologies so their use will crowd out the "old and the wasteful" resource use and give favorable economics to certain technologies wherein they have a comparative advantage.  Once this is accomplished, you unleash market forces to reallocate resources under the new set of rules and price in or stimulate the development of technologies which operate profitably under the new cost structure.

     While I am not completely sure how the future looks under this developing scenario, I can tell you one thing for sure, it will be the end of obesity on a global basis and will go a long way to contain the population growth problem which is vexing the world.