SUPPOSE THEY HAD a depression and nobody came?
Instead of accepting today’s economic downturn as a pink slip that can’t be refused, what if our governments reacted as if they had received a Facebook invitation: by selecting “join cause,” “learn more” or “ignore”?
When faced with the possibility of a recession, panicked politicians from around the world didn’t consider a range of options; they didn’t click on “learn more.” Instead, they hit “join cause.” With a similar lack of vision, governments the world over are trying to spend their way out of the crisis by dumping loads of money into infrastructure projects, claiming a need for “shovel-ready” projects to “kick start” the recovery.
The terms “shovel-ready” and “kick start” tell us that politicians turned to pre-ecological and pre-knowledge-based-economy styles of thinking. The possibility of a citizen-led economic recovery that featured agriculture, food and their allied sectors received no serious attention. But it should have, since such an approach could go a long way toward alleviating the ill effects of a downturn today while nurturing more sustainable economic foundations for tomorrow.
It’s been a long time since anyone has given serious thought to building a modern and affluent economy on the basis of agriculture, food and their allied occupations, yet the economic lifecycle of food offers opportunities for just such transformative change due to the number and positioning of green-collar jobs.
For one thing, food is essential to life, which is why people postpone purchasing almost any other consumer good before they abandon food. As a result, agriculture has strong immunity against depressions. It also explains why government money aimed at stimulating food purchases is more likely to be spent than cash incentives intended to encourage home renovations, for example.
Imagine that a government gave a cash or tax incentive worth $10 for every $100-purchase of local, sustainable and nutritious groceries. Hugh Joseph and his colleagues from the Friedmann School of Nutrition Science and Policy at Tufts University in Boston showed that knowledgeable and frugal shoppers could buy such food (as benchmarked against an exhaustive list prepared by nutritionists with the US Department of Agriculture) for about 10 per cent more than the long-distance foods in a typical shopping basket.
Assuming that the cost difference is similar in Canada, what would happen if a Canadian stimulus program picked up the $10 surcharge for every $100 spent on certified local, sustainable and nutritious food? If three million Canuck households took the government up on this offer every week – it’s commonly estimated that a third of shoppers are already keen to try such food if the price is right – the government would have to dole out $1.5-billion per year ($10 per week x 50 weeks x 3 million shoppers). In return, these three million new customers would spend some $15-billion worth of job-creating food purchases (3 million x $100 x 52 weeks).
How many new jobs could that $15-billion in new spending create? The agriculture and food sector is well known for being labour-intensive rather than capital-intensive. That’s why newcomers and entrepreneurs commonly start in this area. Indeed, what’s smart and empowering about investing in food and agriculture is that capital investments in new property and equipment can be bypassed thanks to excess capacity – from processing plants that are keen to “co-pack” at night, to commercial kitchens that are often empty. As a result, there is plenty of room to expand employment without using up the lion’s share of stimulus money on capital expenditures.
About $50,000 would cover the wages of a worker in most agriculture and food operations. In the case of farm labourers, for example, if they worked on an already-existing farm with an already-existing barn and an already-existing tractor, almost the entire $50,000 could go to wages. At that rate, the $15-billion in new expenditures could create about 300,000 new jobs ($15-billion/$50,000 per job) and the wage would entice workers back into the industry.
There are two direct ways that “virtuous-circle” economics could finance this stimulus, aside from indirect means such as savings in health care or environmental cleanups. One way is to pay for the stimulus program for newly employed workers with their newly paid income taxes of about $5000 per employee, or $1.5-billion altogether. Another method is to finance the stimulus through the avoided costs of not having the stimulus. If the government didn’t adopt this stimulus plan, then some 300,000 people could be claiming as much as $6-billion a year in employment insurance. So the cost of not having the stimulus is up to four times the cost of having it.
Amory Lovins, the American energy-efficiency guru, often jokes that conventional economics established that there is no such thing as a free lunch, but the return on investment for energy efficiency is so fast and high that “this is a lunch you get paid to eat.” The same logic applies here. In a period of high and chronic unemployment, when stimulus money creates considerable productivity and where employment insurance creates none, the return on investment is so good that it’s like funding job creation with found money.
To extend this citizen-led and shopper-based job creation program, government institutions of all kinds could alter their food purchasing contracts to specify local and sustainable offerings. That’s already being done by the University of Toronto and the Town of Markham, Ontario, where a not-for-profit group, Local Food Plus, works with suppliers, processors and food-service companies to iron out any kinks they may have in moving to a new food-supply system. These institutions start by ordering 10 per cent of their food from sustainable producers the first year, 15 per cent the second year, and so on. Experience at the University of Toronto, a world leader that is now heading for 25 per cent, confirms the counter-intuitive reality that the institution pays no more for local food despite its 10-per-cent premium. It turns out that staff and customers give it more respect, which reduces wastage sufficiently to cover additional purchasing costs.
If the government spent $2-billion per year on similar purchasing programs among even 10 per cent of the approximately 100,000 public service eateries across Canada, then demand from hospitals, jails, schools, child care centres and government cafeterias would enable Canadian producers to scale up to meet demand from bulk purchasers.
A portion of the $2-billion would need to be invested in building what Rosabeth Moss Kanter, author of World Class: Thriving Locally in the Global Economy, calls “infrastructure of collaboration.” At least $2-million per year should be spent, for example, on the salaries of 3000 “local food animators,” whose job is to build the social infrastructure that allows people to come together and work through their food purchasing issues. The majority of the $2-billion, however, would cover the food premiums and training costs required by some 10,000 selected public institutions that would begin the switch to local and sustainable food. Over one year, these stimulus funds would create about 1500 long-term jobs for animators and 18,000 long-term jobs for food producers and service workers.
Green jobs are also found “up on the roof.” One-sixth of the land mass of most cities, according to Steve Peck of Toronto-based Green Roofs for Healthy Cities, is occupied with buildings that have flat roofs: high rises, schools and big-box stores, for example. These roofs, along with exterior garages attached to many homes, could be altered in various ways – from container planters to formally engineered roofs – so that they used soil and plants to capture rainwater, thereby keeping it out of storm sewers and water-treatment plants. By doing so, governments save money. But the benefits from rooftop plants don’t stop there. They also store carbon, pump out oxygen and evaporate water, which naturally cools a city. Many roofs are designed to grow food, as is done atop Toronto’s posh Royal York Hotel.
A special stimulus fund of $1-billion per year for construction or retrofitting about 2000 roofs of various types (garages, schools, new high rises and box stores, for example) could create 10,000 new labouring, engineering and landscaping jobs. The public money could be shared among applicants who identified 10-year paybacks through public savings, as well as through other creative ideas such as raised-bed gardens atop seniors’ buildings.
In his 2008 doctoral dissertation for the University of Missouri-Columbia, Leonid Sharashkin reported that some 35 million Russians who work small garden plots at their near-urban dachas (cottages) produce half of that country’s food. Given Canada’s soil and climate, this country could be expected to produce even more from its backyards, vacant lands, under-utilized parking spaces in strip malls, and even some park areas – not to mention green roofs.
Another opportunity involves finding employees who would work a four-day week as their contribution to stimulating an economic recovery. Employment Canada offers a program whereby workers who opt for a four-day workweek can access employment insurance for their fifth day, as long as by doing so, one job is saved for every five workers who opt for a shortened workweek. In this way, the program is cost-neutral for the government since paying one worker employment insurance for five days is equivalent to paying five workers for one day.
Workers who volunteer for a four-day week lose about half a day’s wages each week, once taxes, employment insurance and savings from staying at home are calculated. If these volunteers spent some portion of their free day doing dacha-style gardening and home cooking, they could cover almost all of their income loss with the products of their labour. They would also benefit from healthy outdoor exercise; fresh, homemade food; learning new skills; and the bragging rights for reducing global warming that accompany a “100-metre” diet. If 400,000 workers volunteered to contribute to the economic recovery in this way, they would save 100,000 jobs. We can end this depression, one holiday at a time.
Food and agriculture are rich in other indirect jobs since they require inputs at both ends – “backward linkages” (goods and services that make modern farming or fishing possible), as well as “forward linkages” (goods and services needed to get food to customers). Food purchases also yield a multiplier effect when, for instance, a farmer spends new income on a haircut, the barber buys a book on wealthy barbers, the bookstore owner goes to hear a local rock band and so on.
Accounting for indirect job creation is an uncertain science, but it’s reasonable to suggest that the total jobs created by the food and agriculture sector could top one million. The problem is that governments fail to give food and agriculture due consideration, partially because this sector is considered to be old hat and mired in survival problems rather than solutions.
Admittedly, this article focuses on the opportunities associated with agriculture and food, and doesn’t point out all of the complicating factors. For instance, few of these job-creation schemes will be realized unless the sector sheds its fraught-with-problems image. If it is to provide the opportunities it so clearly has to offer, then people, including (or even especially) those on the political left and the “greens,” need to recognize the power they wield. People power may well be the biggest renewable energy story in the 21st century. A citizen-driven economic recovery, however, can’t happen without governments, given their access to pools of money and resources. As a result, governments and politicians need to be convinced that the benefits of public-private partnerships and power-sharing outweigh the risks. Only in this way will governments click “ignore” when offered the option of a recession.
Wayne Roberts manages the Toronto Food Policy Council and brings his creative approach to board meetings of Alternatives.
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