The idea that food is globally incredibly cheap right now doesn’t compute in the mainstream narrative.
Charles Hugh Smith
July 14, 2016
In the consensus view, agriculture is only profitable on a mega-farm corporate scale, and tool-making has been offshored because it’s unprofitable to manufacture stuff in the U.S. But what if both of these “obvious” consensus opinions are flat-out wrong? What if small-scale farming and toolmaking are both potentially profitable?
Perhaps we should be asking: what if the highest future profits will belong to small-scale agriculture and manufacturing, not Wall Street or Silicon Valley? This idea is so far out of the mainstream that it is widely considered “impossible:” nothing could be more profitable than politically sacrosanct “too big to fail” Wall Street banks or quasi-monopoly tech giants.
All of these presumed “truths” may be melting into air if small-scale machine tools and software technologies enable highly efficient and productive small-scale agriculture:
Drew Sample and I discuss these nascent but potentially revolutionary trends in a new podcast, Small Scale Farming, Small Scale Manufacturing (1:08 hrs).
Critics will quickly point out that large-scale production of grains such as corn and wheat and crops such as soy beans cannot be profitably grown in small plots. While that’s currently a financial reality, that does not imply it’s a permanent truth: large-scale agriculture consumes vast quantities of fossil fuels (currently cheap, but maybe not cheap forever) and huge quantities of minerals such as potash that are non-renewable.
Should essential non-renewables skyrocket in price, large-scale agriculture becomes a lot more costly to operate.
There’s also the question of sustainability. Typical large-scale practices such as tilling cause soil loss that cannot be “fixed” with conventional methods. Then there’s the decline of water tables as aquifers are drained by conventional agricultural practices.
In typical Wall Street fashion, the perspective on what’s sustainable currently extends about one quarter (three months). Few observers ask what will be sustainable in 20 years.
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