Natural capital: Labelling, transparency and the true cost of food

In our latest blog, Senior Lecturer in Agribusiness Dr Diogo Souza Monteiro talks about his participation in the Oxford Meetings on Food System Impact Valuation, and the growing need to change food consumption habits in order to preserve natural capital.

The Oxford Meetings on Food System Impact Valuation, hosted by Dr. John Ingram, leader of the food program at Oxford University Environment Change Institute, joins academia, businesses, governmental agencies and non-governmental organisations to work on Natural Capital Valuation and its implications. Now in its third year, the focus of 2019 was to capitalise on the forward momentum on the methods and initiatives already in place to evaluate natural capitals. I was fortunate to attend and lead sessions at the third meeting, held on the 15 and 16th of April.

Food System Impact Valuation Meeting

Before I highlight some of the main initiatives discussed, it is worth recapping how we have arrived at discussions surrounding natural capital and its implications. Although not new, there is an emerging debate in policy and business communities surrounding how to manage the effects of climate change on human societies. The 1983 Brundtland report “Our Common Future” defined ‘sustainable development’ and highlighted the need to reconcile human activities with the natural environment and biosphere that supports our societies. However, only now is there a sense of urgency and an increasing consensus that, if we (as a society) persist in our current paradigm, large parts of the earth may no longer be habitable for future generations.

In order to mitigate the impacts of human activity on our planet, we need to be able to identify, understand, measure and manage those activities and their consequences which contribute towards climate change. In particular, food production and consumption are heavily dependent on natural resources. Therefore, there are several groups developing and implementing frameworks to evaluate the impact of different food sectors in the natural environment – hence the importance of the Oxford Meetings.

Since the concept of natural capital has been clarified, several organisations have developed frameworks and methodologies to measure this for both countries and businesses, such as the Natural Capital Coalition protocol. Additional sustainability frameworks have been developed that reflect a growing awareness of other capitals. These more holistic accounts of capital take into account natural, human, social and economic (manufacturing and financial) capitals in human activities. These “true cost” protocols are particularly pertinent in relation to food, such as those proposed by the Sustainable Food Trust or the FReSH true cost of food program. The purpose of these is to inform public and corporate policy and investment decisions, the latter used to identify the risks of different activities and their revenue streams. Moreover, they will impact our individual behaviour as consumers, including the discouragement of the consumption of products with high impacts on nature. Most discussions at the Oxford Meeting centred on the need for harmonisation of these true cost account frameworks and, more importantly, on how these can be used to support consumer decisions and promote dietary change.

Lady Margaret Hall – the conference venue

As part of the meeting, participants were divided in groups to discuss emerging issues on several themes including standardisation, finance, public policy and research projects. I led discussions in one of the public policy sessions, focusing on how the principles and methods of true cost accounting can inform policy promoting the use of food labels to increase transparency and foster consumer behaviour change. Examples of labels designed to help consumers make more informed choices in relation to some dimension of natural impact include the Forest Stewardship Council (FSC) label in wood and paper products and the Rainforest Alliance label in foods.

However, there are several issues with these that were discussed during the session. Firstly, not all labels are equal or transparent surrounding the claim(s) they are communicating, and they do not necessarily take into account the true costs of the activities they are promoting. Another issue is that not all labels resonate with the consumer, with one participant highlighting that most consumers make choices solely based on price, meaning a label on a more expensive product that might reflect the true cost of production will not be chosen by most consumers.

Finally, the proliferation of labels communicating some dimension of sustainability — often with conflicting messages — makes choices difficult for consumers. This does, however, highlight an opportunity to develop a comprehensive label underpinned by sound food standards and true costs accounting methods for products in a given sector. If supported through policy to ensure a mandatory label, products with higher true costs of production would not be able to be carry lower prices. However, we are far from a consensus on methodologies and frameworks to determine what the true costs of a food product are, and the discussion session concluded that it is premature to propose such a label. Also, implementing mandatory labels based on true cost principles will be controversial and the charging the true cost of food may have important welfare and equity implications that need to be taken into account.

Labelling and underlying food standards are topics where there is growing expertise in CRE and SNES. For example, Dr Luca Panzone has done significant contributions to our understanding of the impact of carbon footprint labels on consumer choice. I have examined whether nutrition labels drove product reformulation and how alternative ways to convey diet information motivated consumer behaviour. CRE is therefore well positioned to continue to play a role in this important and urgent agenda.

Cultural Models of Nature

PhD student Chisaki Fukushima talks about her experience of working for the Cultural Models of Nature project, and highlights key concepts from this that she will use in her doctoral research.

Cultural Models of Nature (CMN), a project funded by the U.S. National Sciences Foundation between 2011 and 2016, endeavoured to understand the cultural models of primary food producers around the world – their collective mental systems and processes as well as models of knowledge transfer and use.  Findings from the project have now been summarised in a book of the same name, to which my mentor Dr. Hidetada Shimizu and I contributed a chapter.

Cultural Models of Nature book

A key goal of the project was to compare CMNs on a global scale, particularly in terms of climate change. All project collaborators who contributed to the book report that primary food producers are struggling with the effects of climate change.  These producers perceived it to be affecting their livelihoods in different ways. Sometimes its impacts were direct, such as changes in weather patterns, temperature and storms (including flooding), and sea level rises.  Other times they were more indirect, for example market price turmoil – a result of equipment or oil price fluctuations and political manipulation. In complex economic and political systems, primary food producers struggle to understand not only what happens in these systems, but how to cope with the issues present.

Nature (with a lowercase ‘n’) – defined in this project as natural objects, environments and others — is the longest and strongest relationship for humans. Scientists and philosophers learn about nature from a careful examination of people’s livelihoods and subsistence patterns as there is always a relationship between cultural ideas of Nature (with an uppercase ‘N’) and any group dependent on nature for their livelihood ( i.e. all humans). The natural environment we see has already been permanently changed by humans. Human-aggravated disasters are affecting not only current, but also future generations. Therefore, we must focus on learning what humans know and understand to help them adapt to this new, harsher reality. The CMN scholars in this volume seek to understand decision making through clear and consistent mental models shared across a group, while also reflecting on cognitive models of the world. Specifically, ethnographers involved in this collection reject the notion that primary food producers are a ‘problem’ of irrational thinking and instead see their decision making as logical.

This addresses profound epistemological questions about what we can know about others. CMN tells us to open our eyes and look at the available evidence from people’s existence and livelihoods through discourse analysis, observation, and experimental data production and analysis. The different sites generated data from mixed and inter-subjective cultural analysis, borrowing from psychology and anthropology in order to produce data about primary food producers’ knowledge. This approach assumes there is an isomorphism, or similar process to do with what people say and what they know. This knowledge system recognizes cognition as central to individual decision making and attempts to formally describe what people know and the relationship between elements of their knowledge, or ‘folk knowledge’.

In the chapter I co-authored with Hidetada Shimizu, we introduced two key concepts that are integral to local cultural models of nature[1]. A study of Japanese farmers found particularly high salience (or importance) of Human Relationships in those two narratives regarding risk supported by more than two analyses.

Japanese farmers experienced the Green Revolution in the 1950s and 1960s along with the post-war social infrastructure such as land consolidation and technological development. They are well educated and knowledgeable, use modern technology, and enjoy an independent middle-level income that relies on robust management skills.  However, their collective peasant value of ‘Hyaku-sho’ community structure is still critical to their production and is very similar to what it was twenty years ago. It is therefore not only the nature of each agent that is important but also the relationships between agents. Social networks are particularly critical for managing risks from labour shortages, market price fluctuations, succession of the family business and coping with climate change. For the primary food producers included in the study, their success strategy emphasised overcoming risk, threats, and eliminating elements that might negatively affect their products. The entity which we can understand as ‘social relation’ almost appears to be one social organism – a kind of human eusociality.

The other narrative articulates the idea that crops are not just ‘products’, but are provided by the mercy of a holy nature and are a personified risk. This came through in a detailed study of the use of metaphor and semantic causal analysis. For example, farmers claim that they cannot control what nature does to them since nature is like humans, who make mistakes, and humans themselves are part of nature. Nature is personified both as something that can provide things, as well as a systemic relationship of components that includes people. It is possible that this is a result of the fusion of secular Buddhism and indigenous animism, but at present, we lack the evidence to make such a claim. It is, nevertheless, something I would like to explore in the future.

These two narratives are echoed across other sites in the project, and it is fascinating to see the differences and similarities between them. These may be the result of different environments, cultural histories, religions, economic policies, citizenship or, more likely, a complex interaction of all of these and other factors. The two narratives that we focus on in our chapter see risk as one of the attributes of nature, but humans as the ones who experience the consequences of that risk. Since humans face the consequences, they are responsible for managing risk. Successful risk management allows people to find Ikigai (the purpose/value of life) through a belief in surviving difficulties like economic crisis, climate change and natural disasters.

The work I did for Cultural Models of Nature with my mentor, Dr Hidetada Shimizu, was rewarding and profoundly inspiring. I am now continuing this work in my doctoral research, titled ‘Cultural Models of Risk’. I will extend the work I did with Dr. Shimizu to understand belief systems and cultural perceptions of the risk of radiation in food and in a nuclear host community.

[1] The original data belongs to Dr Hidetada Shimizu (Northern Illinois University).


Brexit: How might UK Agriculture Thrive or Survive?

A report released earlier this week by CRE’s Carmen Hubbard provides a detailed analysis of how the UK agriculture may be affected by Brexit. Working with colleagues from the Scottish Rural College, Agri-food & Biosciences Institute and a range of stakeholders, the report looks at all aspects of agriculture across all parts of the UK.

The UK agri-food sector will be one of the most seriously affected by Brexit. Not only is it dependent on trade relations both with the European Union and with the Rest of the World, but it is also a sector dependent on migrant labour, and the most heavily subsidised and regulated under the present Common Agricultural Policy (CAP).

The research shows that under selected trade scenarios the impact of Brexit on UK agriculture will be far from uniform. The trade scenario effects depend on the net trade position, and/or world prices. Under a Free Trade Agreement (FTA) with the EU, agricultural impacts are relatively modest. By contrast, unilateral removal of import tariffs (UTL) has significant negative impacts on prices, production and incomes. Adoption of the current EU’s WTO tariff schedule for all imports (including those from the EU) favours net importer sectors (e.g., dairy) and harms net exporter sectors (e.g., sheep).

These trade effects, however, might be overshadowed by the foreign exchange rate and possible labour market changes and other non-tariff barriers.

Given the dependence of many UK farms on CAP direct payments, their removal, predictably, worsens the negative impacts of new trade arrangements and offsets positive impacts. Indeed, the elimination of direct payments will affect most farm businesses, but the magnitude varies significantly by enterprise and devolved administration.

The research shows differences in effects at farm and sector level, implying that although the agricultural industry can survive and adapt there is likely to be considerable hardship for individuals, families and businesses.

Changes in the agricultural industry could have more far reaching effects in other sectors, such as food processing.

Changes in land use may relieve environmental pressures, for example in areas experiencing over grazing, but could increase risks of pollution in others. Consideration will be needed for policies to manage any transition.

The Westminster and devolved governments may need to consider the implications of such changes for people, the food supply, land use and the countryside, and their responses and policy approaches to managing this may vary.

However, uncertainty during negotiations regarding the Withdrawal Agreement has been (and continues to be at the time of writing) a major problem, making it extremely difficult for farmers and the agri-food industry to plan for the future.

Read the report in full here.


This blog originally appeared on the Northern Rural Network Site, written by Paul Cowie.