Editorial Introduction to Volume II
Jules Pretty
The Real Costs
When we buy or bake our daily bread, do we ever wonder about how much it
really costs? We like it when our food is cheap, and complain when prices rise.
Indeed, riots over food prices date back at least to Roman times. Governments
have long since intervened to keep food cheap in the shops, and tell consumers
that policies designed to do exactly this are succeeding. In most industrialized
countries, the proportion of the average household budget spent on food has been
declining in recent decades. Food is getting cheaper relative to other goods, and
many believe that this must benefit everyone as all need to eat food. Food is not
cheap. It only appears cheap in the shop because consumers are not encouraged to
think of the hidden costs of damage caused to the environment and human health
by certain systems of agricultural production.
Thus consumers actually pay three times for their food. Once at the till in the
shop, a second time through taxes that are used to subsidize farmers or support
agricultural development, and a third time to clean up the environmental and
health side effects. Food looks cheap because these costs are only accounted for
elsewhere in the economy. The real costs are thus not internalized in prices. On the
cheapness of food, Donald Worster recognized this in his The Wealth of Nature
(1994): ‘the farm experts merely assume, on the basis of marketplace behaviour,
that the public wants cheapness above all else. Cheapness, of course, is supposed to
require abundance, and abundance is supposed to come from greater economies of
scale, more concentrated economic organisation, and more industrialised meth-
ods. The entire basis for that assumption collapses if the marketplace is a poor or
imperfect reflector of what people want.’
This is not to say that prices in the shop should necessarily rise, as this would
penalize the poor over the wealthy. Using taxes to raise money to support agricul-
tural development is also potentially progressive, as the rich pay proportionally
more in taxes, and the poor, who spend proportionally more of their budget on
food, benefit if prices stay low. But this idea of fairness falters when set against the
massive distortions brought about by modern agricultural systems that additionally