The Problem With Big Food and the DARPA Scientist Who’s Solving It
- Big Agriculture — the handful of massive factory-farm corporations that produce most of the nation’s grains and meat — dominates the American food system.
- Author and journalist Rana Foroohar investigates the logistics, economics and geopolitics of the food industry in her book “Homecoming: The Path to Prosperity in a Post-Global World.”
- Rana joins Kevin Coldiron to talk about the problem with “Big Ag” and a more sustainable, equitable, decentralized future of food.
Rana Foroohar has had a beef with Big Agriculture for decades.
The author and journalist grew up in a small town in Indiana, “in the middle of literally miles and miles of corn, 99% of which was destined for either cattle feed or processed food with crop sprayers overhead, creating [my] problems with asthma as a child,” she says.
But it wasn’t until COVID-19 that she began to investigate the industrial food complex as part of her book “Homecoming: The Path to Prosperity in a Post-Global World.”
“Remember back to the beginning of the pandemic, we were all suddenly locked down, and yet there was this bizarre supply and demand mismatch where restaurants were shut but grocery store shelves were empty — and farmers [were] throwing away meat and milk?” she asks.
“It just was such a strange dynamic. Efficient market theory would say that supply should have simply gone to other areas of demand, and it didn’t do that. Now, why didn’t it do that?”
Rana, a global business columnist, Financial Times associate editor and CNN’s global economic analyst, says that the agricultural system is an extreme example of the kind of corporate concentration we see in many American industries. But over the last 20 years, the phenomenon has worsened. Today, about four companies control the market share of grain. It’s the same for meat: Four big companies produce the overwhelming majority of beef, chicken and pork in the U.S.
A quadropoly isn’t a good thing for consumers — or for investors.
“When you’re a big food company, you follow Finance 101. You want to move cost off the balance sheet, to create very siloed, concentrated production lines,” Rana explains. “So that led to a system in which there was one supply chain for restaurants, another supply chain for grocery stores, and ‘never the twain shall meet.’”
That’s not what efficient markets are supposed to do. They’re supposed to adjust in real time, to be “much more nimble and flexible,” she adds. “But what I found … is that the Chicago-School, efficiency-theory way of managing business tends to lead to extreme concentration and extreme ‘efficiency’ [quotation marks hers], meaning it’s cheaper and faster. But that’s only the case if nothing is going wrong.”
Any kind of geopolitical incident — such as a natural disaster, a trade war or (you guessed it) a pandemic — can impact the supply chain and create domino effects across industries, regions and nations. Major geopolitical crises happen more frequently these days — at least every three years, says Rana.
That’s just one of the reasons she dedicated a chapter of “Homecoming” to “The Problem With Big Food.” (The book covers a wide array of geopolitical topics, from manufacturing and construction to government and digital innovation.)
Read on for highlights of Rana’s conversation with Kevin Coldiron about the state of the American agriculture system and the future of food on the latest Ideas Lab installment of Top Traders Unplugged.
Not-so-fresh farm country
The more Rana dug into the food industry, the more she realized the existing model is fraught with “negative externalities that come with their own costs.”
Obesity is a perfect example of one of the unintended consequences of a system that prioritizes profits over people.
The American food system is designed to maximize calories. That wasn’t always a bad thing: In the early 20th century, when rural populations moved into cities en masse, and during the Great Depression, “there was a need for farmers to produce a lot more cheap calories,” Rana says. “Well, we got there.”
Now, the U.S. food system produces about three times as many calories as the average person needs, but not nearly enough healthy foods like fruits, vegetables and sustainably raised meats.
“We don’t have enough of those because we have incentives that are pulling the system in the wrong direction,” says Rana. “I could go on, but that’s really the reason why I started to look at food.”
Kevin shares an anecdote of his own: “For a long time, I ran an investment business and we had quite a big client in Jefferson City,” he says. “I would fly into St. Louis, and we would drive to Jefferson City, the capital of Missouri. It was a three-hour drive through miles and miles of farms. We would stop occasionally to get lunch — and we couldn’t get any fresh vegetables. I was like, This is crazy. We’re in the middle of a farm country and there’s no fresh lettuce or fresh tomatoes.”
It is crazy, but it’s not uncommon in the United States. According to the USDA, households in rural areas accounted for 17.7% of all food-insecure households in 2016.
Reinventing food as we know it
In “Homecoming: The Path to Prosperity in a Post-Global World,” Rana writes about agricultural scientist Molly Jahn, who quite literally is “reinventing the process by which food gets made.”
Jahn began her career in academia — and she still teaches agronomy at the University of Wisconsin-Madison. She ran the agricultural school there from 2006 to 2011 and served as the Undersecretary of Research, Education and Economics in the U.S. Department of Agriculture in 2009 and 2010.
Now she works for the Defense Advanced Research Projects Agency (DARPA) as well.
Most of our listeners know that DARPA is the research and development arm of the U.S. Department of Defense, but just to be clear: The agency is at least partially responsible for many of the most important innovations of the 20th and 21st centuries: GPS, drones, stealth technology, the Moderna COVID-19 vaccine, the personal computer and … oh, the internet.
“Molly is a wonderful example of how you can really fix things and make them better. You don’t get your own program at DARPA unless you’re pretty amazing, which she is,” Rana says.
Abundance as a ‘risk-management’ strategy
Jahn came from a family of Canadian plant breeders and grew up creating new varietals.
“If you go into the grocery store, you’re liable to see some of her squashes and [other] vegetables she’s created,” says Rana. (They include Delicata and Honeynut squash, as well as Salt and Pepper cucumbers.)
As her career unfolded, Jahn began to understand “the nexus of food, fuel, water, the environment, health issues as one big problem, not separate problems” — and she got involved in public policy around these issues, Rana explains.
In a profile on Jahn in the Financial Times, Rana writes:
Jahn is what’s known in some academic and defense circles as a “systems thinker.” The more complex and multifaceted the problem, the more she’s interested. … As she learned more about plant genetics, for example, she became focused on the damage that humans were doing to the environment and convinced that the problems within the food system were about more than food.
“It was all about energy,” she says. “Climate change was about humans using fossil fuels to support practices like conventional agriculture that were releasing too much energy into the system. Obesity was about too much caloric energy in the biological system.
“I was becoming more and more convinced that humans were driving the planet way, way, outside historical bounds,” she continues. “And agriculture turned out to be one of the primary ways that humans acted thermodynamically on the planet.” The problem, says Jahn, was that we had viewed abundance as a risk-management strategy. While that may have been true early in human history, it now came with its own costs.
Save the earth … literally, we need it to grow food
The “Big Food” model — incentivizing the overproduction of three or four cash crops like corn, soybeans and wheat — is “very hard on the land, because in order to keep making a piece of land produce the same yield over and over again with the same crop, you have to keep using more fertilizers, more chemicals,” Rana explains.
Those chemicals wreak havoc on the environment, particularly the water supply. Plus, “much of our agriculture [in the U.S.] is going to support cattle, which is a huge problem [related to] global warming,” she adds. “And the fuel costs of all this are tremendous.”
Molly Jahn recognized that the overproduction of certain crops came at the expense of others, which has implications for both national security and financial markets. A large percentage of production of the calories we actually need — in the form of healthy fruits and vegetables — are grown in California, in a highly concentrated way. What if a terrorist attack, for example, took out a few of the state’s major farms and/or its agricultural workforce? We’d experience food shortages and the finance sector would get a shock from insurance companies underwriting the disruptions.
“It would be really devastating very quickly to the country,” Rana says.
Jahn began thinking about decentralization and diversification — essentially the opposite of what we have now, which prioritizes “for big and cheap” — as a remedy.
Hyperlocal food: The next frontier
Jahn’s four-year DARPA project, called Cornucopia, aims to do nothing less than create a new global food system. It sounds like science fiction, but according to Rana, Jahn is working on developing food from microbes instead of plants or animals. The result could look like something straight out of “Star Trek”: “Literally push a button and constitute your own food supply,” Rana explains.
The “microbial soup” under development is meant to be used as a food source for the military that requires only air, water and electricity.
“Let’s say I’m a Navy SEAL going into some hostile territory,” Rana explains. “I may have to be in a difficult environment for three months and I have only my battery pack and the air I’m breathing. How can I feed myself?”
Eventually, “the goal is to turn these things into stuff you and I would actually want to eat, not just survive on,” she adds. “So, shakes and power bars and different kinds of foods. But it’s really quite profound because it’s all about decentralization — how [to] go hyperlocal with something that is strategically important, a real necessity.”
Set phasers on soup
Kevin can’t help but ask whether that vision is realistic. He can see the military applications, but … are the rest of us really going to drink microbe shakes?
Rana does think microbe meals are realistic “as an emergency solution for a set period of time” in the case of extreme geopolitical events.
“We are already in a world in which power supplies can be taken down by hackers or the water supply could be tainted,” she says. Cybercriminals could also commit industrial espionage, “particularly as the Internet of Things has become such a bigger part of our lives … everything is connected, not just us as consumers with our smartphones but [also] industry and the power grids that we depend on.”
In the case of a cyberattack, war or a natural disaster, the ability to make food from thin air would be invaluable.
“One could imagine something like this having been of great use during Hurricane Katrina,” Rana says. “So that to me is very realistic. Now, am I going to … push a button in the ‘Star Trek’ canteen? I don’t know. Probably not soon.”
However, she notes that DARPA has an impressive track record of turning things that seem like science fiction into reality. Case in point: the voice-user interface. If most of us heard about Siri or Alexa thirty years ago, we’d have thought they belonged in the USS Enterprise.
Computer: Microbe soup, hot.
This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up to our Newsletter or Subscribe on your preferred podcast platform so that you don’t miss out on future episodes.
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