[p2p-research] The one thing depleting faster than oil is the credibility of those measurin...

[J. Andrew Rogers]

On Wed, Nov 18, 2009 at 8:10 AM, Paul D. Fernhout
<pdfernhout at kurtz-fernhout.com> wrote:
> This may well be true, and certainly anything repetitive can get boring and
> cause repetitive strain injury (so I'm still for automating) but it hinges
> on what you consider wages that are "generally quite good".


In regions that do not have significant illegal labor pools, my
experience has been that agricultural wages are about average for the
cities and towns they are near. Agricultural wages are significantly
higher than low-skill service jobs, but most people seem to
nonetheless prefer the latter. On the other hand, this work attracts
ex-convicts that have a hard time getting good jobs elsewhere and the
chronic labor shortage makes them employable.


> In the USA, the median salary is around US$50K. That's presumably with some
> benefits. So, that's about US$30 an hour (assuming benefits were worth US$5
> an hour).


Cost of living is much lower in agricultural areas, and the median
salary is more like US$30k. This is equivalent to $50k in
non-agricultural regions when adjusted for purchasing power parity.


> Can you show me any agricultural jobs where, say, people doing labor in
> fields are getting US$30 an hour and up? US$10 an hour, maybe. Or more
> likely, closer to minimum wages.


Agriculture is like commercial fishing, you make very high wages over
a relatively small number of months which are then averaged over the
rest of the year when you are not working.  If you bust your ass and
work long hours during peak season, you can make some pretty good
money. One of the great things about being a teenager in a farming
community is that you can make a lot of money over the summer if you
are willing to work -- far, far more than you could ever make as a
burger-flipper.


> So, I think a lot of this is a wage problem. It is a lot of work for other
> people, but for little pay.


No, the wages are fine. The problem is that it is hard, dirty work
with irregular hours.  It is not and cannot be a 9-to-5,
Monday-through-Friday type job. Most people will accept significantly
lower wages for an easier, more regular job.


> And considering how important food is to our
> society, if we were to pay agricultural laborers similar to union
> autoworkers in Detroit were, they should be getting around US$50 an hour to
> do things like pick oranges or plant seedlings.


Most autoworkers are grossly overpaid.  Agricultural labor is not a
high-skill job, it is just a lot of dirty work with an irregular
schedule.


> This is off the top of my head, so feel free to get better figures, but I'm
> guessing a person can pick and sort at least 500 oranges an hour without too
> much stress, while talking to other coworkers and having an OK time.


You have obviously never worked in agriculture. :-)


> So, these labor rates might not increase food prices that much, unless you
> talk about all the other aspects of our food distribution system that don't
> make much sense. For example, farmers might get ten cents on that dollar I
> pay in the grocery store, in which case the cost of picking would be all of
> it, and given other costs, clearly that would not work out.


Farmers get better than ten cents on the dollar, but you are pretty
seriously misestimating the cost and risk structure of agriculture.

Most of the cost of agriculture is *post-production*. This includes
distribution and processing, both of which are energy intensive (hence
why you see vegetable processing plants in the middle of the Nevada
desert -- geothermal is "free" energy which reduces processing costs
even accounting for extra transport).

Part of the reason this is the case is that many agricultural
production inputs such as diesel fuel are not taxed whereas their
equivalents in the rest of the economy are taxed at relatively high
rates.


> So, this is a political issue to make it work. If *all* farmers were
> required to pay US$50 an hour for farm day-labor, then none would be at a
> comparative disadvantage. Or, if all farmers and others were taxed, and the
> money given to improve society so that even poorly paid farm workers had a
> good life, with access to libraries and free-to-the-consumer prepared
> organic food and so on, or alternatively the taxes given as a basic income
> to everyone to spend as they saw fit, then that would be another approach.


As an FYI, you are basing your analysis on a purely fictional concept
of American agriculture. Just about every last one of your assumptions
is wrong, and hence any conclusions from those assumptions.


> Although, no doubt, we might see a rush to automate. Then the issue is, who
> should get the benefits of the automation? The farmers? The engineers? The
> displaced workers?


What displaced workers?  Capital investment in automation helps solve
the problem of a labor *shortage*.


> Or, maybe, everyone should share in it somehow?


That depends. Is everyone going to bear the risk and cost of
automation in the first place?


> Anyway, why not pay people thirty Euros? What are the implications?
> How much would food prices really rise?


Prices would not rise that much, since production is only a modest
portion of the total cost. But again, you are assuming that raising
wages will magically increase the labor pool. It is like fishing in
the boonies of Alaska; you can make a $100k/month, but the work sucks,
is dangerous, and requires you to live in the middle of nowhere such
that they have a hard time finding people willing to do it.

The elephant in the room is the urbanization of a population that
wants nothing whatsoever to do with agriculture or food production.
There is aggressive shrinkage of the labor pool in agricultural
regions. No one wants to live there, the population that is there is
rapidly aging, and no amount of money can attract people to live out
there.


> Again, if we change the nature of farming, so farms are smaller, this is not
> so much of an issue. Also, most farms have sunny open places, so we can
> expect solar panels to make a lot of sense there to supply electricity as
> the costs of such panels continue to drop. Makes me think there must already
> be a business opportunity here? :-) Considering how road crews set up lights
> that have solar panels on them to minimize the need to refuel generators?


Already been done where it makes sense.  Frequently, it doesn't make
sense. American farmers lead the world in agricultural technological
innovation -- they have to in order to compete on price -- but they
are also very sensitive to the economics of their equipment. As solar
gets cheaper you will see more solar, but there is a large installed
base of diesel power that is both very reliable and inexpensive.


> There are lots of types of "farms". Maybe you might want to study this a
> bit.


As you may have surmised, I am more than a little familiar with
agriculture at numerous scales and in several climates.


> Your argument about scale only is true within certain assumptions --
> including assumptions about market access, labor availability, choice of
> equipment, cost of land, and so on. Those assumptions may all change if
> other aspects of our society change.


Nope, the economics are almost purely energy-based.  You can tweak the
other parameters madly to optimize for certain assumptions and
conditions, but at the end of the day the calculus all comes back to
energy.


>> Note also that the scale of the farm required is dependent on the
>> local ecology and climate.  In some very rich areas you have a
>> reasonable farm on a mere tens of acres, but in other areas the
>> revenue per acre is so low that you need thousands of acres just to
>> cover basic overhead.
>
> Then maybe we should not be farming such places? :-) Especially if most
> agricultural land is not needed given how it is used mostly to grow grain to
> feed to grass-adapted ruminants and make everyone unhappy and sick? :-(


American agriculture has adapted to virtually every ecological zone of
the country and found ways to make all of those regions economically
productive. The reason low-yield regions are productive is that there
are methods of farming those regions such that the energy and capital
requirements per acre scale according to the yield.


> You sound extremely confident about that. What if the robots are cheap? What
> if they are solar powered? What if the first thing they do is smooth out the
> fields? What if one reason farm land is so rugged is that farm tractor tires
> chew it up? What if robots companion-plant crops in squares instead of rows?
> Robots allow looking at agricultural problems in entirely new ways, just
> like they have changed how laws are mowed (every day instead of every week).
> It almost seems to me like the roboticists making lawnmowers have reinvented
> sheep. :-)


You mistakenly assume that all of this has not been tried and studied
in great detail.  Where it makes sense, it *is* being used.  American
agriculture is technologically pretty far ahead of where you think it
is. One of the reasons Americans can aggressively compete on price
against third-world labor in things like the rice market is due to a
high degree of computerization and clever automation. Robotics are
rapidly becoming a part of farms *where it makes sense*, and have been
for some time but the implementation might look different than what
you are imagining because there are real-world issues you are
ignoring.


> You use the word "efficient".


Yes, not wasting scarce resources unnecessarily.  Are you really
arguing that we should wantonly waste finite natural resources?  The
goal of farming is to produce food.


-- 
J. Andrew Rogers
realityminer.blogspot.com