By Tom Manley
AgriNews Contributor

Lifestyles, business practices, and farm practices are stable, familiar, and appreciated until something big changes. Most humans do not like big changes, especially when they feel forced by external pressures.

The significant jump in fuel costs fits the description of a big change from external sources. We don’t want and don’t need it. We resist. We hold out expecting the problem to be resolved and the old situation to come back. We want to blame someone like the government for its alleged anti-farm policies and carbon taxes.

With respect to energy prices, the writing has been on the wall for some time. It is a safe bet that fuel prices will not go down significantly for a long time, if ever. Even during the economic slowdown of the pandemic, fuel prices at the pump stayed above, even significantly above $1 per litre. Besides the price of fuel at the pump, the same goes for all high-energy products such as fertilizers, travel, long distance supplies, distant markets, and so on.

To sum it up, we need to reckon with our high-energy economy and the global market paradigm.

During a recent federal election campaign, a Conservative candidate argued against significant government policies or tax incentives that could green the economy. He argued that we can simply rely on technology and that the technology was already available in terms of low-emission vehicles, LED lights, and so on.

0That answer only spoke to the means of making a shift to a low energy and low impact economy. It did not speak to the motivation or incentive in making the technological shift to a green economy. Why would individuals, businesses, and farms replace their current technology that works fine before it is due to be replaced? Why would we even change the type of technology at the purchase decision when the current generation of technology is proven, reliable, and less expensive than the new generation of technology.

A change of technology requires a financial incentive, a small incentive if the old equipment is at the end of its life, but a major incentive to replace equipment before the end of its life. The saying “out with the old, in with new” is only applicable when the new technology has a better cost-benefit case compared to the old technology.

The cost-benefit analysis also applies to lifestyle choices and business decisions. We have large lawns, cottages, long distance vacations, toys from Asia, and big vehicles, export and import markets, not because we need them, but because we want them, we can have them, and they are affordable. No study of society has shown that they make us happier, but we sure get angry when we cannot have them, or they get expensive.

In the face of high energy costs, farming can and will make changes, some of them painful and many of them beneficial.

Let’s start with the interesting changes. High transportation costs and global disruptions in logistics make domestic products more competitive such as local fruit and vegetables, Ontario wine, and domestic fine cheeses. Canada is a net exporter of food, but domestic prices are often suppressed by global competition. While consumers are not happy with inflation, the rising global prices will allow domestic prices to rise to more profitable levels for Canadian farmers.

The high cost of energy will give farmers a new cost-benefit analysis for technological decisions. EV and hybrid vehicles were already more cost effective over their lifespan compared to conventional vehicles, but the pay-back period was too long for many people and the upfront cost was too intimidating. With the higher cost of fuel and maintenance, low-emission vehicles are now on the front page for many people. The technology is also evolving quickly, making low-emission technology a reality in larger vehicles, trucks, and larger machines.

The same goes for electrical production. Without the government incentives, private solar and wind production of electricity did not make much economic sense. But the purchase costs of these systems continue to drop while the cost of electricity inches higher, especially if it relies on fossil fuels. Farms will revisit the cost equation and consider solar and wind production for things like barn lighting, milking systems, and small motors.

Finally, we come to fertilizers, especially the expensive use of fossil fuels to capture nitrogen. The ecological farmers know that nitrogen is free in the air that we breathe. They implement farm systems such as legume crop rotations and livestock manure management to fix nitrogen efficiently while producing sustainable yields, controlling weeds efficiently, and earning premium prices in the market.

To conclude, we cannot let a good crisis go to waste. The high energy costs are the catalyst to make the changes to technology, lifestyles, and business practices to really green our farms and our economy. Yes, the change will be painful for many people. We need government to enable change and soften the transition, but not to fight the inevitable change.