The Fallacy of the Malthusian ‘We Need Greenfields to Grow Food’ Argument against Housebuilding.

A bad argument you often hear on the interweb is ‘you shouldn’t build on greenfield sites we need to grown food..especially with Brexit etc. etc.’

There may be many other arguments for not building on greenfield sites but this is a particularly bad one.

Superficially it sounds attractive.  Cities are often build on areas with the best soils as former market towns.  We also need to keep food miles down.

The reason it is a bad argument is as follows:

1.The Empirical Argument – The most Rapidly Urbanising Areas are the ones with Greatest Food Productivity.

As you can see from this World Bank Data the effect is particularly strong in the developed world, with its climate and stable system of property rights, but is also true in the developing world to a lesser extent.

World Bank

Countries such as Japan and Korea that rapidly urbanized in the last century also saw a major agricultural reform alongside urbanization and industrialization.  The mechanization of agriculture dramatically increased labor productivity, although not enough to keep up with growing demand.

Clear property rights on agricultural land, agricultural extension services and rural infrastructure such as irrigation, rural roads, power and rural organizations were important too.

As incomes rose, however, the concerns over food security receded, and Japan and Korea now import a considerable share of their food needs.

They import more but they can afford to import more because they are richer, at the same time domestic food production has risen in both countries despite loss of agricultural land.

2.The Theoretical Argument – Freed Agricultural Labour drives Urbanisation and Economic Growth – The Lewis Model.

Which won a Nobel Prize in 1979.

In his theory, a “capitalist” sector develops by taking labour from a non-capitalist backward “subsistence” sector. The subsistence sector is characterised by informal institutions  so that producers do not maximise profits and workers can be paid above their marginal product. At an early stage of development, the “unlimited” supply of labour from the subsistence economy means that the capitalist sector can expand for some time without the need to raise wages. This results in higher returns to capital, which are reinvested in capital accumulation. In turn, the increase in the capital stock leads the “capitalists” to expand employment by drawing further labour from the subsistence sector. Given the assumptions of the model (for example, that the profits are reinvested and that capital accumulation does not substitute for skilled labour in production), the process becomes self-sustaining and leads to modernization and economic development.

The point at which the excess labour in the subsistence sector is fully absorbed into the modern sector, and where further capital accumulation begins to increase wages, is sometimes called the Lewisian turning point.   After this point agricultural wages match industrial and urban rural migration caese.  Importantly it also limits cities consuming all agricultural land.  In many western nations rural urban migration has ceased and their is limited international in migration, so capital has switched from ‘labour expanding’ to ‘labour saving’ decreasing the labour share and also leading to the slowing down of explosive growth in the largest cities.  Middle eastern cities are an interesting example their growth driven by mass inmigration of cheap labour from Pakistan and the Phillipines.

The nub of the argument, urbanisation drives agricultural productivity which increases urban labour forces until cities reach their optimum size.

3. .The Theoretical Argument – Increased Food Demand Increases Agricultural Productivity  – The Boserup Thesis.

In the Malthusian view, when food is not sufficient for everyone, the excess population will die. However,  Ester Boserup argued that in those times of pressure, people will find ways to increase the production of food by increasing workforce, machinery, fertilizers, etc.

Boserup argued that the threat of starvation and the challenge of feeding more mouths motivates people to improve their farming methods and invent new technologies in order to produce more food.

4. The Theoretical Argument – Larger Cities have a larger hinterland Within Easy Travel Distance to Markets   – Von Thunen.

In Von Thunens classic model the use which a piece of land is put to is a function of the cost of transport to market and the land rent a farmer can afford to pay (determined by yield, which is held constant here).  Areas closest to cities are the aeas with lowest transport costs, so see intensive agricultural use.

Also as cities expands the areas within a fixed distance of the edge of the city or any part of it expand geometrically, leading to a proportionate increase in agricultural inesnity.

The three theories are complementary, some focusing on capital, some of demand others on the supply side.  Put together you can see that heavily urbanized areas are typically surrounded by very high productivity agricultural areas.  Which you can see for example in the Netherlands.  Chemical inputs are a separate issue, you could equally have intensive organic under glass.

5.  The Empirical Argument – More Ubanization leads to More Urban Food Production – which is highly productive.

Many recent studies have shown the very high levels of urban agriculture produced in developing countries.  Even in the developed world Robin Best;s work conclusively proved that food grown in back gardens and allotments in urban areas exceeded by a long way the food lost from urbanization. I’m suprized by the sneering I hear to the argument from precisely the same people who encourage urban greening and urban agriculture.

Researchers, using satellite data, found that agricultural activities within 20km of urban areas occupy an area equivalent to the 28-nation EU. 

Indeed the total area of rice farming in South Asia was smaller than what was being cultivated in urban areas around the globe.

Robin Best showed that since the second world war the mount of land lost to agriculture  from urbanization was more than outweighed from transfer from intensive forestry to agriculture.  Between 2007 and 2014 the amount of agricultural land has increased.  We don’t have a shortage of agricultural land we have a shortage of housing.