Australian Senator Asks Which Fund Manager Should We Kill and Eat First?

When an investment fund describes itself as ethical, I’m always curious. Who decides what’s ethical and what’s not? And why are some sets of ethics perceived to be superior to others?

Those questions came to mind when I read how superannuation fund Australian Ethical has concluded that agriculture is not sustainable. Therefore, it will not be investing in any food production companies. A couple of other funds have made similar noises.

The decision has been widely criticised in the media as unrealistic and ridiculous, given food production is fundamental to our lives. It is ridiculous, but my interest is in the company’s claim that it is acting ethically. What are the values behind that claim? Are they values that the rest of us should accept?

You get a feel for Australian Ethical’s values from the fund’s website. It says it does not invest in things like tobacco, uranium or coal mining, exploitation of people or old growth forest logging, and says it will not invest in organisations that pollute land, air or water, or destroy or waste non-recurring resources.

Organisations that ‘extract, create, produce, manufacture, or market materials, products, goods or services which have a harmful effect on humans, non-human animals or the environment’ are also out.

It supports the development of sustainable land use and food production, the preservation of endangered eco-systems, and the dignity and wellbeing of non-human animals. It also aspires to build a ‘new low-carbon economy, fund medical breakthroughs, technology breakthroughs, efficient transport and more.

And it seeks to use its influence to improve ‘ethical behaviour’. In other words, like missionaries promoting religion, it is so convinced of the merits of its ethics it feels entitled to spread them.

One may question why anyone would oppose zero emission nuclear energy, poverty-relieving coal-fired electricity and renewable forestry. However, I don’t believe I’ve ever met anyone who knowingly advocates activities that are harmful to the environment or animals. Certainly all the farmers I know are ardent environmentalists, and caring properly for livestock is simply good business.

What it comes down to is that the fund has a particular concept of sustainability, perhaps the most over-used and misused word in the English language. Everybody uses it, but there is no agreement as to what it means.

A manager might suggest that maintaining the current business course is not sustainable; a lawyer might argue a particular case is not sustainable; an athlete might declare a certain training program to be unsustainable; and increasingly, the impact of an activity on the environment might be described as unsustainable. The only thing you can be sure of is that being ‘unsustainable’ is not good.

It has long been green dogma that modern agriculture is not sustainable. Terms such as monoculture, factory farming and industrial agriculture are used in a derogatory sense to reinforce that view.

Plenty of people, either in a spirit of compromise or because they don’t know any better, go along with the suggestion that agriculture should be ‘more sustainable’, the assumption being that it isn’t now.

My preferred definition of the word comes from former Norwegian Prime Minister Gro Harlem Brundtland, who said, ‘Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs’.

Based on that definition, modern agriculture is not only sustainable, but more sustainable than it has ever been.

Here in Australia we’re often told that anything done by humans to change the environment is evidence in itself of unsustainability. The key assumption behind the term ‘wilderness’ is the absence of human impact, or at least of white Europeans.

That thinking is less common outside the country. A farm owner in Ireland once told me of evidence of human settlement in the area going back 5000 years. He also said that his farm, which has been in the family for generations, could run 20 cattle in the 1920s, 50 in the 1950s, 100 at the turn of the century and was now up to 120. He expects it to be running 150 within a decade.

It is obvious his farm has not only been capable of providing for its previous and current owners, but will continue to do so for future generations (in this case the farmer’s children) as well. In other words, it has long been sustainable and is sustainable now.

What’s more, it’s the use of modern technology — so despised by green dogmatists — that makes this possible. Vaccines (increasingly the product of genetic engineering) and chemicals help keep cattle healthy. Pasture management using hybrid seeds and chemical fertiliser means there is enough food for them. High tech nutritional supplements ensure they receive a balanced diet. Advanced artificial breeding technology means cows produce a calf each year and that the calves grow faster or produce more milk than ever before, and that there are more heifer than bull calves on dairy farms.

If agriculture is to feed the world, it needs more sustainability like this. It will be modern technology, not a return to the last century or beyond, that ensures our soil and water are preserved. Genetically modified crops and pasture plants, for example, are not only fundamental to raising the nutritional value of pasture, but combating desertification and drought.

What’s needed is recognition that human impact on the environment is not only unavoidable but mostly highly positive. Moreover, the concept of virgin wilderness untouched by humans should be exposed for the lie that it is.

Australia’s ‘old growth’ temperate forests are all regrowth following repeated burning by Aborigines over thousands of years. The bison-grazed plains of North America were remade by Native Americans long before Europeans showed up. Many of the mist-shrouded treeless grasslands of the tropical Andes are the result of burning and grazing after locals cut down the natural forests centuries ago.

It is a simple fact that nature is resilient and adaptable. In a thousand years the farms of today will be producing far more food and fibre they do now. That makes them sustainable, and gives the lie to the ethics of Australian Ethical.

There is absolutely nothing ethical about remaining rooted in the past, using outdated technology to produce food that many people cannot afford to buy. Indeed, by my ethical standards, Australian Ethical is unethical in its refusal to invest in modern agriculture and contribute to the availability of high quality, nutritious, affordable food produced more sustainably than ever before.

Which raises an interesting question: if everyone decided investing in agriculture was unethical, we would soon find ourselves in an ethical dilemma. Given an inevitable shortage of food, which fund manager should we kill and eat first?


David Leyonhjelm,

Contributor, Markets and Money

Ed Note: David Leyonhjelm is a regular Markets and Money contributor. He has worked in agribusiness for 30 years and is a NSW federal senator — and somewhat of a controversial figure. David represents the Liberal Democratic Party in the Senate. The LDP is a libertarian party which advocates personal freedom and choice, and limited government.

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David Leyonhjelm is a regular Markets and Money contributor. He has worked in agribusiness for 30 years and is a NSW federal senator — and somewhat of a controversial figure. David represents the Liberal Democratic Party in the Senate. The LDP is a libertarian party which advocates personal freedom and choice, and limited government.

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