“Black swans” are events that can shock, damage and disrupt existing systems, sometimes completely destroying the pervious system and forcing the establishment of a new paradigm. As Don Buckingham, president and CEO of the Canadian Agri-Food Policy Institute (CAPI), told attendees at the 2019 Agricultural Excellence Conference, these events repeatedly redefined agriculture over the past 10,000 years and are occurring more and more frequently. While these events can cause challenges for farms of any size, smaller farms may be able to more easily position themselves to be resilient and adaptive to change.
The term “black swan events” was used by author Nassim Nicholas Taleb in his 2007 book The Black Swan: The Impact of the Highly Improbable. The term comes from how in the 15th century and before, common understanding in the western world was that all swans were white. However, in 1697, a Dutch explorer discovered black swans in Australia, which forever changed the definition of “swan” and led to a revolution in thinking about inductive and deductive reasoning. Taleb uses the term then to refer to large scale, unpredictable or random events that have significant consequences and transformative impacts.
As Buckingham notes, agriculture (and food itself) has been subject to black swans many times in history: the advent of fire and cooking, animal domestication, selective breeding of plants, longterm shipping, improved food storage methods, synthetic inputs and, more recently, artificial intelligence and the application of genetically modified organisms.
Black Swans are not-necessarily driven by technological advances though. The Great Grain Robbery (the 1972 purchase of 10 million tons of grain by the Soviet Union at subsidized prices), caused grain prices to reach 125-year highs, a 50 per cent increase in overall food costs and soybean prices rising from $3.31 to $12.90 a bushel.
The key to weathering a black swan is resilience, being able to manage risks and create new opportunities from adversity, to innovate and adapt in the fact of a system shock. And while larger farms may have more resources at hand to use, small farms are well positioned for resilience.
“I grew up on a small farm,” says Buckingham. “I hope my presentation didn’t come across that we need to ‘do resilience.’ We’ve been doing resilience the whole time. I think resilience is more about using the resources you have in a very capable way as opposed to having a lot of resources. From that perspective, I would say that the smaller farmer is not disadvantaged, though there are some options for resilience that are available for a bigger ticket price. I don’t deny that.”
Buckingham identifies three levels of resilience to system shocks: absorption (being strong enough to take the hit from a shock), adaptation (being able to incorporate new dynamics into your business plan) and transformation (outright changing your approach in the face of the new reality). As such, a larger farm may be able to absorb the impact from an unexpected $100,000 expense, while a smaller farm may not.
“So it becomes a question of ‘how do you have an attitude of resilience?’” says Buckingham. “What do I need to have in place to absorb some risks and what do I have in place to think about transforming my business so it’s more resilient. For instance, one thing might be developing a community that will help you absorb those things, coming to conferences, having education, renewing your business plan, not having over-exposure. I think from that point of view, the small farmer and large farmer are in the same position.”
Increases in technology have caused the intervals between black swans to shorten. An animal health issue on the other side of world may not have impacted other areas at one time, but when product and information spread quicker than ever before, those issues can spread quickly as well.
“An expression I use is, ‘the problem with instant gratification is it’s just not fast enough anymore,’” says Buckingham with a laugh. “I think what’s happening is there will be a saturation point. Why they’re happening more frequently, in my own personal opinion, is that we have instantaneous information transfer and we have a contiguity of population unlike ever before. We have products and people that cross the world every single minute. And there’s a lot more people living a lot closer together. Today, it would only be a matter of hours, weeks or months before a pathogen, or even a technological change, [spread to other areas.]
Climate change is the potential future black swan that is most talked about currently. A climate catastrophe could certainly cause dramatic and rapid changes in the status quo of how humans live and produce food. Buckingham notes that one of the most destructive black swans in history was the Black Death, a bacterium which caused several forms of plague that resulted in the deaths of 30-60 per cent of the population of Europe between 1347 and 1351.
Agriculture was changed because they did not have the people necessary to continue the previous production methods.
Buckingham believes, however, that smaller farms have an important role to play in the new dynamics to come as there is still a vast percentage of Canadian farming that comes from smaller, family-run farms.
“They’re really the bedrock of agriculture and they provide what I would call ‘a blanket of resilience,’ and then it becomes a question of ‘are they equipped to take the next step, either in adaptation or in transformation, to having a system that’s going to be more resilient?’ They have a critical role. They have a lot of standing with the urban public and also they have their own families to feed, so they have their interests in being healthy and sustainable.”
— Matt Jones