Over the weekend I listened to an episode of This American Life on NPR in which they broke down the current financial crisis in the space of 59 minutes.  The show approached the banking meltdown from the angle of balance sheets, highlighting in simple terms the reason we are in such a pickle, namely that banks lent money to people who didn’t pay them back.  With the government bailout money, the taxpayer will end up paying for the mistakes of bank owners who lent carelessly, and greedy consumers (not so different from the rest of us) who borrowed more than they could afford to pay back.

In its simplest terms, a bank works when the banks assets (the money it earns when you and I pay back loans) are in balance with its liabilities (the money it owes to depositors, employees, shareholders etc…).  This number gets thrown off when people do not pay back the money that they borrow, thus cutting into the money the bank owners have allocated to pay not only themselves, but the good people who have placed their hard earned dollars in the bank.

While I am still angry with the wealthy bank owners, finding it easy to blame them for doing a bad job, I have finally started feeling appropriately guilty for my own actions.  I may not have defaulted on any credit card payments or made a major purchase I couldn’t afford, but there was a time in which I freely used credit to live beyond my means.  It seems that once again we Americans are faced with a situation in which we, knowingly or not, have created our own mess.

The problems in banking are similar to the problems in agriculture, only with an ecosystem not just a financial system at stake.  The model for sustainable farming looks a lot like the balance sheet of a healthy bank.  The monetary assets (the foods that can be sold) need to be balanced with the liabilities (the cost of the raw materials, fair wages for workers, etc…).    In conventional farming these numbers are out of whack.  The money earned from the sale of commodity crops doesn’t cover the cost to grow them.  Instead of asking the consumer to pay a fair price to the farmer, the government has opted to create a program of subsidies.  We pay the farmer indirectly with our tax dollars, instead of paying a fair price at the check out counter.  Since farmers are paid by volume produced, not through the discretion of the consumer dollar, this subsidy system ensures that subsidized crops will be grown in mass quantities.  Thus we get an over abundance of inexpensive corn, soy, etc… that has been grown on our dollar, and which is turned into the processed foods which have made us unhealthy.

The non-monetary assets and liabilities of farming must also be considered.  On a sustainably run farm the soil is kept in balance – nutrients used to feed growing plants are always replaced – whether through crop rotation, or by an integrated system of animal management, the ultimate goal is maintaining a healthy ecosystem.  When all runs smoothly, weeds and pests will also be in balance, eliminating the need for toxic herbicides and pesticides.  On a conventional farm, crops are grown in monocultures, which strips the soil of nutrients, requiring the application of fertilizers, which are often petroleum based.  They also employ a heavy use of herbicides and pesticides, which wash into the water system, creating havoc for any life forms that happen to live downstream.

Conventional farms, like troubled banks represent a system that is out of balance.  In both cases it is up to the American people to make the necessary, though difficult changes.  We have gotten used to buying with an endless stream of credit, and paying less than 10 percent of our disposable incomes on food – one of the lowest percentages in the world.  To help our financial system, we need to pay off our debts, and start to live within our means.  To help our agricultural system, we need pay a fair price for the food we consume, and choose to purchase from those farmers who practice sustainability.  As a nation we need to look beyond our immediate discomfort, take responsibility for our actions, and strive for a future that is in balance.