Media Clipping — December 2003, The CornerPost, Vol. 26, No.10
published by the P.E.I. Department of Agriculture, Fisheries, Aquaculture and Forestry

Measuring Progress

Economists do it. Accountants do it. The tax man does it. But when they do it, they all measure results in different ways. Most financial and economic measurements are concerned with indicators such as the Gross Domestic Product, farm cash receipts, net margins, capital assets and so on. They are vital tools for measuring the health of economies, farm operations and other financial activities.

No matter how useful these tools, however, they fail to measure other critical assets which are vital to the sustainability of societies. What is measured is usually a sign of what is valued by a society. If critical social and ecological assets are not counted and valued in a measure of progress, they will not receive sufficient attention from policy makers and industry participants.

New index of “progress”

A new index has now been developed which is aimed at measuring sustainable development and well-being. It’s called the Genuine Progress Index, and it responds to the need for better measures of progress. The current reliance on economic growth statistics alone obscures the importance of natural and social capital. That reliance also fails to distinguish economic activities that are beneficial from those that are ultimately harmful.

If a tree is cut down and removed, it adds to economic activity. If not replaced, however, the resource is depleted. The net effect of that activity is negative.

The GPI is based on the understanding that social, economic and environmental realities are inextricably linked. It recognizes that true long-term prosperity and well-being are ultimately dependent on the protection and strengthening of social and environmental assets. If these deteriorate, society is not living "sustainably."

The index must also answer the question, "progress towards what?"

To put a new index in place, GPI Atlantic was established in 1997 and a pilot project for Canada was undertaken in Nova Scotia. Statistics Canada provided in-kind support. The Nova Scotia GPI consists of 22 social, economic and environmental components, including the natural capital related to soils and agriculture, forests, marine environment and fisheries.

Unless a dollar value is put on resources such as soil quality, people unfamiliar with farming are not likely to make the critical choices needed to keep agriculture, not only economically viable, but thriving for future generations.

The report on agriculture is based on the assumption that the ability to generate an adequate income from farming enables farmers to devote resources to quality food production and to land stewardship that is essential to maintaining the value of natural capital in agriculture. The report found that while farm cash receipts in Nova Scotia have risen by 12 percent over the past 28 years, all other indicators of economic viability showed negative trends. Net farm income, for example, declined by 46 percent over that time, and expenses to income and debt to net income rations climbed. It these trends continue at current rates, says the report, there is likely to be a virtual demise of several agricultural sectors in the province, including apples, vegetables, beef and hogs.

Measuring the footprint

GPI Atlantic is also conducting what is called an "ecological footprint" for Prince Edward Island. The "footprint" will measure the impact of current human activities on the environment by taking into account the resources used in daily living. Preliminary results would indicate that Islanders - like people in other industrialized societies - are consuming resources at a faster rate than they can be replenished by the planet. The report will be released later this year.

So while forecasters are preparing to provide their prognostications for 2004, they may be overlooking some of the more critical indicators of "genuine progress." The value of those resources must be conserved in order to continue to have vital rural communities and healthy food.

Copyright © 2003 The CornerPost