Can we ever defend against agricultural warfare?

Ian Curtiss:
Alicia, thank you so much for joining us here at the Risk Gaming Podcast.

Alicia Ellis:
Well, thanks for having me.

Ian Curtiss:
There's lots of things that we can talk about. I'm curious, how did you get into agricultural security as a concept? Your PhD dissertation is quite interesting, I think, in this field.

Alicia Ellis:
Yeah, that's actually an interesting story. So I guess I'll start with that, and then I definitely do want to come back and talk about the game because it was so interesting, it's so important. Yeah. In terms of my background, I did come to Ag in a little bit of a roundabout way. It was definitely not my first career. I actually joined the military after I got out of college. I'd studied political science and then was in the Air Force for a while and moved all over the country, deployed a couple of times, came back and used the GI Bill to get a master's degree in international relations. And then I moved to Washington DC. Took something called a presidential management fellowship, I spent some time at the Treasury Department and some time at the State Department.
After about two years in Washington DC I just could not resist the pull of the west. I just became obsessed with the idea of leaving it all behind and moving out west to Miria a cowboy or something. So that is essentially what I did. I came out here, I applied to ASU and I was working on my PhD in Political Science against Study and international relations primarily. And met my husband and he is a fifth or sixth generation farmer. They've been farming Arizona since before it was a state. And so he's the one who taught me to drive a tractor and look at a field and see how the crops were doing and ride a horse, which I'm still not very good at, but I'm working on it. But this kind of dovetailed, after a couple of experiences.
We were raising beef, we raised about 40 head a year, mostly for local restaurants, and we did some direct to consumer stuff. People could get on the website that I build and they could order our beef and we would have it cut for consumers and delivered to their house. And we did that for a few years. And then COVID-19 hit and there was this massive disruption to the meat industry. A lot of people probably remember the empty butcher counters. And that was really interesting from my perspective as a small beef farmer basically, because we had actually stocked up for quite a while because Four Peaks Brewery was getting ready to make us their sole beef supplier, and we needed to kind of stockpile for a customer that large. And so we had thousands and thousands and thousands of pounds of beef in deep cold storage ready for their new menu to launch. And three days after the menu launch, COVID-19 shut down all the restaurants.
So we actually thought we were going to go bankrupt. It was a really bad situation, but a couple of weeks after that, you had COVID-19 spreading through some of the meat processing factories, and that's a huge bottleneck in our supply system. So it wasn't that we had shortages of animals, but you ended up with shortages behind the butcher counter because people couldn't get their animals in for processing. So all of a sudden our direct to consumer sales went from just a small side thing, 500 bucks or so a month to $20,000 in two and a half weeks. And it was just me and one other person running all over the valley delivering all this beef to people. But that really got me thinking about the connection between agriculture and security, which is what I do now, very security focused stuff. I run our master's programs in global security at ASU. So that was kind of the first experience.
And then the second one was just a couple of years later after Russia invaded Ukraine. We couldn't get fertilizer for a little while. So my husband and I farm about 500 acres outside the valley, and then my brother-in-law farms about 1500. And it came time to plant, I think it was early March, and he couldn't get fertilizer. And that was because, not only did you have the blockade in the Black Sea that was not allowing a lot of things out. Everybody talked about grain, but it also, Russia and Ukraine are huge fertilizer exporters. But at the same time, Russia had cut off the supply of natural gas to Europe. Well, you need natural gas to make ammonia, you need ammonia to make nitrogen fertilizers. So both of those things were happening at the same time, caused major disruptions in the global fertilizer supply chains. And in the American Southwest, we plant the first week of March, we plant a lot of the year actually.
So that was a big problem. We had a couple of weeks delay getting fertilizer. The prices were through the roof. So not only did my brother-in-law see about a 30% drop in yield that year, but also the cost shot way up because of the fertilizer crisis. So that also got me thinking, okay, you're talking 30% in just two weeks, what if this had gone on a little bit longer? Or what if this happened in May when the entire Midwest was planting? We could have been looking at a food security crisis at a national or even potential global scale. So that's when I really started thinking about the kind of two areas of my life and how they intersect and how I could really start looking at agriculture through the lens of security and start writing interesting things that nobody's really looking closely at.

Ian Curtiss:
Okay, so there's food security and there's agricultural security. And food security has been something that people have been talking about for a while, and it's generally more from the perspective of helping the poor. They now have access to good food, food security for certain regions in the country or other countries elsewhere who face famine or so forth. But then agricultural security is far more, seems to me like it's far more about the supply chain and kind of a whole system perspective. Am I seeing that right? Or how do you define the difference?

Alicia Ellis:
That's a really good way to put it. And you're right. A lot of people look at food security. That's definitely not a new thing. And for the most part it's defined by availability, access, et cetera. A lot of times it's measured by nutritional value, the number of calories, et cetera. So you are looking at areas where you have deficiencies there and where people are chronically food insecure. And we don't really think about that in the United States. So when I'm thinking about agriculture security, I'm thinking more at a systems level of protecting that incredibly efficient system that we've built. Those two examples that I just gave you, to me were experiences that sort of poked holes in that sense of security that we have. Because you realize that these systems, while incredibly efficient, do have potential choke points and potential vulnerabilities that can be disrupted by accidentally by some sort of climate or weather related event or intentionally by an adversary that is closely studying what those vulnerabilities are. And very quickly you would see the impact.

Ian Curtiss:
And so I remember whatever it is, 15 years ago when I did my master's degree at Beijing University, beta picking university, we had a class on non-traditional security. We covered all sorts of topics, water security, agricultural security, biological security, economic security in all these different concepts. And many in the room, particularly in the west, had this perspective in the class of like, oh, these are just topics for paranoid communists. Was the cliche term was like, oh no, these are economic issues. It's kind of interesting, but these will resolve themselves because of the market and it'll all be fine. We don't have to worry about this, this is just the communist party trying to control everything. And here we are today, 15 years later, our federal government, state governments, I mean actively talking about all of these issues daily, creating all sorts of new laws, industrial policy to protect our economic security. Things have totally flipped here in our own countries.
The longer that I've looked at this ever since that class, the more it's occurred to me that we've just defined what is an economic interest and what is a commercial interest by our own interest. So the great example of that is, the Dust Bowl, right? Everyone remembers the Dust Bowl, we've all read about that in whatever seventh grade history, whatever it was. And we created EL passed all these laws to help protect farmers from overproducing and under-producing someone to support to start paying them to not grow crops, certain years, these sorts of things. And that's industrial policy if you think about it. And it's a sort of agricultural security in the sense of we want consistency in our food markets.
And this speaks to what you brought up in the Ukraine war, which is this incredible volatility that can occur when the supply chain is thrown in disarray. And so it seems like a big part of it is managing that volatility is flattening the curve as much as you will of the ups and downs of the market. And so our country has already done a ton of industrial policy arguably to support the Ag industry in this way. But things get complicated really quickly when you think about where all the inputs come from for that system that we have. And so it's no longer the Green Futures Act of 1920 something or other. It's far more complex and nuanced of what we're looking at today. How do you see the volatility and what are the unknown things that might occur down the road that you're looking at?

Alicia Ellis:
That's a really good question, and you make a good point too about, and this is one argument that I hear a lot when I talk about this is that, markets are resilient and then they are. You're right. But certain sectors like Ag can't absorb a disruption for even a relatively short period of time. And some things like food are existential. I think you have to think about those things in advance, and you have to think about the unthinkable too. And that's one of the things that I want to do with the New War game that we're building. I think it's about not just building something that is realistic or that has already happened or is probably going to happen, but to actually think about the things that could happen, even if it's not necessarily likely that they will. I mean, nobody thought on September 10th that somebody was going to take an airplane, run it through a building and kill 3000 people.
I think most of our failures in the past are most spectacular ones are about a lack of imagination. So, I take that sort of thinking and I apply it to our food systems, and I think about those vulnerabilities in advance that could be exploited and what the impact could be if we aren't thinking in advance about security and about resilience as opposed to just economic efficiency. You made another good point at the beginning of this too. You're talking about the way we've separated out the economic or the commercial interests, and we look at them in a vacuum. But it's not just that they're not in a vacuum anymore, they really never were. The economic and the political cannot really be separated. And I think that we're starting to come around to that view and starting to look at some of these systems in a different way, particularly the ones that we consider critical. And we are talking about that a lot in things like chips manufacturing and defense supply chains and critical minerals, and I think agriculture has been really understudied.

Ian Curtiss:
Thank you for that. I want to pivot back to the game then, because so much of this agricultural concept depends on fine details. And it's a market, so you're buying and selling at different prices. Everyone's trying to find the right opportunity in the market, but you're also dealing with these vast, huge international trends and market pricing things that a single farmer has little control over. So I'm curious to hear a little bit more about your farm's access to water and how that plays out in Arizona. For many folks who sit in the East Coast or northwest or places where it rains a bit more, they think, well, how does this even work? It doesn't make any sense. It's all backwards and so forth. And maybe it is in the long run, I don't know. But for a single farmer, how's it playing out right now?

Alicia Ellis:
Yeah, you raised a really good question too. The water question is huge, and desert farming is really important, not just to the United States, but that's the case all over the world. It's somewhere where you can farm all year round. They're not growing anything in the winter in Montana, so it does play a really important role in keeping us fed. But a lot of those warm climates where you can farm year round are area climates. So the big problem that you do have to solve then is water. And it's not exactly easy to dry farm in Arizona. We have to have irrigation systems, and we have really advanced ones, and we've made incredible advancements just in the last decade or so. Right now, our farm is undergoing a huge investment to make it more efficient, switching to sprinkler systems as opposed to flood irrigation. And it's looking to save about 20 to 30%, which is huge.
We're also using a newly patented compost that over time increases the water holding capacity in the soil. And actually, one of the things I want to do with the new agriculture and security project is get some soil scientists in there to start measuring that, because our guess is that, that potentially saves another 15%. So now you're talking about just huge savings on how much water you need to farm, the same amount of land, but you don't lose any productivity because of it. And that would be absolutely huge for Arizona farmers because in some areas, as we're dealing with water shortages and water politics, which is a big part of it as well, some farmers have seen their water cut by 50%, and so they have to figure out how to continue to be productive and continue to produce food. Water is probably the biggest part of it. So this is actually, I think, a cool area to do some of that early research and make some of those huge leaps in water efficiency because the environment forces you to, but some of these things could be applied anywhere.

Ian Curtiss:
I don't have the exact numbers in front of me, but it's roughly the 80/20 rule, if I recall, of the water use in Arizona is 80%, or I don't think it's quite 80, but it's something like 80% huge majority of it is goes farmers.

Alicia Ellis:
Agriculture? Yeah, I've heard somewhere between 70 and 80 usually. The important thing to remember about that I think though is that that means 80% of the water is going to produce something else that we need to survive. We need water to survive, we also need food to survive. And we're turning that water into food every day. So you could also look at that and go, okay, 70%, 80%, whatever statistic you're using is turning into something productive and something we need to live.

Ian Curtiss:
What's so interesting about metrics is, our metrics are generally about economic growth. And so you look at, in the state of Arizona, it's something like 80% of our economic growth comes from non-farming, and it's probably far more than 80% comes from non-farming, non-agricultural industries. And so if you're looking purely at an economic output metric, it's like, oh, well, if there's water shortages, then we need to pivot the water towards more productive economic activities. And this gets into back into the game, which is based on this complex structure which these aqueduct and irrigation systems were built on, which is from federal funding. And as the Bureau of Land reclamation under today, now under the Bureau of Land Management, which is under the Department of Interior, built all these dams and everything starting 70, well, no, almost 80, 90 years ago now, they were financed each project individually.
And so as a result, all these different projects had different pricing mechanisms for their local farmer regions that they serve. And so you have all these different prices of water all over the southwest, and they're priced differently than water that is brought to cities. And so today there's all this argument of, oh, these farmers, they've been actually helped too much by the federal government. They've been subsidized all this time by the money put into the infrastructure, and this water should actually go to more productive sources, economically productive places in the state or in the region and so forth. Which sounds really good economically, put the business high and you're on and you're like, oh, yeah, that makes perfect sense. That's totally what it should be. But then it comes back to, so then where's the food going to come from that everybody eats? So is that a reliance on other countries? Does that mean greater imports of food? Does that mean-

Alicia Ellis:
There are a lot of security reasons not to do that.

Ian Curtiss:
Yeah, yeah, exactly. So I'm curious to ask, you get your take on there's this growing cultural friction around farmers versus cities and the water and so forth, if you're hearing anything about that, but then get back into, the supply chain and the agricultural security of, if we're not producing in the southwest, which is such higher yields, then where does it come from? What are the market drivers behind that? And what's the potential future and risk of that?

Alicia Ellis:
That's one thing that we are facing already, not as much probably in the more rural areas of Arizona, but we're just barely outside. Actually, our farm is in Maricopa County. We have some in Pinal County, but it has grown so much and the housing developments go up all around it. Most of the farmland around here is actually not owned by the farmer anymore, it's owned by developers and they hang onto it and allow you to continue farming it. It gives them a tax break, so there's an incentive on both sides, until they're ready to sell it for more housing developments. And the problem that you then run into is that it's really difficult then to make long-term investments in your land when you don't own it. So if you want to make improvements to water efficiency, if you want to build up the soil structure and soil health, that gets really, really difficult.
So farming in the areas where there's now a kind of rural urban interface is increasingly difficult for those economic and practical reasons. So I think you're right about the growing tension there. And it was really interesting to see the way that that played out in your war game, but you actually introduced some of that tension in there. I had what was probably my favorite role in the game, and I just lucked into it that I happened to sit down in that seat. But I was a local politician who not only was a farmer herself, but was very rooted in that community. That was the constituency that put me there, but it was in my packet that I cared about this issue that I cared about seeing the farming community survive and thrive. And then midway through the game, you even introduced a change in my incentives such that I was dealing with, I think it was a personal medical issue. I was going to need money and I had an incentive then to sell my farm and sell the water rights and that would enable them, the chip fabs to have more water.
And so my character had to make this really important choice, and it was difficult and it put to the sort of competing incentives, even within my character up against each other. But what I decided to do had a real impact on the options of the other players and how the game turned out. So that was really interesting, because, I mean, that it forced us to work on this problem in the context of real human motivations and real human interactions, and that's how we actually solve problems in real life. It's not from behind the walls of an ivory tower. It's not from purely economic or purely commercial incentives. Real world problems always involve people and they always involve politics. So I really liked that aspect of the game because it modeled those competing incentives from the individual level to the group level, and that made it very much more real. And I thought that was reflective of a lot of the dynamics that are really going on.

Ian Curtiss:
When you chose your seat randomly, I was not involved in that process. And you chose that seat of the game, I'm not going to lie, there was a little part of me that was like, yay, woo-hoo. It couldn't have been a better fit, which I was so happy to see. And so this is just the sort of thing that is so interesting about talking about concepts of agricultural security, industrial policy and so forth. It's this process of people say picking winners and losers, oftentimes. You incentivize one industry, it means you are passively hurting another industry because they don't get the same incentives and so forth. So in the game, the chip fab is potentially gaining all sorts of incentives to move to the state of Arizona, which just puts more value on the water, and therefore the farmers are more interested in selling water and so forth.
Like you said, we've seen this before in Ukraine and so forth. It's forgetting about supply chains, forgetting about the complexity of these systems. And if you don't have natural gas, you don't have ammonia and you don't have fertilizer. I think that's the sort of thing that we need to map out. So who owns that in the US government? Who owns this mapping process or this process of figuring this out? What are the risks? Who is that? Is it the Department of Agriculture?

Alicia Ellis:
of Well, I'm hoping it's going to be ASU, because I mean that's part of the idea behind this agriculture and national security project that I'm working on, is that yeah, nobody is really mapping that, but part of the problem is too, you are dealing with, like you said, a really complex system and you have so many people that are involved, but they can really only see maybe their piece of it and the few others that are directly connected. I don't know that somebody looking at the economic response, the list of sanctions, et cetera, after Russia's 2022 invasion of Ukraine was necessarily thinking about fertilizer. They probably don't even know how fertilizer is made. Why would they? That has nothing to do with their job. The farmer's going to understand all that, but they don't necessarily have the sort of big picture perspective of how those supply chains halfway across the world are going to impact what's happening here. They're going to see the impact.
So what you need is all those people in the same room, and that's remarkably difficult to do sometimes. I think that's another beauty of this, of war gaming as a method of learning because you can get all those people in the rooms, you can put all of those roles in the game and you can put them in a context where they're going to better understand the incentive structure and the roles and the relationships of other pieces and how they're connected. So that I think is going to be a really big part of this project that I'm working on is to actively involve producers and actively involve agribusiness and actively involve farmers and actively involve policymakers and actively involve academics because you just absolutely need everybody to even begin to start understanding the complexity of this kind of thing.

Ian Curtiss:
So who are the different actors in governments or industry that you're looking at to map this out? I assume, because it gets so domestic in focus, quickly, DOA, Department of agriculture is so domestically focused and so forth, and it's really about industrial policy for the agricultural sector and so forth. But it's not looking at security risks. So then you go global security, and so what are we looking at? Department of Defense that doesn't quite make sense in terms of watching agriculture prices and supply chains. They're not sourcing outside of rations for the army, they're not sourcing agriculture products in this way.

Alicia Ellis:
So you're getting at one of the big problems in contemporary security is that, adversaries have shifted from head on conventional warfare to hybrid or what one of my colleagues called Gray Zone tactics. And they're designed to get past conventional military dominance that the US has enjoyed for so long. So if you're talking about agriculture, economic warfare or cyber information and narrative warfare, all of these things are not simple responses. Most of them don't even traditionally fall under the purview of the Department of Defense, so who handles it? Especially when you're talking about agencies that don't typically think of it from a security perspective. So those hybrid threats are almost perfectly designed to not so much counter as slip past the way US systems are designed to respond to threats.
So again, that's part of the goal of the first project I'm doing with this agriculture national security project and you're helping me build it. The first thing we're doing is that war game. And it was actually funded by the Department of Defense, irregular Warfare Center because it is something that they're thinking about, but it's not so simple to respond to. I mean, the Department of Defense is traditionally an expeditionary force. So what I want to do with this, is get the USDA in the room. I want to get the Department of Homeland Security in the room. They do think about critical infrastructure and food systems are absolutely one of those. And so our water systems, which is part of the food system, et cetera. The FBI, they're starting to look at cyber attacks on agriculture. In the last year, agriculture has absolutely skyrocketed in terms of the number of cyber attacks and that space is only increasing exponentially as we move to increasingly autonomous vehicles and equipment in Ag.
So there's actually a whole bunch of different agencies that have an interest in this, but it's not clear who the lead is and how you would respond to a crisis. I think the key is, that everybody needs to be communicating. So part of the goal of this war game is one, thinking ahead and thinking imaginatively about what could happen and what a crisis might look like, but also breaking out of some of those silos, some of those communication silos and responsibility silos to get all the people in the room talking about this at once. And I'd really like to, to your point, involve the private sector as well. We have major agribusiness companies and seed and fertilizer and meat, et cetera that play not a secondary, but really a critical role in this. And they should absolutely be part of the conversation because nobody's going to understand the supply chain better.

Ian Curtiss:
I noticed I said DOA earlier, and as soon as it came out of my mouth, I was like, that is not right. USDA is the [inaudible 00:26:14].

Alicia Ellis:
I know what you meant. I translated for you.

Ian Curtiss:
I'm so glad that you mentioned private sector, because this is the classic issue, and we saw this already with TIPS Act and medical supplies issues during COVID, the lack of awareness and the realization of dependence on private sector. And what that implies is all the data and all the information, all the IEP is held by all these different entities, all these different organizations, and they don't want to share it because that's how they make money.

Alicia Ellis:
Sure. That's a good point. And that's absolutely true. You're actually making me think of the grain industry in particular, which is such a critical one. I mean, wheat, that's the famine food. Grain is so important to our diets all over the world. There absolutely is an incentive to hang onto that information, especially because the major grain traders are not just involved in distribution, but in the futures markets as well. You actually made me think of this, I read a book recently about the great grain robbery, is what they called it. It happened in the 1970s, and it was before the Soviet Union fell and they had had a bad year, I think drought killed something like a third of their harvest. And so they needed to come and secure grain contracts from the United States.
So they sent someone over. It was the head of their ministry. It was all handled through the government at the time. And they went individually to Cargill and I can't remember if Archer Daniels was one of them. I am not sure who the big four were at the time, mostly the same ones we have now. But they went to them individually and secured what was probably very exciting for each company, the biggest single contract in history. And it wasn't until afterward that they realized they had secured those large contracts with every single company, and it meant that they had now promised more than we could actually supply to meet both domestic demand and what they had just contracted to sell to the Soviet Union. So you can imagine what that does to prices, the great grain robbery is what they ultimately called it. But it didn't take very long, really a couple of weeks to see absolute chaos in the market from something like that. So it's absolutely something that could still happen, and it's the kind of thing that we should be thinking about.

Ian Curtiss:
That highlights also the fascinating intersection of security and economics was Ag was the one industry where we continued to do business with the Soviet Union, was we wanted their grain. The Ukrainian flag is a field of wheat with blue sky above it. This is how the world got so much of its grain and continue to do deals with them. And today it's microchips in China, arguably, right?

Alicia Ellis:
Yeah. Although you might be surprised how much of this is still adds. That is one of the few industries that was still able to do business with Russia after the invasion of Ukraine. And that is how they got a lot of dollars into their economy even still. Now, part of that was by necessity, right? I talked about the fertilizer problem. The immediate response was to exempt fertilizer from sanctions, and you can see the immediate necessity of doing so, but then you can also see that as a continued vulnerability that we haven't addressed. Anyway, I interrupted you.

Ian Curtiss:
No, no, that's great. Exactly. And I was just about to say today with the tariffs, it's soy, it's soybeans, all the soybean farmers across the United States selling soy around the world, and then South American farmers trying to sell soybeans to China and so forth. It's a huge issue, and we don't really know what's going to happen with these prices, with the economic impact for these communities. It has the potential for just creating massive volatility in. So economic volatility creates social volatility, which creates political outcomes. And that was the last thing I was going to say, is so much about this agricultural security concept is often that it creates dramatic political outcomes and political insecurity. In that, let's go back to the Dust Bowl. The whole issue of the Dust Bowl is all these farmers didn't have farms to work on, so then they all went to California or elsewhere to try to find jobs, and it just created massive cultural social shifts across the country.
And the whole country is reeling from this, the oakies grapes of wrath and so forth. And I think that's the other nuance and complexity of this is the true food insecurity outcomes are probably a ways down the road, but there's a lot of other pain points that would potentially hit prior to somebody not having enough food on their plate as a result of Russian invasion of Ukraine or whatever the next agricultural impact.

Alicia Ellis:
Yeah, actually, I'm glad you raised the soybeans. I wouldn't want to be a soybean farmer this year for sure. But you make a good point about the overall system. I mean, when you're talking about the economy at a global level where it's sort of militating toward increased efficiency, I mean, you sort of alluded to that earlier when you were talking about what we decide to produce and where, and then let's get something else somewhere where they can do that more efficiently, cheaper, et cetera. I mean, that's the idea behind free trade dairy. But take soybeans for instance. We plant soybeans, soybeans, and corn is what the majority of the Midwest plants now, that used to be wheat.
Now, as we've moved to soybeans and corn, a lot of the world's wheat is produced in Russia and Ukraine, low estimates put it at about a quarter of the world's wheat high estimates, somewhere around a third between those two countries alone. You think back to, for instance, the Arab Spring, it's pretty well established the linkage between that and grain prices, which were a result of, again, Russia losing a bunch of its harvest to drought. So they ban exports, and you have a lot of countries in the Middle East and North Africa that are 100% or close to it, import reliance on that. So is it a good idea for a third of the world's wheat to be produced in just one area?
I think as we sort of embarked on this quest for maximum efficiency, we forgot to think about the value of diversity and resilience in our supply chains. And agriculture is one of those areas, like I said, I don't think we've really thought hard enough about that yet, but it's no different than looking at, okay, 85% of the world's critical minerals are processed in China. Maybe that's not a good idea from a security lens.

Ian Curtiss:
I see our time is wrapping up, so I want to give you the opportunity to add one more comment or any closing thoughts. But I'll just say for anybody who's in the wintery cold of the year and listening to this, and they were wanting to eat some iceberg lettuce, if they listen to this in the wintertime and the end of the year, know that that iceberg lettuce almost certainly came from Arizona.

Alicia Ellis:
Yep. Yep. Thank a farmer in Yuma.

Ian Curtiss:
Yeah, that's right. That's right.

Alicia Ellis:
Well, thanks for having me, and I appreciate it. This was a great conversation.

Ian Curtiss:
Absolutely. Yeah. Thank you, Alicia. Really appreciate it.

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