The arguments for agricultural sustainability are loud and pressing. Business is beginning to respond, although the precise way forward remains unclear
The arguments for agricultural sustainability are loud and pressing. Business is beginning to respond, although the precise way forward remains unclearEvery January, global business chiefs jet to Switzerland. The annual meeting at the World Economic Forum in Davos is their chance to chinwag and schmooze. It’s also their opportunity to put the world to rights.
This year was no exception. Fighting for its place alongside global concerns such as climate change and endemic poverty came a new contender: agriculture.
A heavyweight coalition of 17 multinational food and drinks companies took to the podium to call for a major change in direction for the world’s farming (in a paper titled A New Vision for Agriculture).
The companies are ambitious. Working across all sectors, the coalition partners hope to leverage more investment for agriculture, promote environmental best practice, develop new and existing markets and improve access to affordable and nutritious food.
It’s no small task. But then the challenges facing the world’s agricultural sector are not small either.
Hugh Grant is chief executive of US agricultural biotechnology firm Monsanto. As he puts it: “Agriculture faces the challenges that the world faces over the next 30 or 40 years.”
The top challenge is food security. At present, nearly one in six people on the planet lacks adequate food and nutrition. As the population expands that proportion is set to increase.
By 2050, the world will have an extra two billion mouths to feed. Over the same period, demand for agricultural products is expected to double.
The food price crisis of 2008 provides signs of what could be around the corner. About 40 million people have been pushed into hunger by food inflation since then, according to estimates by the UN Food and Agriculture Organisation (FAO).
The threat of a new price rise is re-emerging. The FAO’s benchmark food price index hit record levels in December 2010. Global sugar prices, for instance, increased 6.7% in a mere four weeks.
In the face of such pressures, business as usual isn’t an option for global agriculture. Short of cutting down more rainforests, there just is not enough land in the right regions to turn over to agriculture.
Land availability is not the only problem. Existing agricultural land is in danger of deteriorating. Water scarcity, climate change and economic volatility present combined threats to farm productivity.
Farmers are not operating in isolation. As population and prosperity increase, pressure on basic commodities is set to rise too. Experts talk of demand hikes of 30% for fresh water and 50% for energy.
So the agricultural industry finds itself in a bind. On the one hand, it needs to produce more food. On the other, it must cut its use of essential resources.
Tim Lang is professor of food policy at City University, London. He spells out the scale of the solution required, saying: “The 21st century is going to have to produce a new diet for people, more sustainably, and in a way that feeds more people more equitably using less land.”
Lang is far from the only commentator to advise that a wholesale revolution is required. A recent high profile report by the UK government says “piecemeal” changes will not suffice.
Nothing less than a “redesign of the whole food system to bring sustainability to the fore” is required, according to the Global Food and Farming Futures report from the Department for Business, Innovation and Skills.
Making a start
The agricultural and food industries are increasingly aware of the need to act.
Of course, for some companies, responsible agriculture is nothing new. The likes of Cadbury, Marks & Spencer and Unilever boast long track records.
What’s different now is that the sector as a whole is buying in. Wal-Mart, PepsiCo, Coca-Cola, Cargill and Nestlé are just a few of the giants in the food and drinks industry to have come out with big commitments.
“Just in the last six months, we are picking up on a huge amount of interest and engagement on sustainability,” says Toby Quantrill, head of public policy at the Fairtrade Foundation.
The drivers are changing too. In the past, the motivation for conserving the environment or caring for small farmers was largely philanthropic. Now, it’s about the economic bottom line.
Corporate responsibility is taking a back seat, argues Quantrill. He says: “There is a switch to businesses engaging because of the realisation that supply chains are increasingly threatened by the issues of sustainability.”
While long-term security of supply is a major concern, agricultural companies are also learning of the economic benefits that sustainable farming practices can bring.
Reducing soil loss, cutting back excessive nutrient use and minimising pesticides all feed into efficiencies as well as environmental benefits, according to Rob Hedberg, director of sustainable research at the US-based National Institute of Food and Agriculture.
“That [production efficiency] is where we are finding that there’s common ground between the interests of sustainability and the interests of the producers,” he says.
Interest doesn’t necessarily translate into practice. But the agricultural sector’s head is above the parapet. Previously these issues were discussed “behind closed doors”, Quantrill says. Now the discussion is out in the open. That bodes well.
Time for debate
But the case for sustainable agriculture is far from won. Up for debate are a string of issues, conceptual, commercial and practical.
The first revolves around definitions and drivers. If security of supply is the goal, that could lead to larger and more technology-reliant farms. The socio-environmental aspects of broader interpretations of sustainable agriculture could, theoretically, be threatened as a result.
The economic arguments also remain inconclusive. Producers might see costs increase (at least initially) rather than reduce. Higher productivity is not a certainty either – as in the case of organic versus non-organic cotton.
The cost to the buyer (or end consumer) could increase. The premium for certified crops is the obvious example. For the big commodity producers, meanwhile, recouping costs or realising a premium on the open market is an intractable conundrum.
The question of who bares incremental costs is an issue of ongoing uncertainty, argues Simon Winter, senior vice-president for development at the agricultural non-profit group TechnoServe.
“Does it get borne by the big traders, or the small farmers, or the final consumers, or is it somehow spread across?” he asks. No one yet, it seems, has the answer.
All of which explains why the World Economic Forum’s New Vision is calling for global and regional leadership dialogues to determine the way forward.
Not all are waiting for an official signpost. Early experiments in sustainable farming abound. The Foresight Report points to 40 case studies in Africa alone. Many are led by private-sector players.
One early lesson to have emerged is that sustainable agriculture is no single-solution game. The right answers depend on a host of factors, from geography to soil type.
A mixture of approaches is probably the most likely outcome, says Michelle Lapinski, director of corporate practices at US environmental organisation The Nature Conservancy.
“If [companies] want to continue to feed the world, they are going to need to find solutions that come from greater efficiency, better cultural practices or new technology,” she says.
That will take time. Changing farm practices is a big part of the issue. But shifting agriculture onto a sustainable footing at the global level is larger still. It will require no less than an overhaul in public policy, market and trade systems, and consumer behaviour.
Sabrina Vigilante, director of markets and sustainable value chains at environmental group Rainforest Alliance, says: “It’s changing the whole culture and economy that we’re talking about.”
Scale is also required. The majority of sustainable agriculture initiatives focus on individual commodities in specific regions. They need to expand, quickly.
Take fairly traded goods. In the UK (one of the largest markets), Fairtrade certified coffee garners 20% of the total roast and ground market. That’s a huge improvement on 10 years ago. But it’s a long way short of feeding two billion extra mouths.
Challenges facing farmers from climate change
- Producing food sustainably for more people, with fewer resources (particularly fossil fuels) and less impact on the environment.
- Functioning as part of a global food system and dealing with climate-induced market volatility.
- Reducing greenhouse gas emissions and taking adequate measures to protect the environment.
- Building the resilience of your business to cope with extreme weather events.
- Demonstrating that farming is part of the climate change solution.
- Acting now to avoid future regulation (eg Campaign for the Farmed Environment).
- Making optimum use of your land and resources – whether for food production, energy generation or provision of ecosystem services.
Hungry mouths to feed
The overall number of hungry people stood at 925 million in 2010, down from just over 1 billion in 2009, according to the Food and Agriculture Organsation. The FAO's Global Hunger Index indicates that levels of hunger have decreased by nearly 25% since 1990, although the UN agency still describes global hunger as “serious”. South Asia and sub-Saharan Africa are the worst affected regions of the world.
Source: Global Hunger Index, October 2010