SDGs: Carrot or Stick for Farmers & Farming?

When farmers hear the word ‘sustainability’ they shudder, expecting it to lead to new rules, new restrictions, new costs, and slow and cumbersome decision making.  On the other hand, food companies, perhaps recognizing the inevitable, have followed their customers into embracing sustainability. These strikingly divergent views reflect the complexities of applying the “Sustainable Development Goals” (SDG’s) for the agriculture sector.

Since 2015, all members of the United Nations (UN) have been working towards the 2030 Agenda for Sustainable Development. The Agenda, made up of 17 “Sustainable Development Goals” (SDGs), aim to eliminate poverty, improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve the environment.

The 17 SDGs are:

No poverty, Zero Hunger, Good Health & Well-being, Quality Education, Gender Equality, Clean Water & Sanitation, Affordable & Clean Energy, Decent Work & Economic Growth, Industry, Innovation & Infrastructure, Reducing Inequality, Sustainable Cities & Communities, Responsible Consumption & Production, Climate Action, Life Below Water. Life on Land, Peace, Justice & Strong Institutions, Partnerships for the Goals

What is sustainability, really?

 Fundamentally, “sustainability” is simply working within the limits of a system: recognizing the economic, social, and environmental impact of choices and actions. In practice, it is a process of continuous improvement. Informally known as profit, people and planet, leading business thinkers such as Harvard Business School’s Michael Porter have argued that the world’s leading corporations need to keep these three pillars in mind to sustain their own business long-term. Within the agriculture arena, the Food and Agriculture Organization (FAO), a the food organization within the United Nations, focusses on an approach that is holistic in nature, taking into account agricultural practices, natural resources, food waste, malnutrition, farmers’ livelihoods, policies and governance, etc. Recognizing the intricate web of our global food supply chain is the first step in cracking the code to sustainability in food production and to understanding the great challenges farming and agribusinesses face as they strive to achieve it.

Farmers, particularly those in intensive agriculture, have struggled with the SDG’s, and object to what they feel is disproportionate blame for greenhouse gases and pollution. This was aggravated by a 2006 FAO report (“Livestock’s Long Shadow) which mistakenly attributed 18% of all greenhouse gas emissions globally- more than all forms of transportation combined- to livestock production. Experts from the University of California at Davis pointed out the error, and the next FAO report corrected it to 14% of all human-induced emissions, in fact Prof. Frank Mitloehner has shown that 80% of all greenhouse gases (GHG) relate to fossil fuels, compared to 3% for Beef and 2% for Dairy. It is, however, hard to “un-ring the bell”, and agriculture is still seen by the average person as a major contributor.

The Stick – Sustainability as a Requirement

Sustainability has become a buzzword: from producers to processors to retailers, most companies now say that sustainability is their long-term goal, important to their future viability. So, what does sustainability look like for farming? How can farming, the world’s oldest, and arguably most important profession, achieve sustainability?

There are many new practices and technologies designed to improve efficiencies, lower costs, increase yields, improve crop and animal health and welfare, and more. Simple practices such as no-till farming and crop rotation are examples of producers aligning productivity with environmental concerns. The benefits can include some combination of increased yields, lower costs, increased profitability and/or greater resiliency, For example, crops planted using no-till perform better in drought conditions (due to the water-holding property of the soil), which is important in an era of increasingly volatile weather conditions. Unfortunately, many of the options that improve environmental metrics, such as technological tools, require a substantial initial investment, a significant barrier to entry. 

Other costs may be less obvious: retraining staff and restructuring operations to address the new SD goals costs time and money and can be disruptive. The long term benefits of zero waste may seem obvious, but can require new technology, software, or other technology. Early adopters must compete with companies who have not taken on the financial or practical costs of adopting new practices. New tools and systems may also require developing new trading relationships.

Many in food and agriculture fear that the sustainability goals can be used to push them out of business, by activists who are fundamentally anti-agribusiness. In Rob Paarlberg book called ‘Re-setting the Table’ he points out that organic isn’t the silver bullet to feed a growing population, and that veganism or vegetarianism aren’t going to save the planet either.

The challenge to getting buy-in to “sustainability” in agriculture is translating a global concept to practice on the farm level. The benefits of adopting new practices are not necessarily realized by the farmer, at least in the short to medium term. Identifying relevant incentives to good practice when the major benefits are likely to accrue to someone else in the chain is a challenge.

The old adage that in any project you can only have two of ‘fast, good or cheap’ can be applied to sustainability as well. “The Sustainability Triangle of Truth,” (D.Hunt, 2020) examines the conflicts inherent in balancing economic, environmental, and social sustainability in agriculture.

The Carrot – Incentivizing Sustainability

Subsidies and incentives can encourage the adoption of sustainable concepts by food producers. The European Union’s Green Deal has shaped its agriculture support systems to both support farmers productivity and provide sustainable governance, using a three-pronged approach of knowledge, research and innovation and, of course, technology. The focus of the knowledge, or educational component, is on improving farm practices and driving change, particularly in less developed areas of the EU. The research and innovation prong introduces novel ideas and concepts for addressing new challenges. Finally, the technology prong brings new tools for improving sustainability.

Carbon credit systems (“Cap and Trade”) are a market-oriented approach to sustainability based on creating an objective value for carbon trading. Caps on allowable emissions are established, and organizations can trade any unused allotments in the marketplace. This creates an incentive to reduce emissions. Currently the major ‘cap and trade’ system in the agriculture sector is largely found in NZ (in forestry and in the early stages for pastoral farming) but it is more challenging in agriculture than other industries, since identifying soil storage of emissions is neither easy or affordable. There are also concerns as to how actively farmers will try to reduce emissions. Finally, there are concerns that the profit margins in farm production are too low for farmers to maintain profitability.

In the U.S., the Biden administration announced a new proposal to pay farmers to sequester carbon in the soil and other means of negating the effects of climate change. The difference here is that, rather than tell farmers what they will receive for their efforts, they decide what the value is. In a reverse auction, farmers and producers would bid their own prices to sell offsets. This would create a private market for the credits to be sold, potentially negating some of the above concerns.

On the food processing side ‘sustainable practices’ are heavily advertised. Tyson Foods recently announced a partnership with the Environmental Defense Fund, an alliance designed to address land stewardship, reduce greenhouse gas emissions, improve water quality, and maximize farmer profitability.

Similarly, General Mills pledged to source its food from producers using regenerative agricultural practices and specifically to commit to agreements covering 1 million acres of farmland by 2030. While that is still a very small percentage of total U.S. farmland, the declaration from a Fortune-500 food corporation is likely to spur other food companies to make similar commitments.

Alltech, an animal nutrition company, identified nine of the seventeen SDGs where it felt that it could have the most impact. Under the slogan “Planet of Plenty” the firm is using partnerships and community initiatives to deliver on its commitment. What has been most impressive is the way the company has used the SDG metrics at every level of it communication, internally and externally, to inform decisions. A case study in how the SDGs can change a company’s strategic focus.

An increased emphasis on collaborative working can also be seen in the American Farm Bureau’s (AFB) recent proposal. The AFB, which represents farmers, ranchers and producers is now working with organizations such as the Nature Conservancy, the Environmental Defense Fund and the Food and Agriculture Climate Alliance to push the U.S. government to adopt policy changes around soil health, livestock production and food loss.

Finally, incentives to farmers to collect data would be of enormous benefit to sustainability initiatives. Providing a small payment for collecting data for a set number of years will generate data that will enable more and better understanding of the ag world. In a rare overlap, both engineers and marketers know that ‘you get what you measure’. For example, fifteen years ago Ireland built a beef genetics database that collected every farmers genetic database. Despite anxiety at the outset, the gains in genetics and productivity are now tangible. Similarly, the “Carbon Navigator Tool” helps farmers to reduce their emissions. Still another approach is a 'commodity plus' approach, where buyers would pay for the physical commodity and a separate fee for the production data that goes w/ the physical good.

The Example of Food Waste

COVID-19 and Brexit in the UK have made it very clear how fragile the global food supply chain truly is: empty shelves, food hoarding, producers dumping milk and eggs, processing plants working short-staffed or shutdown. It took months to find a new equilibrium, and even now with many restaurants closed, the food supply chain is still coping with significant disruption. Yet in the middle of all this, food waste remains the single biggest problem in the food supply chain: 800 million people face malnutrition and starvation globally while 1.3 billion tons of edible food is wasted every year. In the US in 2019 35% of food went unsold or uneaten. As noted in a previous blog, food waste also contributes to greenhouse gas (GHG) emissions; its carbon footprint is estimated at 3.3 billion tons of CO2e (carbon dioxide equivalents) of GHG each year.

In developed countries the issue is largely at the consumer and retail level. With food prices comparatively low relative to incomes, consumers can be pickier, and less concerned about waste. ReFED, a non-profit focused on developing sustainable food systems, works with consumers to understand date labels, proper food storage and how to use up ingredients. 200 food makers and retailers, including Danone, Kroger, and Walmart, announced a pledge to cut their food waste in half by 2030, sharing information through the Food Waste Atlas.

Technology to the Rescue

Venture capital funds have discovered the agtech sector, with another $4 billion expected this year, continuing the trend from recent years. Every sector of agriculture, from crops and dairies to fish farms and cattle operations is being affected by new technology. Previous blogs have looked at some of these, including sensors, 3D printing, robots, drones, artificial intelligence, blockchain, the Internet of things and even virtual and augmented reality. All of these can materially improve agricultural production.

In turn, however, connectivity becomes critical. Precision farming relies on internet connectivity and 4G (or, better, 5G) in rural communities is essential to support these new technologies, which in turn requires government support. Bringing technology to farmers requires comprehensive approach, including all the actors within the food chain: farmers, government, universities, private companies, even startups.  

Another challenge with technology adoption is the potential for 'timeline tension'. Technology investment may require substantial upfront investment in the form of new equipment and/or higher costs (including additional complexity and labor, and the benefits may not appear for several years. So, adopting new technologies may not be a rational or economic decision.

Still, the scope for technology as a change agent in agriculture is so broad that even very small companies in a small country can have a meaningful impact on any of the SDGs. David Scanlon of Enterprise Ireland created a list of Irish based agtech startups doing just that. I adapted the idea to include some global tech and startup leaders who provide the same functions.

Tech leaders and Start-Ups that target Sustainability & Development Goals

Poverty Eradication: WeFarm; DonationMatch; Nuru; Wagestream; Vaki

Zero Hunger: Indigo Drones; iFarm Agritech; MagGrow; Nuritas

Good Health & Well-Being: Cainthus, Impossible Foods; Zymergen; AgriWebb; Inscripta

Quality Education: JumpaGrade; ; LearnUpon; Allcancode; XAG Academy; Ducky

Gender Equality: DivorShe; GirlTank; Landit

Clean Water & Sanitation; Watsan Envirotech; UpEnergy

Affordable & Clean Energy; UrbanVolt; EnergyElephant; Hub Controls; Nexalus; Energyly

Decent Work and Economic Growth: PluAlto; Boundless; Ovamba

Industry, Innovation, and Infrastructure: Wia; Luna Systems; OKO; Plenty; Bowerey; Ynsect; AppHarvest; BrightFarms; AeroFarms; Labby Inc

Reduced Inequalities: AQMetrics; Seva Exchange; Social Light

Sustainable Cities and Communities: EVE; Moby Bikes; ZIPP Mobility; Parkpnp; AddJust; ZiggyTec; GoFar; Rooftop Republic; Provivi

Responsible Consumption & Production; Evocco; FoodCloud; SwiftComply; Sensibin; OneStepCloser; Eletrobio; Nasekomo; Atmonia; HexaFly; Novozymes; Pivot Bio

Climate Action; CFlood; D4H; Allforeco; Cervest.earth; Farmers Business Network;

Life below Water; XOCEAN; Subsea Micropiles; The Ocean Cleanup

Life on Land: Harpe Bioherbicides; Treemetrics; Apic.ai; Land Life Company; Ginkgo Bioworks

Peace, Justice, & Strong Institutions: DX Compliance; Vizlegal; Courtsdesk

Agriculture and farming can ‘do sustainability right’, which means both doing it well, and avoiding (or at least anticipating and mitigating unintended consequences). In an example from the clothing sector, consumers pushed retailers and brands to reduce slave/child labor in overseas manufacturing plants. This led to automation, which cut production costs but also increased turnaround time for new products, which in turn spawned 'fast fashion' of very inexpensive clothes worn a handful of times and then thrown out - which is much worse for the environment. More nefarious examples can also be found. For example, the oil and plastics industry responded to consumer demand for reducing and recycling waste by emphasizing recycling. Unfortunately, the realities of recycling of plastics are much more complex than acknowledged (and some “recycling initiatives” are in fact hoaxes). 

There is room for Agriculture to make a substantial contribution to reduce overall global emissions and aid in the fight against climate change. Improved land management practices can improve soil health and water retention, reducing the need for fertilizers and irrigation. Manure can be converted into compost or even energy through methane digesters. For example, Fiscalini Farms, a dairy farm in California, USA, operates methane digesters to recover energy from operations provide electricity to 300 nearby homes.

While sustainability and the UN SDGs don’t currently generate positive lines in the farming press, and farming doesn’t generally generate much positive coverage in mainstream media stories on the SDG’s, the changes agriculture can achieve are significant and meaningful ways to improve productivity and reduce waste, aligning the food chain towards a more sustainable future: sustainable business creating sustainable food production. 

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Thanks to Alexa Potocki, for the research and writing, which made this article possible, Kate Phillips Connolly for editing, Mary Shelman, David Hunt, Benoit Batard and Patrick Lee for comments and suggestions.