Sustainable Production As New Direction

Globally, small and large agricultural enterprises have access to ample natural resources. However, these entities often need to pay more attention to the importance of sustainability in their operational cycles, particularly during the production phase of farming or plantation activities. Both small and large agricultural enterprises must prioritize sustainability during this phase. Sentadell Associates proposes a clearly defined pathway that underscores the critical role of sustainability in production as a fundamental framework for agribusiness.

What & Why?

Sustainable production is a multidimensional concept that considers not only environmental considerations but also social and economic factors. It involves the judicious use of materials, resources, and energy, focusing on reducing waste and minimizing pollution. The overarching objective is to meet present needs while safeguarding the ability of future generations to satisfy their own needs. The Science Based Targets Initiative (SBTi) has garnered pledges from over 1,500 corporations, including numerous agricultural entities, to curtail emissions. This attests to the global resolve to promote sustainability. Many of these commitments are publicly disclosed and can be tracked using the Global Reporting Initiative (GRI). Our research has shown that, as of 2022, more than 11,000 companies worldwide have reported sustainability data using the GRI standard.

The data provided demonstrates that sustainability reporting is more prevalent in regions such as Asia Pacific and Europe as compared to America and the Middle East. In the Asia Pacific region, there has been a remarkable surge in the number of companies engaging in sustainability reporting, increasing from approximately 50% to almost 90%. However, it is essential to note that this positive trend is observed primarily among well-established corporations, indicating their proficiency in technology and efficient resource management. This trend bears a direct and reciprocal impact on producers, particularly in the medium to large agricultural industry. It is worth mentioning that smaller farmholders within this sector may need a comprehensive understanding of the appropriate ways to contribute to sustainability.

Continuing on that logic, Initiating sustainable practices in agribusiness is influenced by various foundational factors. On a global scale, agribusiness encompasses a spectrum from small to large enterprises. Notably, family farms, classified as smallholder farmers, play a pivotal role, constituting around 70% of the world's agricultural land yet contributing less than 40% of the total agricultural output. Nevertheless, specific nations, such as Indonesia, have legal regulations that impose constraints on land ownership, affecting the agricultural landscape for their people.

Moreover, considering the substantial prevalence of agribusiness, especially smallholder farmers comprising 70%, there is a crucial necessity for the widespread adoption of sustainable practices. This is vital to address issues such as water wastage caused by ineffective irrigation systems, potentially leading to a global water crisis, food shortages, malnutrition, and social disparities. The focal point is that harnessing advanced technology, starting with broad awareness initiatives can convert smallholder farmers' adverse and inefficient consequences into valuable agricultural production. Consequently, this can contribute to what can be further labeled as sustainable production, wherein farmers and agribusinesses simultaneously play a positive role in impacting and contributing to society.

The importance of implementing sustainability practices in agribusiness becomes evident when considering concrete instances of economic and environmental drawbacks. For example, outdated and inadequate irrigation systems result in an annual economic loss of €35 billion in global agriculture. Additionally, unsustainable agribusiness practices contribute to the wastage of 42% of the world's total freshwater consumption. This, in turn, has interconnected adverse effects, including issues such as hunger, malnutrition, displacement, migration, and social disparities.

Bright Side

The starting point for achieving sustainability in agriculture is the readiness of critical operational participants, leading to the automatic implementation of sustainable practices. This readiness involves explicitly understanding how adopting technology can positively impact the effectiveness of the agricultural industry.

.The presented visual from Sentadell Associates' analysis for our clients in agriculture contrasts a relatively overlooked factor that can influence enhanced preparedness for sustainable practices. Consequently, the critical observation is that employing technology, regardless of its scale or sophistication, can elevate efficiency rates from a mere 20% output to an impressive 80%. This underscores the importance of embracing technology, including applications such as water management, resource optimization, production optimization, and integrating the Internet of Things and AI in precision agriculture. Therefore, Indirectly, the gradual integration of technology into agriculture has substantially impacted sustainability. However, it is essential to note that the current state cannot be considered complete.

But what is the real contribution after meeting every efficiency impacted by tech adoption in smallholder agribusiness for sustainability practices?

Our framework outlining sustainability practices within agricultural entities emphasizes the substantial impact of outcomes on society, well-being, the economy, labor fairness, and the climate/environment. Incorporating technology into agricultural operations is crucial in shaping sustainability practices throughout operational activities, contributing significantly in a technical context. Implementing actionable programs by smallholder farmers is highly feasible, especially considering their predominant presence on a global scale across most agricultural lands, not just by industrial-level agribusinesses.

A concrete instance of this particular strategy is apparent in a measure implemented by our proposed framework for agriculture clients in 2023. This involves supporting farmers through initiatives like school scholarships and fertilizer subsidies and transitioning to sustainable packaging materials for semi-finished resource harvest. These efforts contribute to different aspects of output sustainability, resulting in cost savings and a noticeable impact on the role of sustainability. It's important to emphasize that implementing the technology framework is the primary key.

In conclusion, sustainability in agriculture is a shared responsibility. Global commitments and technological advancements underscore the importance of addressing environmental and societal impacts. Empowering smallholder farmers through awareness and support is crucial. By combining technology with social and economic initiatives, agriculture can evolve into a beacon of sustainability, addressing key challenges for a resilient future.

"Technology is a tool, not a silver bullet. Only conscious choices towards sustainability can guide its impact." - Kofi Annan, former UN Secretary-General.

— Edited by Dody Milian, a Marketing & Public Relations associate at Sentadell Associates