What Does a Circular Economy Look like in Agriculture?

I recently shared a note on urban agriculture (https://bit.ly/2VMwRLN). Here I explore further the concept of circular economy in agriculture. 

A circular economy approach suggests that the industry can achieve greater sustainability by keeping more resources and materials in use for as long as possible. This can be achieved in a number of different ways, including increased product durability, reuse and recycling. For agriculture it means reduced food wastes and recycling of nutrients

And big food brands have an interest in this.

The management of waste and recycling is one of our most pressing environmental and social challenges. Agriculture, primary production and the food sectors are undergoing significant change due to shifts in domestic and global markets, as well as community expectation about what happens along the value chain and what happens to waste.

For current operators producing food through indoor/covered agriculture, where is new or additional investment going to yield a strategic advantage in an urban context?

Food is being wasted

Agriculture as a source of waste is starting to get attention - and this is not insignificant for the sector.

It is estimated that between 20-40% of farm produce is rejected or discarded prior to reaching the supermarket. On top of this, Australian households also waste an average of 200 kg per person of food per year (equating to 4 million tonnes). It is evident that there is a clear need to pivot towards a local and sustainable food system away from a more commoditised food system, if there are to be meaningful reductions in waste. 

It is a global problem and opportunity

The United Nations (UN) is forecasting a total of ten billion by 2050, with a requirement of 55% more food. Large challenges lie ahead for food production including water scarcity, land degradation, higher input costs and climate change.

The waste generated from agriculture and food production is difficult to quantify, but the figures are around one trillion tonnes per annum, and contribute to 13% of total global greenhouse gas (GHG) emissions.

Separating waste, re-purposing it and recycling it are not new concepts, and more recently the waste is being identified as a resource rather than a costly problem, and environmental polluter. By turning organic waste into a source of added value, farms can move towards a triple bottom line in operations and build in more resilience to their businesses.

Although circular economic fundamentals remain in their infancy it is now very much embedded into mainstream strategic thinking of forward looking businesses in the agricultural value chain.

With careful and imaginative future urban planning, emerging technology and global governmental commitment, agriculture can be remodelled to be regenerative by design and potentially bring on another green revolution. 

A circular economy model is the right approach

Applying the circular economy model to agriculture is an opportunity to create new value in agriculture. 

Government policy needs to be part of the approach of embedding a circular economy. While the challenge for broadacre agriculture is obvious, urban agriculture makes focused policy a real way to enable a circular economy.

For example, NSW Government has recently articulated the problems that state faces in relation to end of life materials as well as providing a policy response:  

• By 2040, waste generation will increase from over 21 million tonnes a year today to 31 million tonnes  
• Our landfills are expected to reach capacity in the next 10–15 years 
• Transport needs to be integrated into infrastructure planning 

For urban or per-urban production systems to work, the production system needs to be close to both waste inputs as well as consumer or export outlets. Effective policy in this area will spur investment in urban agriculture.

Developing urban agriculture models

Modern food production faces problems on many fronts. Growing populations demand increased output.

The challenges include boosting the productivity of regional and peri-urban food production systems, making it easier for innovators to bring their prototypes to market, and managing farm-to-table supply chains with greater accuracy. 

Besides putting food on local tables, streamlining food systems and making them more sustainable would place Australia in a good position to become an exported of urban agriculture outputs. 

If we look at food in particular, we have almost half of the world’s population directly north of us Australia is ideally located to play a key role in this area 

A business and investment opportunity

Developing indoor urban agriculture could be worth up to $395 billion globally by 2030, according to a Food Innovation Australia report (https://bit.ly/2RXLESw). 

This investment comes with opportunities through partnerships between engineers, technologists and primary producers. It also provides an off-take for major food suppliers.

Plans are already in place for developing high-tech agrifood precincts in Australia and globally precincts includes providing design and circular economy solutions for water and energy use. 

Creating new value through a circular economy built around urban agricultural production systems, that are attractive to the major investors in the food and agriculture sector, is critical in my view.

Work now needs to be done to get systems and prototypes up to test the various urban agriculture models.

Questions for Directors, Boards, Policy Makers and Investors

• What is the level of investment needed to ensure Australia has a fair chance of making a profitable and sustainable play into urban agriculture? Who should be making this?
• To what extent and what type of research is now needed to ensure commercial investment will be money worth spent?
• For current operators producing food through indoor/covered agriculture, where is new or additional investment going to yield a strategic advantage in an urban context?
• What are the best policies to ensure sustainable development goals are the circular economy are balanced by shareholder returns in the area of urban agriculture? What is the right balance between intensive urban agriculture versus a community-driven system? How can policies ensure the best outcomes from each approach so that most people are better off in the longer term?

Further Information 

To read the discussion paper on circular economy challenges and have your say (in NSW): https://s3.ap-southeast-2.amazonaws.com/hdp.au.prod.app.nswdpie-yoursay.files/7015/8630/3412/19p2036-cleaning-up-our-act-20yr-waste-strategy.pdf

A Nuffield Scholar View: https://nuffieldinternational.org/live/Report/AU/2018/steve-grist  

An engineering view: https://www.createdigital.org.au/vertical-farming-blockchain-circular-economy-farming-21st-century/ 

An organisation focused on Circular Economics and their angle on the agriculture sector: https://www.ellenmacarthurfoundation.org/our-work/activities/food/stories/regenerative-agriculture-how-it-works-on-the-ground 

"Decarbonising Agriculture" – an interesting webinar work viewing

About the Authour

Turlough Guerin is a senior leader in corporate environmental management, governance and sustainable development. He has program and project leadership experience in government, as well as the clean energy, communications technology and construction sectors. He is currently the Chair of Ag Institute of Australia and a board member of community organisations.

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Opinions are those of the author, photographs and images are courtesy of the AIA, Deposit Photos and Markus Spiske.