We know that for quite a while now, the status quo has been to prioritize productivity over health. We see that in employee working hours and their mental health, but also in the yield of agriculture and the well-being of the environment on the lands. Over the recent years, sustainable agricultural practices have been gaining momentum, but now it could be a great area of investment.
Food systems encompass an entire range of actors in the “production, aggregation, processing, distribution, consumption and disposal of food products that originate from agriculture, forestry or fisheries, as well as the broader economic, societal and natural environments in which they are embedded”, according to the Food and Agriculture Organization (FAO). Food systems are critical in the effort of ending poverty, promoting sustainable agriculture, and mitigating the effects of climate change.
It’s great that plant-based and cultivated foods have seen a general interest from the public increase of 29% in the past two years. But it doesn’t really tackle the issue from the bud, does it?
According to the 2020 Living Planet Report from the World Wildlife Fund (WWF) the use of land for agriculture systems has resulted in “70 percent of global biodiversity loss and half of all tree cover loss”. The same report estimates that in the decade of the 2000’s, 80 percent of deforestation in undeveloped lands was due to conversion for agricultural uses.
Both the public and private sector have been focusing on yields and productivity of the lands rather than the overall sustainability of those practices, and it has come at a high price. Soil has been overworked so much that it is no-longer fertile, which in consequence leads to deforestation in land in order to use new soil. Need for more crops leads to overuse of chemicals such as synthetic pesticides and fertilizers therefore polluting air, water and lands.
“If it costs so much, shouldn’t governments or companies promote sustainable practices?” Yes, but currently the agricultural policies set in place don’t consider the human and natural costs, actually undervaluing the true costs of food. According to Joy Kim, Lead for Green Fiscal Policy at the United Nations Environment Programme (UNEP),: “Financial support for agricultural producers comes to almost $540 billion a year, or around 15 percent of the total value of agricultural production. More than half is provided as price incentives, while the rest is in the form of fiscal subsidies. Our climate emergency constitutes a ‘code red’ for humanity and our agricultural methods are making it worse. Change needs to happen.”
Few incentives and regulations have been successful in encouraging sustainable practices and mitigating the costs. Appropriate investments would efficiently balance the interests and benefits of all the actors and stakeholders as well as sustainability goals and agricultural growth. Meanwhile, ideal regulations coherent with these investments would lead to a chain of growth for structural and economic development, expanding linkages, markets and exportations.
It sounds easier said than done, and some people might even think, “if it’s so complicated, why don’t we just pull the plug on support for agricultural producers?” According to Kim, ending the financial support in the form of price incentives by 2030 would result in greenhouse gas emissions falling exponentially, but crop production, farming and employment would spiral down dangerously, putting all of lives in danger. If, on the contrary, we end fiscal subsidies, we would also cut GHG emissions and aid in recovering nature and land, but food prices for consumers would likely rise.
The European Union (EU) has a good portfolio of examples of investing in sustainable agricultural systems. They have approached it by focusing on investments and innovation in small-scale farming in rural areas, especially in developing countries. By investing in these small-scale farms they strive for the reduction of poverty, leading to more education, which results in economic growth. The EU has also supported host nations’ initiatives and encouraged the private sectors to invest in research and development projects that find solutions that balance productivity and sustainability, striving for long-term impacts. Investing in technologies and new practices that raise income while treating the ecosystems in a livable manner can lead to more access in farmers’ access to assets, loans, capital, and fostering local, regional and global partnerships for sustainable development.
A more down-to-earth example is found in the Foreign Direct Investment of the Netherlands. The Netherlands has constantly promoted the crossover between food production and agriculture. According to Maarten Schans, agrifood specialist at the Netherlands Foreign Investment Agency, the Dutch approach is innovation.
“Innovation, in our opinion, requires working together in multidisciplinary projects – the Dutch approach. This requires experts in their field to be open to listening to and collaborating with experts in other areas and it requires the presence of strong clusters in technologies such as digitisation, robotics, life sciences, and so on. We are a geographically small country but with strong clusters in technological areas that matter to agriculture and food. Dutch greenhouses are the latest in high-tech that could only be developed through collaboration between growers and experts in the field of plant physiology, lighting, ICT, robotics, water treatment and energy and climate management,” he says.”
All in all, investment directly or indirectly in sustainable agriculture systems would benefit global economies and investors. It’s the one industry that is indispensable to human life, it has no expiration date. The importance of ethical farming, along with holistic approaches in policies, needs to be sustained and put in the same tier as the importance of return on investment.
References:
https://www.unep.org/news-and-stories/story/why-agricultural-support-must-be-reformed-work-nature
https://ec.europa.eu/eu-external-investment-plan/home_en
https://cleantechnica.com/2020/08/31/plant-based-foods-rise-sharply-in-popularity/
https://www.worldwildlife.org/publications/living-planet-report-2020
https://investmentmonitor.ai/retail/the-state-of-play-fdi-in-the-netherlands
