Sustainability in the AgCommodity Business : Understanding the pull-and-push dynamics

“Within agricultural policies and societal perception of agriculture in the European Union, Paris Agreement, UN Sustainable Development Goals and the Cork 2.0 declaration are key sustainability pillars for future agricultural policies of the EU. A historical change also becomes visible in the fact that elements affecting sustainable development of agriculture increasingly become an integral part of the The Common Agricultural Policy (CAP).”

martijn buijsse

Martijn Buijsse
EISA Policy Adviser

Dear readers of Miller Magazine,

As a guest author, I would like to present some thoughts on the upcoming pull-and-push dynamics of sustainable development in the AgCommodity business in Europe. Agriculture in Europe is in a transition phase: Following the Second World War, resilience was required in terms of providing sufficient, affordable and safe food for everyone. Today, however, we are moving towards an environment in which – in the context of UN Sustainable Development Goals and the Paris Agreement (Climate Change) – this sufficient, affordable and safe food must be sustainably produced.

CHALLENGES IN EUROPEAN AGRICULTURE
This transition requires farmers to improve continuously, not only in terms of increasing ‘resource efficiency’, but also with regard to socially and environmentally relevant aspects such as biodiversity, soil and water management, and so on. If farmers are unable to provide continuous improvement, they stand to face problems in receiving their ‘licence to produce’ from society, and this can also lead to a situation in which regulations can make it too hard for farmers to actually farm in an economically viable way.

This shift from production to sustainable production also requires transparency, for example in the management processes which are applied by farmers and which relate to socially and environmentally important issues. Beyond the management processes as such, transparency is also needed with regard to the actual results achieved by farmers. Within EISA, we call this holistic approach ‘Integrated Farm Management’.

Innovative technologies play a crucial role in the sustainable development of agriculture. Within this development, we have seen significant successes in areas such as assuring animal health (and therefore public health) by extremely well-developed medicines in combination with good (preventative) management approaches by farmers, veterinarians and public authorities. We have equally seen decisive advances with regard to nutrient stabilisation, application, and use efficiency in arable farming, to mention just two examples. Of course, challenges remain: The question why so many great technologies in the field of precision agriculture are developed but fail to be adopted in mainstream agriculture is a significant one.

AN EVOLVING POLITICAL AND SOCIETAL LANDSCAPE
Within agricultural policies and societal perception of agriculture in the European Union, some clear trends are visible:
1. Paris Agreement, UN Sustainable Development Goals and the Cork 2.0 declaration are key sustainability pillars for future agricultural policies of the EU.
2. Recent discussions related to the use of Glyphosate in arable farming have shown a further polarisation of stakeholder groups within European agriculture. Farmer associations, environmental NGOs, representatives of consumer organisations and industry all seem to drift further apart from each other rather than starting to collaborate more intensely. At the same time, scientific evidence seems to be less and less accepted as a baseline for judgements.
3. A historical change also becomes visible in the fact that elements affecting sustainable development of agriculture increasingly become an integral part of The Common Agricultural Policy (CAP). This requires farmers to apply specific measures in order to be eligible for receiving CAP payments from Brussels.
4. While Europe is presently still importing 30% of its feed protein, reducing this often criticised deficiency is one important objective. According incentives therefore are increasingly rewarded by governments, and the cultivation of protein crops has shown quite some growth in Europe in recent years.

What does all that mean for the AgCommodity business?
We should be aware of the fact that the transition towards sustainable production requires, above all, the freedom of choice for farmers. To a certain degree, this is in contradiction to the past, when providing sufficient, affordable and safe food was – to a large extent – the result of an according regulatory framework. It is important to keep in mind that the concepts of ‘freedom for farmers’ and ‘regulations’ do not by definition go hand in hand. That is why moving forward remains quite a big challenge.
If farmers are confronted with a regulatory framework with limited choices, this will by definition have a negative impact on their ability to achieve the optimum results for the environmental and economic dimensions of sustainability. That is why EISA places much greater emphasis on ‘collective action approaches’. Based on knowledge sharing of farmer groups and other knowledge providers, farmers are enabled to continuously improve their farms’ sustainability performance. And ‘sustainability’ is nothing to be accomplished at a certain moment, but it is a journey that never ends.

WHAT ABOUT EU GRAIN POLICIES?
EU support for arable crops which used to be provided through a complex system of market measures was simplified in the last years. Nowadays EU farmers receive support as direct payments on the condition that they respect strict rules related to human and animal health and welfare, plant health and the environment. The support received is not linked to the quantities produced and thus is designed to provide EU farmers with a safety net against volatile market prices. The lion’s share (72%) of the current EU farm budget is dedicated to direct payments for European farmers. Since 2008, the different arable crops regimes – including grains – were integrated into the “Single Common Market Organisation” (CMO), and EU policy is limited to two the main areas intervention and trade measures.

Intervention: Buying-in of cereals and rice for public storage was introduced to protect farmers from low market prices. Today, it is only used in cases of real necessity, providing an authentic safety net for farmers.

Trade: About 20% of EU’s wheat crop is exported annually, while large quantities of oilseeds, animal feedstuffs and rice are imported.

It is difficult to forecast whether the abovementioned vision and current EU policies will have an impact on either intervention or trade. But the export position of grains is expected to remain at least on the current level.

CONCLUSION
For politicians as well as actors in the supply chain, it is important to understand the trends that are equally pulling at farmers and the supply chain. The European Initiative for Sustainable Development in Agriculture (EISA) therefore advocates that governments, the supply chain, and farmers all should speak with each other – and with a united voice – and that is why EISA and our members will be happy to enter into further debate and cooperation with all interested stakeholders.

We also suggest you to read our previous article titled "Ground of sustainable agriculture".

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