Profit or the environment? We need both!

Duncan Rawson, EFFP Partner

The agri-food industry is lost. Somehow over the last few decades we have lost our way. Fundamental to this loss is a disconnection between those who eat the food we produce, and those who actually produce it.

This disconnection has led to a lack of understanding. A lack of understanding from the public at large about how our food is grown, but also a lack of understanding from producers as to the very nature and concerns of the consumer. What keeps generation Y and Z awake at night is very different to what keeps the boomers and generation X awake at night.

Moreover, and this still and sadly remains a controversial view amongst many in our industry, we have lost our way because we have allowed ourselves to become overly reliant on farming techniques that are not sustainable. Methods and methodologies that damage the very organic infrastructure that we depend upon. And by ‘organic infrastructure’ I mean principally our soils.

We have also become lost through complexity. The supply chains that move our food from farm to the supermarket shelf are long and complex. It is hard to track what has come from where, what goes into what, to understand what is good for us or bad, how it been produced, etc. Worse is the plethora of audit schemes out there. I am not even sure I understand what the Red Tractor stands for, never mind all the other stamps that reside on our packaging. Food and drink supply chains are confusing and lack transparency.

Lastly, we are facing into significant societal challenges. We have a population that is both malnourished and obese. We are facing into a climate change storm with a leaky umbrella of knowledge and coordination as to what agricultures role is in this – both as cause of, but importantly mitigator of climate issues.

Supply chains of the future need to produce healthy and nutritious food that has been grown in an environmentally friendly and ethical way, while also dealing with the significant challenges of a growing population, climate change, and declining natural resources.

However, there is a light shining dimly that can help guide us. I believe we are sitting on the precipice of a technical and environmental revolution in agriculture. Marrying up regenerative farming practices with high-tech systems that embrace precision monitoring, application, data, etc., is incredibly exciting for those who are prepared to think the unthinkable and to do things differently.

And I am not just talking about farmers here. I am talking about all those involved in our agri-food supply chains; from input providers to the consumer, including, and arguably most importantly, food processors and manufacturers.

DOTS

We need to reconnect the dots. Supply chains can no longer be one directional. Supply chains can no longer simply be about commercial transactions with little regard for anything else. We need a multidirectional and multifaceted approach. We need supply chains that are inclusive, involving everyone from the consumer all the way back to those organisations who supply farmers with inputs and advice.

But there is another reason why joining up the dots is important. To make this journey we need resources. We need resources to influence and drive the change needed across supply chains. We need resources to put it bluntly, to pay for the changes required, and we need resources to help de-risk the changes we are asking farmers to make.

There is not enough resource on farm to achieve this – well that’s not always true – in some cases there is the resource, but not the acceptance that things need to change.  Governments are full of words and promises, but I can tell you now, there is not going to be anywhere near the money promised to subsidise farmers in the future. The NHS or farmers? It is not rocket science to work out where the governments priorities are going to be.

NGOs are great at raising issues up the agenda but are in a constant battle to raise the funds they need to practically influence change. Moreover, those organisations representing our industry are arguably fighting to protect what has been, rather than what is needed in the future.

To create the resources we need, we need profits. Lots of profits. This is not an easy conversation to have, particularly with those who are concerned about the environment, as it can be argued that our relentless pursuit of profits has led us to the situation we now find ourselves in. I’d agree with this. But without profits, we simply won’t have the resources needed to make the changes required. The key is to harness profits in the right way – as a force for good rather than a force of destruction.

The good news for the agri-food sector is that food businesses make profits. Some of them make big ones. Moreover, they have influence within the supply chain – they buy the output produced on farm. So, they have both the resource and influence to really make a difference – from consumer to farm.

They are the organisations that have the ability to join the dots.

PARTNERSHIPS

The importance of partnerships cannot be underestimated. And I don’t mean transactional partnerships, but real partnership that are full of trust and meaning. Partnerships that create value for everyone involved. Even today, these remain a rarity.

The majority of food businesses have set themselves challenging environmental and social targets to meet, holding themselves to public scrutiny, whether they want it or not. And have quickly realised that most of the issues reside not within their four walls, but back at farm. To that end, more and more companies are now putting some kind of farm programme in place.

Many, whilst full of good intentions, are little more than tick-box exercises. But good examples do exist. Examples that are focused on delivering value to the farmer as well as meeting the companies own goals.

These good examples have a number of attributes in common. They have a good understanding of agriculture and the need to adopt different approaches. Approaches that build the organic infrastructure required, rather than depleting it. Approaches that are practical. Approaches that are humble in origin and design.  Approaches that help farmers and incentivise change but without judgement. Approaches that take a long-term view. Approaches that take risks, but also help to de-risk the changes required.

Two such examples are the work that EFFP carried out with Nestlé and their dairy supply chain in the UK to develop a programme of activity that delivered tangible benefits in terms of the environment, but also in terms of managing risk and enhancing economic performance; and then the work that EFFP has been doing with Kellogg’s and their Origins programme. Work that we are incredibly proud to be part of.

The Origin’s programme has been running since 2014 and involves approximately 20 farmers who are at the cutting edge of exploring new practices and techniques. Kellogg’s doesn’t pay a premium for their wheat, rather it invests not inconsiderable resources into farm trials, trips (including trips overseas) and expert support to help the Origin’s farmers make better decision as they move towards a more sustainable method of farming.

I recognise there is an element of self-promotion here, but I really do believe that in the debate about the future of agricultural and discussions around more sustainable farming practices that we need food and drink companies to take part, as they have more ability to influence change than potentially anyone else involved. The key is how we guide them to provide the support that genuinely makes a difference for farmers, themselves, and society more broadly.

If you are interested in what we can offer, please don’t hesitate to get in touch: drawson@effp.com or 07834 337346.