Rewarding farmers for regenerative agriculture is critical for de-carbonising the food sector

The food sector is one of the biggest contributors to the climate and nature crises. The way we grow, distribute, consume and dispose of food is responsible for one third of total greenhouse gas emissions annually

Food systems are the biggest contributor to galloping biodiversity loss, opens new tab, and account for 70% of freshwater withdrawals.

 

With half of food system emissions , opens new tabdown to agricultural production and land-use change in corporate value chains, food brands have an outsized role in food system transformation.

 

 “Institutional investors are pushing companies in the land and agriculture sector to adopt more regenerative agricultural practices”

 

Institutional investors such as Federated Hermes are pushing companies in the land and agriculture sector to adopt more regenerative agricultural practices as part of their net zero commitments, guided by the Science Based Targets initiative, which last year issued its guidance, opens new tab for companies in the sector.

 

While lacking in scientific definition, regenerative agriculture is an approach that reduces the use of water and chemicals, prevents land degradation and deforestation, and restores and enhances soil, water, biodiversity and carbon on and around farms.

 

It includes practices such as low or no tillage, use of precision fertilisers, control of soil erosion, planting trees on farms and use of biochar fertilisers.

 

According to Future Fit Food and Agriculture, opens new tab, a recent report from the World Business Council for Sustainable Development, the Food and Land Use Coalition (FOLU) and We Mean Business (WMB), such practices could halve the global food system’s greenhouse gas (GHG) emissions by 2030 and reduce negative impacts of farming on plants, wildlife and freshwater.

 

However, the report highlights a major barrier: responsibility for delivering regenerative agriculture often rests with poorly paid farmers, who face added costs, coupled with a risk of short-term loss in yield, at a time when climate change is making their efforts to eke a living from the land increasingly precarious.

 

For example, mitigating only 30% of agricultural emissions for a large-scale beef farm in Brazil could cost up to 17% of revenues, enough to trigger insolvency. The impact on smallholder farmers in developing countries is even more prohibitive.