It’s been a rocky year for food companies, agribusiness firms, ag lenders and farmers navigating the seismic shift in policies coming out of Washington when it comes to environmental policy, even as much of the farm economy is mired in a multiyear slump.
The Trump administration is rooting out all initiatives and programs that aimed to address climate change, and markets for agricultural carbon that could pay farmers enough to get them to change practices have failed to fully develop.
Still, many food companies are plowing ahead with trying to get farmers to help meet corporate goals for reducing the environmental footprint of their products. They’re doing it by addressing soil health and water concerns via practices that also happen to reduce greenhouse gas emissions and help farms adapt to changing weather patterns.
“Regenerative agriculture,” a term embraced by the Make America Healthy Again movement led by Health and Human Services Secretary Robert F. Kennedy Jr., still works as a description for what these companies want to do. Some in the sustainability space also are starting to use the term, “stewardship,” as in ways for farmers to best “steward” their land and water resources.
“Clearly the way we’re talking about these issues has shifted, and I think that’s OK,” Rod Snyder, a former agricultural adviser to the Environmental Protection Agency under President Joe Biden, said on the sidelines of this year’s Sustainable Agriculture Summit in Anaheim, California.
More than 900 people attended this year’s summit, a networking event for companies, industry consultants and farm and conversation groups, making it one of the best attended since the conferences launched in 2015. Agri-Pulse is the event’s media partner.
Rod Snyder (EPA photo)Soil health has “always been a more resonant term with farmers,” and “regenerative agriculture,” while lacking some definition has some appeal to the MAHA movement, Snyder said. “If that can win bipartisan support, then fine, that’s great. So, just don’t call it climate-smart. I think that’s technically off the table.”
Frank Mitloehner, a professor at the University of California, Davis, who runs the university’s Clarity and Leadership for Environmental Awareness and Research (Clear) Center, told the summit attendees that the term “stewardship” works better with farmers than “sustainable,” even if the practices are the same.
“In cities, they use this term. In the countryside, they use that term. Let's get over it and go to work, because that is the legacy of what we all should strive for, to become the most sustainable steward of what we do,” Mitloehner said.
Companies look to share costs, benefits of ag practices
Inducing farmers to adopt new practices such as cover crops in a tough economy remains the main challenge for companies, which are testing some new ideas.
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Nestlé Purina, a pet food company, and PepsiCo are developing a plan to procure rice that is grown with regenerative practices.
Both companies want rice with a lower environmental footprint, but they have different needs. A pet food company is OK with broken grains of rice, while the food company needs whole kernels. Quaker Oats and its Rice-A-Roni brand is a subsidiary of PepsiCo.
“They take one part of [the rice harvest] and we take a different part, and therefore we're able to actually work together, collaborate … and pay for our proportional portion of that grain,” said Jack Scott, vice president of sustainable sourcing for Nestlé Purina.
Jack Scott (LinkedIn photo)A third company, Houston-based Arva Intelligence, connects farmers with consumer packaged goods (CPG) companies such as Nestlé Purina and PepsiCo and provides measuring, monitoring and verification of environmental outcomes.
Nestlé Purina and PepsiCo haven’t announced details of their rice program yet, but the idea is to share both the cost of the payments and the value of the emission reductions.
“We're never going to be able to get to long-term goals by thinking that we can just go ahead and continue to create projects alone, by ourselves, and then moving it forward. That might work for portions of our supply and maybe like some of the near-term targets, but as we think about the long-term targets, it is going to become more and more challenging thinking that … we can do this without finding ways to partner with others," Scott said at a summit breakout session.
Nestlé Purina's parent company, Nestlé, committed to reducing greenhouse gas emissions by 50% by 2030. PepsiCo's 2030 goal is a 30% reduction in the forest, land and agriculture emissions in its supply chain.
Farm Credit institutions look to pilot 'Stewardship Fund'
Meanwhile, members of the Farm Credit System talked publicly for the first time at the summit about an initiative to help CPG companies, including those in the food industry, finance the increased usage of regenerative ag practices.
Several regional Farm Credit institutions that serve eight states, led by Omaha, Nebraska-based Farm Credit Services of America, are planning to pilot a “Stewardship Fund” that would provide funding to go with loans that would help growers finance equipment and cover other costs of implementing new practices.
Myriah Johnson (LinkedIn photo)CPG companies and other investors would put money into the fund. Producers in turn would apply for a “recoverable grant” from the fund that they could use, for example, as the down payment on a new piece of equipment. Farmers would eventually have to repay the grants, and that money would be available for new grants to other producers.
“This is a new source of capital, new source of dollars that's coming in and being paired with farm credit loans. So, we're bringing more dollars to the table for the farmer,” Myriah Johnson, vice president of corporate sustainability for FCS America, told Agri-Pulse.
The names of the CPG companies participating in the pilot project have not been released. The Farm Credit institutions are planning to survey farmers in February on the concept.
Carbon markets were supposed to provide the financial incentive for farmers to adopt regenerative practices, but they have had limited success.
Tom Thompson, who is associate dean of Virginia Tech’s College of Agriculture and Life Sciences and executive editor of the Global Agricultural Productivity Report, says that climate benefits of farming practices have been a tough sell with consumers anyway.
“If you look at public sentiment, climate change … doesn’t rank high on people’s’ concerns. I think it’s losing a lot of ground that it had.”
Still, Thompson thinks there will still be growing demand for “ecosystem services and ways to compensate farmers for that. And so, I think the idea of paying farmers for positive outcomes … will grow. But ultimately, it’s the consumer that we have to convince, and I think we can.”
