Scrutiny on agri’s GHG emissions and cost to society ratchets up

The sobering reality about food production and consumption habits is that we continue to have increasingly unhealthy populations and there is limited respite from the industry’s emissions.

Last week saw the release of three reports that dissected the food and agriculture value chain from the perspectives of land use, greenhouse gas emissions and the sector’s true cost to global GDP.

While the reports were published by unrelated entities and their timing was coincidental, the nature of their collective message made it seem as though they were presenting different parts of the same fact sheet.

In a nutshell, agriculture and food production systems continue to lag behind many other sectors with regards to enhancing efficiency and innovating ways to reduce emissions – and time is running out for the sector to become a positive contributor and not an impediment to the Paris climate agreement goal of limiting global warming to 1.5C.

The week kicked off with Monday’s UN Food and Agriculture Organization report, The State of Food and Agriculture, which found that “agrifood systems impose huge hidden costs on our health, the environment and society, equivalent to at least $10 trillion a year”, which is almost equal to 10 percent of global GDP.

The 154-country study made the case that more than 70 percent of these hidden costs are due to unhealthy diets driven by ultra-processed foods, fats and sugars, leading to obesity and non-communicable diseases.

Linked to this, of course, is the food-as-health vertical that has become so popular with venture capital and growth equity private market investors. Critically, these food products are invariably out of reach for the majority of consumers in low- and middle-income countries and even in high-income economies, where the portion of society that can afford to eat fresh or organic food for every meal remains rooted in the minority.

Given this reality, the vicious cycle of needing to eat enough calories on a limited budget, which then leads to further ill-health, has to be broken by detailed analysis of “agrifood systems’ true costs” by governments and the private sector, followed by “actions to mitigate these harms”, said the FAO.

This news was followed on Tuesday by McKinsey’s report, Striking the balance: Catalyzing a sustainable land use transition, which made the case that “without a step change in action to increase land-use efficiency, growing demand for food, fuel and natural capital may require additional land equivalent to the total cropland of Brazil by 2030”.

That’s equivalent to an additional 70 million to 80 million hectares, and the need could rise to 110 million hectares if humanity collectively fails to convert enough degraded land into cropland.

“With rapidly increasing competition for prime land and just six harvest cycles before 2030, organisations are running out of time to strike the balance and get their land use onto a sustainable footing,” warned McKinsey.

KPMG then capped off the week of sobering studies with its Net Zero Readiness Report, released Thursday, which examined steps taken by 24 countries and key economic sectors to reduce the greenhouse gas emissions that cause climate change.

For anyone hoping for good news at this point, look away now – the report found the impact of the shift to regenerative agriculture, for example, has not made a significant difference to overall volumes of emissions.

KPMG International global head of agribusiness, Ian Proudfoot, had this to say: “You can’t swap one cow for a lower-emissions cow. Agriculture has been found wanting on not necessarily having the answers as to how to start its journey to a lower emissions future.”

While KPMG’s report does highlight new diets for cattle that massively reduce their methane emissions and evolving relationships between farmers and buyers that are more partnership-based than purely transactional, as things stand, a material dialling back of the sector’s emissions remains out of reach.

So, what’s the upshot? There’s no easy way to put it – agricultural and food production systems remain anchored, for the most part, in an inefficient and high GHG emitting state. And time is running out to make the sector more sustainable before it is too late.