Cautious optimism was the consensus from delegates at AIC’s Agribusiness conference on 17th November, who felt that the agri supply sector is in a good position to deliver ‘greener’ economic growth. However, concerns remain around funding to support greater innovation and whether the legislative environment will encourage farmers and supply-chain businesses to invest in the right initiatives, at the right time, to meet Net Zero targets by 2050.
AIC Chief Executive Robert Sheasby reflected on the need for the Government to value the opportunities for agri-food businesses to benefit from new trade deals, and to work more closely with farmers and agri-supply businesses on new and revised legislation, to avoid unnecessary shocks to trade.
With the Agribusiness conference taking place just four days after 197 countries agreed to urgently accelerate action on climate change at COP26, Mr Sheasby said the questions now turn to ‘who will pay?’.
He said, “Some of the increased costs from being ‘greener’ can be shared across and absorbed by the supply chain, and some offset by efficiencies, but not all. While driving productivity and supporting farmers with advice will help us transition towards a bio-diverse Net Zero food production system.”
Conference chair Sybil Ruscoe put audience questions to Farming Minister Victoria Prentis MP, who stressed a desire to help the agri-food industry embed sustainability through three pillars; ‘food production, carbon capture, and biodiversity’, and to avoid so–called ‘greenwashing’.
And, while funding for farmers couldn’t be guaranteed under future governments, she highlighted the new farming investments fund which provides grants for new equipment to improve efficiency and reduce environmental impact, and the opportunities that gene editing technology could offer in improved crop resilience and nutrient value.
Plymouth MP and Shadow Secretary of State for Environment, Food and Rural Affairs, Luke Pollard said he remained cautiously optimistic about the future of British Farming, but expressed his concern that not every minister backs British farming in a meaningful or genuine way.
He also challenged the benefit of recent Australia and New Zealand trade deals to UK farmers and warned of the danger of increased food imports, produced to lower standards, which effectively ‘off-shore’ the carbon footprint of our food. He pushed the Farming Minister to publish the details of the ELM scheme soon, to give farmers clarity on decisions they are making now, that may have significant financial repercussions in a few years’ time.
However, Professor Sir Dieter Helm challenged the assumption that we need to switch to producing more food or food/feed ingredients domestically to lower carbon emissions. Instead, he said, “We need to impose the carbon price at the border. It means a change in the structure of trade to reflect not just the transport costs, but the relative prices of the carbon intensity of the inputs that produce the products that go into the global food supply chain.”
Re-thinking the supply chain for a zero-carbon world will require companies to carry out a proper carbon audit of the full supply chain to their agribusiness and think about what comes in the door of the factory as well as goes out.
“Once you start asking those questions, you open up a huge number of issues which you will have to address if you want to present yourself as net carbon. But you also open up big opportunities,” said Sir Dieter.
Oliver McEnryre, Barclays National Agricultural Strategy Director, discussed the financial and business implications of the change in subsidy structures, saying, “I think those reductions in the basic payment scheme income are really going to begin to focus the industry on future direction and the next five to 10 years.”
He believes that we’ll see more investment in technology to drive efficiency and help produce the same or more, for a smaller carbon footprint, along with a focus on management and increased use of benchmarking.
Dr David Telford, Head of Agrifood at KTN, reminded delegates what while the focus is on the technology we’ll develop, we must not lose sight of the farmer and how these technologies will be adopted.
Collaboration is also key, with Dr Telford giving an example of how KTN brought together 15 organisations to accelerate the development of insect protein for animal feed in the UK, with a collaborative funding bid worth £9.8m, that will hopefully deliver significant savings in carbon emissions.
Robert Jappie, Partner at Ince, specialising in life science and cannabis regulation in the UK discussed the potential opportunities and risks of investing in hemp for the legal cannabis industry, a new challenger crop that could also drive growth in the farming sector.
Mr Jappie explained that while the global market for legal cannabis products is increasing, the UK will struggle to capitalise on this unless the government allows British farmers to utilise the bud and the flower of the plant, where higher returns can be made.
Morrisons’ Head of Agriculture, Fisheries and Sustainable Sourcing, Sophie Throup, highlighted the huge challenge for supermarkets trying to address sustainability issues, where over 100,000 raw ingredients might be going into 12,000 products on the shelves, each with their own story, ingredients, and sourced from around 2,500 different suppliers.
Morrison’s has made a commitment to reach net zero as a collective within its directly sourced agricultural supply chain by 2030, with initiatives aimed at reducing emissions, reducing costs, and providing training, funding research and improving communications. “We recognise that this is hugely challenging, but we’re also very keen to make sure we properly do our part to help the farmers and suppliers get there,” said Mrs Throup. “10 years is not far away. It’s on our watch. It’s within our timescales to do something about it.”
On closing the conference, Angela Booth, AIC Chairman, reiterated that the agri-supply industry needs to understand the future of UK legislation which will affect farming and agri-supply businesses, saying, “We want it based on science and we want a strong, practical regulatory framework.”