Communicating Sustainability Goals to Farmers
May 10, 2018
In the arena of providing humanitarian assistance to recipients in developing countries, professionals often discuss the complications of getting relief, either physical goods or training, delivered ‘that last mile’, which means getting it in the hands of the hungry people who need it, who often live in remote areas with no paved roads. It appears that a similar discussion needs to occur in the new field of agribusiness companies encouraging farmers to adopt sustainable agricultural practices to satisfy the interests of the final consumers of their products.
A survey of farmers on these issues prepared by Farm Journal Media, in partnership with Field to Market, was released at Farm Journal’s inaugural Trust in Food symposium held in Chicago in late January. That report found that 66 percent of the farmers who responded to the survey had not seen specific sustainability goals from food companies, and more than half had no idea how soon they might need to change their operation to respond to consumer pressures on have access to sustainably produced food products.
Over the last several years, a number of large food processing and retail companies have adopted sustainability goals in order to demonstrate their responsiveness to consumer concerns. In December 2017, the firm Winston Eco-Strategies released a study that looked at the sustainability efforts of the world’s largest 200 companies, as reported under the Fortune 500 listing for 2017. Since 2012, the share of those companies reporting specific sustainability targets to the public rose from 155 to 188, a 21 percent increase. That study also found that the number of science-based sustainability targets, focusing on issues like carbon intensity or carbon footprint, had increased among those companies, even though a lot of the goals incorporate numerical targets that may be difficult to measure.
In a letter to CEO’s in January 2018, the Chairman and CEO of Black Rock, Larry Fink, asked them to engage in conversations with their shareholders about the long-term value of their companies, including the exercise of leadership on environmental, social and governance matters. Since Black Rock is the world’s largest asset manager, a lot of folks paid attention to the Fink letter.
Clearly, trying to figure out how to get farmers to adopt sustainable agricultural practices is now a major concern of companies in the agri-food space. The Field to Market survey asked about how farmers would describe the appropriate relationship between food manufacturers and retailers and the decisions farmers make about their farming operation. Sixty-four percent responded that companies should engage farmers in achieving shared sustainable outcomes, but that farmers should retain the freedom to choose those sustainable practices which best fit into their operation.
As with nearly all decisions in agriculture, farm operators made it clear in this survey they need a financial incentive of some sort to change their practices--a significant majority, 88 percent, ranked receiving a price premium for their products highly among the options offered, while cost-sharing and technical assistance were deemed to be less desirable incentives.
In order to engender sustainability efforts that are designed to bridge that ‘last mile’ to farmers, it is important for these companies to focus on developing their communication strategies on these matters. The vast majority of U.S. crop farmers sell their products to intermediaries such as local elevators and member-owned cooperatives. On the other hand, nearly all hog and poultry farmers raise their animals under contractual relationship with integrated firms in their sector.
Consequently, Tyson Foods, an integrated meat packer and retailing company, will be able to work directly with its contracted farmers to meet its goals, such as increasing sustainable agricultural practices on 2 million acres by 2020 and reducing its greenhouse gas emissions by 30 percent by 2030. Some of the latter effort will focus on their processing operations, but Tyson has already established systems at six of its production locations to capture biogas from animal manure and utilize that biogas in boilers to heat the farm facilities, allowing them to reduce use of natural gas. Tyson has also partnered with the World Resources Institute to help develop their sustainability goals and monitor progress made toward meeting them.
In order to succeed in this area, agri-food companies utilizing basic grains and oilseeds as main production inputs will have to develop relationships with organizations who work at the grassroot level with farmers. For example, Kellogg Company, manufacturer of breakfast cereals and many other grain-based products, reached an agreement in July 2016 with the Environmental Defense Fund (EDF) and United Suppliers (now Winfield United), an agricultural input company, to encourage farmers to adopt practices making more efficient use of fertilizer, reducing nitrogen runoff while maintaining high yields. This effort was initially focused on farmers in Nebraska, where Kellogg sources much of its grain.