News Sustainability
'Cooperatives hold the key to greening agriculture'
For the individual farmer it is an enormous challenge to reduce greenhouse gas emissions. If the European Union wants to achieve its goal of being climate neutral by 2050, we cannot ignore the agri-food complex, according to Rabobank. Cooperatives can play a key role in greening the entire agricultural chain, the bank said.
Current initiatives to green agriculture are mainly focused on one crop and the subsequent chain. Research by the bank shows that the brewers are leading the way. This is easily explained, according to Rabobank researchers. Relatively many brewers have committed to the SBTi (a system of, among others, the UN and WWF to make climate goals measurable for companies) and the market consists of a relatively small number of major players. In addition, malting barley is only a small part of the price for a bottle of beer that consumers pay, unlike bread or pasta, for example, where the cost of wheat accounts for a much larger part of the price. Beer buyers are also less sensitive to price increases, according to Rabobank.
Total farm
The focus on one crop or product group does not suit European agriculture. A European arable farmer quickly grows three to five different crops, including for crop rotation. If we want to work on sustainability, this must be done across the agricultural business. Investing in sustainability does not quickly pay off for the farmer. Many products that farmers produce are ultimately seen by consumers as commodities that are interchangeable. This makes it difficult for farmers to ask higher prices. This is further reinforced by the market power that suppliers, processors and retailers have compared to the highly fragmented primary producers. Farmers have the thinnest profit margin within the chain and those narrow margins limit opportunities for sustainability.
Agricultural cooperatives can play an important role in sustainability. In contrast to the individual farmer, cooperatives have a strategic position in the chain. They can play an important role in distributing the costs of the agricultural transition, and the risks and premiums among all stakeholders. According to Rabobank, only a small number of cooperatives are now taking up this challenge.
Jurphaas Lugtenburg
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