Monday, April 22, 2024

Encouraging sustainability through incentives

Neal Wallace
Market incentives will emerge as the key driver of on-farm sustainability, according to a new Rabobank report.
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Global fast food chain McDonald’s and AgResearch have launched a two-year regenerative beef farming trial in the Hawke’s Bay looking at alternative grazing management to boost soil nutrients cycling.

Market incentives will emerge as the key driver of on-farm sustainability, according to a new Rabobank report.

Food and agribusiness companies will increasingly demand suppliers lower greenhouse gas emissions, but the report says market incentives will be the most effective way to achieve this.

“Rabobank believes that in most regions these initiatives are likely to be more effective drivers of action to lower greenhouse gas emissions in the beef supply chain than government regulations,” the report said.

“The voluntary goals set by food and agribusiness companies offer greater flexibility and clearer recognition for reducing emissions.

“A regulatory approach often encounters measurement and reporting problems.”

Global beef supply chains account for 6% of all emissions, of which half come from cattle production, but Rabobank says new and emerging technology, breeding, feeding and pasture management can reduce global emissions by more than 30%.

Global fast food chain McDonald’s and AgResearch have launched a two-year regenerative beef farming trial in the Hawke’s Bay looking at alternative grazing management to boost soil nutrients cycling.

But it is unclear whether those providing cattle from this system will be paid a premium.

AgResearch senior scientist and project advisor Dr Gerald Cosgrove says the system should enhance plant growth but potentially also lead to better soil structure, higher water retention capacity and increased carbon storage in the soil.

“The exploration of regenerative farming practices is a key player in McDonald’s progress towards our global Responsible Sourcing Goals,” McDonald’s New Zealand managing director Dave Howse said.

McDonald’s has announced plans to decarbonise all of its operations and become net-zero by 2050.

AgriHQ senior analyst Mel Croad says McDonald’s buys about 6500 tonnes of beef for use in NZ each year and a further 25,000-33,000t internationally, equivalent between 5% and 6% of our total production.

A report into regenerative agriculture released earlier this month from Beef + Lamb NZ and NZ Winegrowers, found the practice is becoming a significant international food trend.

This is evident by multinational corporations, with a combined turnover of $700 billion, General Mills, Danone, Pepsi, Nestlé and Unilever committing to the practice and asking questions about production systems used by their suppliers.

The research reveals consumers may be willing to pay more for regeneratively-produced food, especially if science can prove it tastes better, is better for people’s health and better for the environment.

B+LNZ chief executive Sam McIvor says the majority of NZ’s sheep and beef farming practices naturally align with the key pillars of regenerative production and there is an opportunity to embed those regenerative attributes into the NZ story.

SFF chief customer officer Dave Courtney says SFF missed a potential US retail contract to a local supplier because it could not validate regenerative agricultural practices, which the competitor could.

“It’s a conversation happening on the ground today,” Courtney said of regenerative agriculture.

Consumer surveys show 59% want their red meat to be produced under regenerative agricultural practices, for which they will pay a premium price.

A different survey of SFF suppliers showed 80% felt their practices qualified as regenerative and 77% have adopted, on average, 17 of the 24 definitions required to meet its regenerative standards.

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