More than two billion photos were taken of dinner plates in 2020, at the advent of a global pandemic. Americans have always turned to their dinner tables when times get tough.
At this week’s World Economic Forum in Davos, several panels will focus on agriculture and its importance for food security and its role as a climate solution.
We believe a harmonized roadmap and investments in transformative agriculture can translate into measurable results. When it comes to solutions for a net zero economy, farmers need to be part of the equation. Currently, targeted pilots are underway and tangible results and measurable outcomes are being gathered to support climate-smart investments.
Each growing season and harvest is a chance to both meet the growing demand and reverse the course of climate change. The stakes have never been higher.
By 2050, we must produce as much food as we have in all of mankind’s history up until now to feed the growing population. For our farmers and ranchers, that means fewer than 30 harvests, 30 growing seasons, 30 chances.
In eight out of the last 10 harvest seasons, farmers and ranchers have faced extreme and episodic events: COVID-19, Russian’s invasion of Ukraine—a leading producer of the world’s wheat; and an ongoing drought in the U.S.. Together, these events have destabilized global food security and economics.
Right now, farmers are in the fields continuing to plant it forward for this season and beyond, facing incredible market pressure and constraints. Nature does not wait, spring does not wait, planting does not wait. Climate change poses a threat to food security and the agriculture sector stands at the ready.
The struggles of the last decade of harvests have exacerbated the need for immediate action. We’ve known for some time that there is a strong investment case for including climate-smart agriculture among a broader portfolio of carbon/net zero investments. We can reduce the amount of greenhouse gasses in the air and still have economic growth.
We believe climate-smart agriculture merits consideration as part of climate portfolios on par with renewable energy and sustainable forestry.
Investments in climate-smart agriculture can reduce greenhouse gasses and enhance the resiliency and adaptive capacity of food production. As more farmers transition to climate-smart practices and the U.S. recognizes the critical role agriculture plays in driving climate solutions and strengthening U.S. and global food systems, there will be significant opportunities to invest and help drive a climate-smart transition.
Climate investors are well aware of the agriculture sector’s contributions to global greenhouse gas emissions. These investors must also recognize that with 17% of land mass and over two million farmers, the agriculture sector is a necessary component of any long-range climate solutions. In the U.S., agriculture has the potential to be a carbon sink. Driving capital to farmers and ranchers to help them adopt climate smart practices can get us closer to net zero.
Producers in the agriculture sector are committed to sustainable practices and historically have been focused on stewardship and conservation. But they need additional investment to mobilize and accelerate the transition to more adaptive and climate-smart practices.
For example, farmers are adopting cover crops and need financing to change practices, invest in new equipment and bridge the period needed for improvements in soil productivity to take effect. New technologies are in motion for manure to be used as renewable energy and natural fertilizer.
Pilots are underway advancing crop irrigation techniques, fencing for rotational grazing and even fenceless sensors. Digital and drone technology is being created to help farmers monitor their crops. All of these technologies require investment to change practices and can increase risk on top of thin margins.
Building the market
In agriculture, we need similar structures used in the energy sector where investment includes a renewable energy credit and then stackable financial asset structures. These components are critical investments in a full suite of tools and the new technology needed for long term investment.
There is an emerging voluntary program for carbon credits. What is still missing at scale is investment beyond traditional debt. In 2019 and 2020, it was estimated that an average of $632 billion was directed to climate finance, of which only 2.2% ($14 billion) went to agriculture, forestry and fisheries.
New forms of ESG investments can be used and deployed such as climate or green bonds to provide blended capital to support investment beyond one harvest and to provide long term financing agreements for supply chains.
In addition, we need risk mitigation tools for farmers as new technology is being implemented. Geopolitical events have accentuated the role of agriculture in national security and may drive additional interest in the sector. Food exports in the future could be critical to the U.S. balance of trade, as the U.S. has 11% of global arable land but only 4% of the population. It is in our national interest to invest in agriculture for our own food security as well as for an export market that could improve global food security, not to mention the climate.
Farmers and ranchers adapt and are committed, but they can’t be taken for granted. The time is now to invest in our farmers and ranchers, as the eco-workforce of the future, with boots on the ground and the green ingenuity of nature-based solutions.
Investing in our harvest is the underpinning to a thriving economy. Honor our harvest and invest in our farmers.
Erin Fitzgerald is CEO of U.S. Farmers and Ranchers in Action and will be a panelist at the 2022 World Economic Forum in Davos.