Europe is embarking on an ambitious journey to create a sustainable food system that meets the challenges of reducing greenhouse gas (GHG) emissions within its agricultural sector. A recent report by Rabobank sheds light on the significant role that cooperatives can play in this transformative era, highlighting the urgent need for a “whole farm” approach to decarbonization. This strategy focuses on involving the entire supply chain—from farmers to distributors—in a concerted effort to share costs, risks, and rewards, making effective emission reduction feasible and beneficial for all parties involved.
The Urgency of Agricultural GHG Emission Reduction
With the European Union (EU) setting the goal of achieving climate neutrality by 2050, the agri-food system, which accounts for a third of the EU’s GHG emissions, is under the microscope. Agriculture is pivotal in pursuing this goal since livestock and crop production contributes more than half of these emissions. Although livestock emissions saw a 21% decrease from 1990 to 2021, emissions from crop production rose by 10% in absolute terms, demonstrating the complexity and urgency of addressing this issue.
In response, the EU has placed agriculture at the heart of the Green Deal and introduced the Corporate Sustainability Reporting Directive (CSRD), which mandates agri-food companies to assess and report their GHG emissions and reduction targets ahead of 2025. This legislative backdrop underscores the imminent challenges and opportunities facing European agricultural cooperatives in the drive toward decarbonization.
The Central Role of Cooperatives
Cooperatives play an instrumental role in Europe’s agricultural landscape, aggregating products like sugar, wheat, and barley from farmers across the continent. They are uniquely positioned to facilitate the transition to lower emission practices due to their close relationships with both farmers and downstream companies. However, the path forward is fraught with challenges, including the commoditization of agricultural products and the slim profit margins that often prevent significant investment in decarbonization strategies.
Navigating the Transition Through Collaboration
The transition to a sustainable, low-emission crop sector requires a collaborative approach that includes policymakers, farmers, cooperatives, industry stakeholders, and financial institutions. The European food system, with its fragmented distribution of margins and emissions, is ripe for collaboration, particularly in reaching climate and sustainability targets. However, the transition requires a rethink of traditional approaches, moving from a single-crop focus to a holistic view that encompasses all crops in rotation, which, in turn, necessitates a level of cooperation across multiple value chains.
The Promise of Cross-Value Chain Collaborations
Currently, most efforts to reduce on-farm GHG emissions target specific crops, aligning with food companies’ product-centric sustainability goals. However, given the varied crop rotation practices of European farmers, a more comprehensive strategy that addresses GHG emissions across all crops could unlock greater benefits. Such cross-value chain collaborations not only foster sustainable supply chains but also help in meeting Scope 3 emission reduction targets. For farmers, these collaborations could mean a transition to regenerative farming techniques, opportunities to source premium crops, and a stake in the creation of a market for sustainable food products.
Toward a Holistic Approach
The creation of successful transition programs requires support across the supply chain, including indirect beneficiaries such as local governments. It necessitates a consensus among stakeholders on the equitable distribution of costs, risks, and benefits associated with the transition. While only a few cooperatives are currently engaged in such collaborations, the strategic position of European agricultural cooperatives in the value chain marks them as key facilitators in ensuring successful transitions within the food value chain.
The decarbonization of European grain, oilseed, and sugar cooperatives represents a pivotal step toward a sustainable future for the continent’s food system. By adopting a whole farm approach and fostering cross-value chain collaborations, these cooperatives can help drive a significant reduction in GHG emissions across the agricultural sector. The journey towards sustainability is challenging, but with the right strategies and collaborative efforts, European agricultural cooperatives can lead the way in creating a resilient, low-emission food system that benefits not only the environment but also the farmers, cooperatives, and consumers alike.