At Triodos Bank, we think this must change. In our new report, "Towards ecologically and socially resilient food and agriculture systems", we argue for a transition in order to arrive at a situation where healthy and delicious food is produced within the boundaries of our planet. We must return to a system that produces food in harmony with nature, rather than working against it as is currently often the case. What’s more, the sector should pay farmers a fair price for their work.
Riella Hollander, director of food and agriculture at Triodos Investment Management, has devoted her time to sustainable agriculture for many years and is one of the main authors of the recent report. We spoke to her about the need for a transition in global agriculture.
What is wrong with the current way of producing and consuming?
For decades now, the main goal of our food systems has been to produce as much food as possible at the lowest price. But the negative consequences of this on our ecosystems, including soils, air, water and biodiversity, have been ignored. The same goes for the impact of current eating habits on human health and the impact of globalised food markets on the distribution of wealth.
The limits have now been reached. Fertile soils and biodiversity are rapidly declining, the number of people suffering from obesity exceeds the still high number of people suffering from hunger, and power concentrations deny many smallholder farmers a fair income.
Consider for instance the impact of our meat consumption on the climate and the impact of highly processed foods on our health. Another example of negative impact is the fact that, primarily in developing countries, around 500 million smallholder farmers and their families often live in poverty while they provide us with the coffee and chocolate that we enjoy so much.
This is a trend that has been going on for years. Why does Triodos Bank want to put this on the agenda right now?
Well, since we were founded about 40 years ago, sustainable food and agriculture has been an important theme for us. We have always invested in projects with a positive impact. However, limits have clearly been reached now and the urgency is increasing rapidly.
We see the need for a completely new system as humanity is endangering the very ecosystems we depend on for the provision of our food. Take for instance climate change. We only have about a decade left to take the necessary steps to limit global warming to a maximum of 1.5 degrees Celsius. Also, approximately half of global arable land is severely degraded due to the heavy use of synthetic inputs in intensive agriculture. This forms a serious threat for the growing world population.
Recently, the United Nations published an alarming report on biodiversity. Plant and animal species are declining so rapidly due to human activity that human life is threatened as a result. An estimated one million species of plants and animals run the risk of becoming extinct in the coming decades.
At the same time, the world population will grow to an estimated 10 billion people in 2050 – and they must have access to tasty and nutritious food. Our focus should not only be on quantity, but also on quality and diversity to ensure healthy diets. If we continue on the current path, we will not succeed without irreparably affecting the world around us and violating human health and the conditions for solidarity.
What change do you have in mind?
It comes down to a radical change in the way we produce, trade and consume our food. It is no longer sufficient to slowly improve the current system; a systemic change is needed. We believe that everyone should contribute to a food system in which ecosystems, health and inclusive prosperity are in balance. These are the ingredients for a resilient future food system.
Agricultural methods that support both ecosystems and people are available. Agriculture should not only be focused on producing large amounts of cheap food. It should also focus on safeguarding our planet’s resources and food quality and diversity. This means that food should be produced sustainably and consumed locally as much as possible.
Food waste should be reduced to a minimum and we must switch to a diet that consists for the most part of fresh, plant-based products. We are not saying that everyone should become a vegetarian, but there is a need to eat less meat in Western economies, not only for people’s health but also to create the space for a switch to sustainable agriculture. Of course, we understand that this is a painful conclusion for many livestock farmers and meat processors, so they should be supported in their transition to future-proof business models.
Smallholder farmers in emerging economies should be supported in their access to land, seeds, capital, education, knowledge and infrastructure. Farmers in Western countries should be encouraged and facilitated to move away from intensive agriculture, which negatively impacts ecosystems, towards regenerative forms of agriculture. Power concentrations in the production chain must be broken, leading to fair pay throughout the entire food value chain and everywhere in the world.
Do you have an example of a project that contributes to this transition?
We support many organic farmers throughout the world and one that comes to mind is Urmatt. This company has grown to become Thailand’s largest producer of organic rice since the 1990’s, working with 1300 affiliated farmers. Not only is the rice produced without pesticides, Urmatt also pays its affiliated farmers a fair price. They constantly look for opportunities to add more value locally by producing products such as rice crackers and other premium rice products, which makes local farmers less vulnerable to changes in climate and price fluctuations.
Closer to home, vegetable box business Riverford was founded in 1987, and since then, the company has grown to more than 650 people, delivering vegetables to 50,000 homes a week. With employee ownership, 74% of the company has moved into an Employee Trust, benefiting all employees equally.
Will we not pay much more for our groceries in the supermarket in the future?
I’m convinced we currently pay too little. In the Western world we used to spend a much higher proportion of our income on food than we currently do. The current price of food in the shops isn’t realistic for the long term as it does not take into account the damage to ecosystems, diet-related diseases and unfair wages. How is it possible that a hamburger is cheaper than a salad?
In our view, these costs should be included in the price of food which will also result in lower taxes and healthcare costs, as damage to nature and health no longer needs to be corrected after the damage is done– it can be prevented. By charging the true price for our food, we will all be encouraged to make more conscious choices in our eating habits.
Whose responsibility is this?
Everybody’s. It is up to us all to realise the necessary changes. Governments, businesses, including banks, and science have a responsibility to boost this transition; consumers should be enabled and encouraged to make more conscious choices about food. We believe a collaborative effort is needed.
Future policies should facilitate farmers to adopt regenerative forms of agriculture. For instance, more subsidies should be given to farmers that apply the organic principles, thereby incentivising farmers to actively regenerate their soils, work on carbon sequestration, and water retention as well as maintaining biodiversity. Farmers should be rewarded for the important role they have for society at large.
In the end, is it not the consumer that makes the decision to buy organic or not?
That is true. By choosing organically and locally produced food consumers can make a strong statement and basically vote with their wallet every single day. We already see very positive trends in this respect, certainly in Northern European countries. Also, meat consumption is already on a decline in Europe. But for consumers to make the right choice, they need clear and transparent information about the nutritional content, the origins and overall impact of the food they eat. They need to know the true price.
What should the banking sector do?
Triodos Bank feels a responsibility to contribute. The organically managed farms that Triodos Bank and Triodos Investment Management financed in 2018 produced the equivalent of 32 million meals in 2018, or enough food to provide a sustainable diet for approximately 29,000 people. So that really has an impact. Also, we aim to create more awareness among our customers. We know that customers expect us to let our voice be heard on this topic.
But we need all financial institutions to play a significant role by innovating their investment criteria, pricing models, investment horizons and their reporting. Their criteria and investment decisions should encourage long-term strategies that focus on resilient future food systems. They should support sustainable innovation both by mature businesses and early-stage companies.
We believe that money can be a force of good. In agriculture, banks should only invest in initiatives that have a positive impact on people and planet. Perhaps intensive farms are the stranded assets of the future, but with regenerative agriculture we can avoid that. The bottom line is that we should no longer focus on profit maximisation only, but also on what our food system is all about: providing nutritious food to all, now and in the future.
Read the report
The full vision paper ‘Towards ecologically and socially resilient food and agriculture systems’ is available to download now.