How can food manufacturers incentivise sustainability and boost growth?
Speaking at the Sustainable Food Summit in Amsterdam last week, senior purchasing manager at Barilla, Cesare Ronchi, said:“We realised that [it's] during the production of the raw material – which for us is mostly durum wheat – that we have the highest environmental impact. So we decided to consider our ecological footprint, carbon footprint and water footprint there.”
The company, which manufactures of over 1000 products including pasta, cereal-based bakery products and pasta sauces, partnered with two organisations: Horta, a spin-off of the Catholic University of the Sacred Heart which conducts R&D in sustainable agriculture and Life Cycle Engineering, an independent consultancy firm, and found that by increasing crop efficiency, not only did it boost yields, it improved its environmental footprint.
A win-win situation
In collaboration with these two partners, Barilla drew up a handbook for sustainable wheat cultivation for its producers, with guiding principles on issues such as optimal crop rotation, reducing tillage and fertiliser use. Data on weather patterns, collected from Barilla’s weather stations, and soil conditions are available online for farmers at Granduro.net.
For Ronchi, sustainability must have a financial incentive propelling it if it is to last. “The first important aspect for the farmers is the net income – nothing is sustainable in the short or medium term if it doesn’t give an economic benefit to the farmer. So what we showed is that making treatments at the proper time and if needed they had an improvement of the net income through cost reduction and improvement of quality,” he said. “And industry is ready to pay more for good quality so it was a win-win situation for them and us.”
While farmers are not paid specifically for using Barilla’s system Ronchi said they receive a premium for the better quality wheat and benefit from having higher yields and lower input costs through a more efficient use of fertilisers.
“The main impact is on direct cost but also on the carbon footprint. By improving the crop efficiency we have a win-win
situation for the farmers, the planet, the environment and eventually good for us.”
In 2013 Barilla produced around 90,000 tons of durum wheat while in 2015 this increasing to around 140,000 tonnes durum. CO2 emissions for wheat produced in accordance with Barilla’s Sustainable farming handbook remained lower (0.46 t CO2 eq compared to 0.52 for common cropping systems).
Boosting farmers income with bonuses
Another company incentivising sustainability with an in-house scheme is Dutch dairy company FrieslandCampina.
Since 2015 the company, which ranks number six in the world in terms of revenue, has it directly linked domestic farmers’ performance to their income through a system of financial bonuses through its programme Foqus Planet.
Sustainable business manager at FrieslandCampina Taco Kingma said: “For every kilo of milk we get, every farmer puts money into a fund and from that fund money is paid to those who have good scores on Foqus Planet. So it really pays off to increase
sustainability on a farm.”
There are six indicators for sustainable development, such as energy consumption, health and longevity of cows and care for the landscape, and each one has different levels of adherence to measure performance. Improving the health of cows means they live longer which reduces the total CO2 impact of the farm.
“Excellent farmers – versus farmers who don’t do anything – can generate an additional €10,000 a year. An average farmer income in Holland [is] €30,000 a year with average milk prices at the moment and all our farmers are family-based businesses with around 80 or 90 cows. So it really helps the family income if they put the effort into creating sustainable farming.”
Beyond carbon emissions, these practices ensure the sector's longevity by making it an attractive workplace for young dairy farmers. “[We] need to give young dairy farmers perspective for the future to maintain agricultural production,” said Kingma
But there are many ways to switch to sustainable farming and each decision throws up its own dilemmas. In the dairy sector switching to outdoor grazing is seen as a sustainable practice but it means that manure cannot be collected, composted and used as fertiliser. “There is also a discretion and you have to find the balance there. Sometimes the dilemma is more in beliefs than real situations.”
