Efficiency is not the same as sustainability: where the E of ESG in agriculture is lacking


Editor’s Note: Ben Palen, Director of Sustainability Consulting Ag Management Partnersis a fifth generation farmer with diverse experience in many facets of agriculture in North America, Africa and the Middle East.

While the overall notion of sustainability in the agricultural context has been around for several years, it has only recently come into vogue. Everyone is on board, and it seems like every facet of agriculture is claiming to be sustainable with their practices, products, or services that will lead their users to the promised land.

Can all these people be right? Or are they all off base with their efforts?

If one takes the basic premise that sustainability means not depleting the resources that are used in the production of a certain item, then agriculture has innate challenges. Overall, agriculture is based on the inconvenient truth of using limited resources to produce food. Arguably, many of the sustainability claims are based on smoke and mirrors because they don’t address this fundamental metric. For example, how sustainable is it to use non-renewable water resources in parts of South America to grow crops that are then shipped to destinations thousands of miles away?

The industry is replete with sustainability claims ranging from huge multinational corporations to small market-driven agricultural producers. At the larger end of the scale, where companies increasingly want to appeal to investors focused on ESG (environment, social and governance), this situation has drawn attention the attention of the United States Securities and Exchange Commission (SEC), and similar regulatory bodies in Europe, as they deal with allegations of greenwashing.

There are generally a few key ways to measure so-called sustainability, or lack thereof, in agriculture: water use, carbon emissions, harmful activities and inputs – think of product use chemicals or soil disturbance – and biodiversity. But given the wide diversity of the industry which has many crop types, soil types, topographies, climates and varying availability of certain inputs, there is no single approach to measuring, quantifying or labeling whether these things are durable or not. .

Additionally, some practices are assumed to be inherently more sustainable than others. Organic farming is a clear example: I know of an organic farm in Illinois whose carbon footprint is three times that of neighboring farms using no-till and other progressive practices.

Why a 15% reduction in water consumption is not sustainable

Consider, for example, an almond grower in California. It is well known that California agriculture faces water issues. Suppose an almond farmer reduces his water consumption by 15-20%. Based on various “sustainability measures” that are in place today, the producer can expect to be labeled as “sustainable” using a third-party “audit”.

What has actually happened is an improvement in efficiency. The fundamental question of using a depleting resource to grow a crop has not been addressed. At some point in the process of thinking about this topic, some sort of materiality standard might be helpful. This would be similar, for example, to what is considered material for disclosure to investors and regulators in the context of financial statements. But, again, each producer is different in what we can call their “resource profile”. Suppose a producer has enough water for 50 years of use at current rates; another producer is 25 years old. And suppose each producer uses similar efficiency measures. Is Producer A sustainable, but Producer B not? This is where the problem lies.

Could a market-driven approach be more effective?

In the San Luis Valley, a high-altitude region of Colorado, potatoes and barley are the main crops. When the valley was originally developed for irrigation decades ago, canals brought water from the nearby Rio Grande River to irrigate fields using gravity flow. Center pivot irrigation has become the main means of irrigation in recent times, and most of the water is drawn from irrigation wells drilled into an aquifer.

There have been significant drops in aquifer and river levels in recent years. Various proposals have been considered to address the issue of sustainable water use before severe measures, such as the closure of wells, are put in place. (The Colorado State Water Engineer has the legal authority to shut down wells).

The proposal currently on the water district regulator’s table is market driven and focused on sustainable use. The way it works is that most of the plots of land have decades-old ownership stakes in canal companies that had drawn water from the Rio Grande for years. Each part represents X acre-feet of water, X varying from year to year depending on the snow cover. Generally, there are not enough acre-feet of water for most parcels to be self-sufficient based on the shares they hold. The Water District’s proposed bylaw states that water pumped from an irrigation well must match, on a 1:1 basis, the amount of water associated with the canal shares for the particular parcel of farmland. In other words, the use is intended to match the water flow in the river. Balance is synonymous with sustainability. This stabilizes the level of the aquifer and leaves enough water in the river to satisfy downstream users and to help replenish the aquifer.

The likely outcome of this approach is that some land will come from irrigated production, and the water rights associated with that land will be available on the open market to be leased or sold to others. The value of these rights may vary from year to year depending on the flow of the river. There will also be greater use of technological tools, such as soil moisture sensors, so users can make informed decisions about how much and when to need crop water.

Another example of the Texas Panhandle is a water budgeting system intended to help extend the life of the Ogallala Aquifer in the region. Unlike the situation in Colorado, replenishment of water drawn from irrigation wells in Texas is unlikely except in years when above-normal rainfall over a wide area can cause water levels to rise slightly.

The local water district allocates a certain amount of water – usually in acre-feet – for use by farmers. Meters are used to track usage, and any farmer who exceeds his allowance each year must pay a significant sum of money, essentially making over-pumping financially unwise. Unlike the San Luis Valley, there is no mechanism in place, or proposed, to allow trading of water rights. Instead, the focus is on extending the life of the aquifer. The water district is very transparent about this by checking the static water levels of wells in the area every year and then providing that data to the public.

In the Texas example, it would be fair to say that, strictly speaking, the approach is not sustainable. There will come a time, perhaps 30 to 50 years from now, when it will probably become uneconomical and environmentally unwise to pump more water for irrigated agriculture in parts of the region. Ultimately, the approach is a mix of efficiency improvements and some measure of sustainability. Farmers and other third parties can use the data to make decisions about the use of the aquifer. These decisions include less water-intensive crops, partial irrigation – the area receives enough rainfall to allow crops to grow at profitable levels most years – and the use of agtech tools to accurately determine usage. and water requirements per field.

Both approaches reflect the reality of many agricultural scenarios where some measure of sustainability cannot be achieved without linking the changed practices to the underlying resource, whether water or other inputs, such as fertilizer.

And what about the use of nitrogen?

Generally speaking, the production of most nitrogen fertilizers relies on the use of finite resources and a manufacturing process that emits approximately three tonnes of carbon for every tonne of fertilizer manufactured. By using precision farming techniques, a farmer can reduce nitrogen use and achieve the same or better yields than they had before. The result is that the life of the underlying resource is extended along with other ecosystem benefits from using less nitrogen, such as less algal bloom. Again, this is a mix of efficiency and sustainability, but there is a benchmark – in this case, historical ratios of nitrogen use per unit of crop production – that can provide guidance to investors, regulators and consumers.

Efficiency is not true sustainability

In short, being more efficient in the use of resources, even if it is a step in the right direction, does not solve the heart of the problem. The honest discussion about sustainability should focus on whether it’s appropriate to grow certain crops in certain places and which crops we need to maintain life in relation to the cultures we As because we can afford to ship them around the world.

While the agri-tech industry is developing some solutions, such as crop varieties that can grow with much less water and substitutes for synthetic fertilizers, most are not yet commercially proven and way to go is still precarious.

Instead of pushing loosely substantiated sustainability claims that could mislead investors, consumers and regulators, discussions should be framed around responsible practices, with references made to resource use benchmarks that can demonstrate more just good intentions. Not only could bad policy slow the necessary transformation of the food system, it could also prevent conversations about the embarrassing reality of global agriculture and food availability in the future.


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