COP 28: Integrating market-linked incentives for a sustainable package of practises can help farmers adopt and adhere to climate-smart production systems
Global discussions on climate change have predominantly centred around reducing reliance on fossil fuels and promoting renewable energy sources. In the wake of growing environmental concerns and the ongoing Conference of the Parties (COP 28), it's time to pivot our collective focus towards one of the most crucial yet often overlooked sectors in climate change dialogues - agriculture.
Agriculture practises currently generate 19–29 percent of total greenhouse gas (GHG) emissions. Land-use changes relating to agriculture have a far more significant impact on carbon cycling. The disruption in rainfall patterns, increased frequency of extreme weather events, and rising temperatures adversely affect crop productivity, water availability, and overall agricultural systems, undermining the food security of the country.
Climate change has introduced a new and pressing dimension to the pre-existing challenges faced in agriculture. The need of the hour is to integrate agriculture into the larger climate action narrative. It's time we ask ourselves: how can we effectively shift our focus to agricultural sustainability for effective climate action? And how do we nurture and empower the most significant constituents of agriculture in developing countries to adapt and understand their role in climate resilience—smallholder farmers?
Why Smallholders?
Constituting over 85 percent of total farmers in our country, small and marginal farmers are the mainstay of the agricultural sector. In India, they manage 47.3 percent of the cropped area, contributing over 52 percent to cereal production, 55 percent to fruits, 70 percent to vegetable production, and 69 percent to milk production.
Despite their contribution to food security, these farmers face multiple challenges, such as limited access to finance, inefficient input use, soil fertility loss, water pollution, restricted market access, and disjointed supply chains. Smallholder farmers are particularly vulnerable to the impact of climate change due to their limited resources and capacity to adapt.
As the primary domestic agricultural producers, smallholder farmers must understand the effects of agricultural practises on climate. Their adoption of climate-resilient and regenerative agricultural practises will not only reduce its impact on climate change but also reduce the risk of crop loss due to adverse climatic conditions.
Integrating the market narrative for climate action in agriculture
Any initiative related to climate change must be linked to markets and has to be economically viable to be sustainable. It is imperative to integrate markets into the narrative of climate action in agriculture. Adopting climate-resilient and regenerative practises for smallholders will mean additional challenges: lower initial yields, higher investments, and a shift from age-old traditional practises. Till the market does not compensate them for this additional burden, any expectation around scaling up these practises would be completely muted.
We are experiencing increasing interest among a large segment of buyers to commit to sustainably grown produce. They are willing to support, nurture, and encourage these production systems, even at a premium. Initiatives from corporations like ITC, Cargil, ADM, and other end-user millers endeavour to substantially increase the procurement of such produce from farmers. We at Arya.ag address such forward-thinking agri-corporations and buyers who promote and are consciously patronising climate-resilient and regenerative practises as "Climate Champions."
We need to strengthen the relationship between these “Climate Champions” and pioneering, progressive farmers and farmer producer organisations (FPOs) through a platform that, on the one hand, assures the supply of sustainable produce and, on the other, sufficiently compensates the producers for their conscious efforts. Market players with similar objectives are essential for sustaining the farmers' interest in such production.
Integrating market-linked incentives for a sustainable package of practises can help farmers adopt and adhere to climate-smart production systems. This approach not only supports farmers' economic stability but also contributes to a more sustainable and resilient agricultural future. By creating more Climate Champions who are willing to pay a premium for climate-resilient products, we can encourage farmers in their transition to sustainable practises. It is not just about adopting sustainable practises; it's about making these practises profitable and desirable in the market.
It is also interesting to note the impact that such practises could have on the position that farmers and FPOs hold in the ecosystem. FPOs, due to their extensive reach within the farming community, could play a pivotal role in influencing their smallholder members to adopt climate-smart practises. They have the potential to differentiate themselves from the legacy players in the market. This unique identity holds great promise for irreversibly enhancing farmer incomes.
Creating and standardising sustainability frameworks for Agriculture
Reports suggest that over 29 percent of Tesla’s Q3 revenues for 2023 came from the sale of carbon credits. This is a significant contributor to the company’s profits. Imagine if farmers in India could generate and sell carbon credits by adopting climate-smart practises. While industries such as manufacturing and energy have established protocols for measuring their carbon footprints, agriculture lags far behind.
Establishing a standardised system for measuring and trading carbon credits in agriculture is crucial, especially in developing countries where agriculture forms a significant part of the economy. This system would incentivize farmers to adopt sustainable practises by allowing them to earn and trade carbon credits, creating a financial reward for environmentally friendly farming. Today, there are a wide range of technological solutions, including satellite imaging and remote sensing, that make monitoring and assurance of sustainable practises completely feasible.
These could address the unique challenges of agricultural carbon accounting, such as variability in soil carbon sequestration and the complex effects of farming practises on greenhouse gas emissions. Implementing such a protocol not only enhances global climate change mitigation efforts but also opens new economic opportunities for farmers in developing countries, encouraging investment in sustainable agricultural technologies and practises.
Catalysing actions through stakeholder collaboration
The transition to sustainable agricultural practises necessitates a collaborative effort involving a wide array of stakeholders. This includes governments, non-governmental organisations, the private sector, farmers, and, crucially, end consumers.
An essential component of this journey is increasing consumer awareness about the value of climate-smart agriculture. Educating consumers on the environmental and social benefits of sustainably produced food can create a demand-driven push towards sustainable practises. Customers who understand and appreciate the importance of climate-smart agriculture are more likely to support it through their purchasing choices. This market demand, in turn, can incentivize farmers to adopt sustainable methods and encourage the entire supply chain to align with these environmentally friendly practises.
As COP 28 progresses, we can ‘turn talk into action’ by integrating agriculture into the broader climate change agenda, empowering smallholder farmers, standardising carbon footprint measurement in agriculture, fostering collaborative stakeholder engagement, and creating market pull for sustainable practises to ensure a more sustainable and resilient future for global agriculture.
(Prasanna Rao, Co-founder and CEO of Arya.ag.)