This is the main conclusion of Triodos Bank in its vision document Towards ecologically and socially resilient food and agriculture systems. Triodos Bank wrote this vision document because the current agriculture system exceeds planetary boundaries. It depletes soils, contributes to climate change through relatively high greenhouse gas emissions, causes a decrease in biodiversity, contributes to malnutrition and supports inequality due to power concentration.
Back to the drawing board
"The current agricultural system is not sustainable and has reached its limits" says Riella Hollander, Director Food and Agriculture at Triodos Investment Management. “We must bring the use of ecosystems, our eating habits and increasingly globalised food markets in balance. We should strive to produce healthy food for all, while respecting the limits of our planet and paying farmers fairly. That means we need to rethink the way we produce and process food, as well as how we trade, store, transport, sell and consume food.”
Working with nature
The main goals of the transition that Triodos Bank advocates are for agriculture to work with nature rather than against it. At the same time, a balanced and resilient food system should promote healthy diets and deliver fair pay for farmers.
The principles of organic agriculture benefit the health of people, soils and ecosystems and should be leading principles for the transition. To be successful, will require a simultaneous reduction of waste streams and a change of eating habits. A move towards consumption of local food where possible is required. And consumers need to move from a large portion of animal-based proteins to more plant-based proteins. Ultimately, diets should consist of 80 percent plant-based and 20 percent animal-based ingredients. A reduction of livestock is therefore unavoidable.
Small farmers in developing countries should receive access to land and seeds, capital, education and infrastructure. Farmers in developed countries should be enabled to move towards sustainable farming methods. Power concentrations in the supply chain leading to inequality must be broken.
True pricing is a necessary element of the transition. The current price of food isn’t realistic for the long term as it does not take account of damage to ecosystems, diet related diseases and unfair wages.
Food prices must reflect the value we place on fertile land and biodiversity, landscapes, culture and fair-trade practices. For example, products that cause major damage to ecosystems should be more expensive than sustainable products. This will also encourage consumers to choose more sustainable and locally produced food.
The European Union and individual governments need to facilitate the transition. The upcoming revision of the European Union’s Common Agricultural Policy (CAP) is an important moment for a fundamental redesign. It should enhance and encourage the transition towards sustainable agricultural practices, focus on food quality and diversity and support fair trade.
Triodos Bank has identified four main elements the European Union and individual governments should focus on. Priority should be given to providing subsidies based on principles of organic farming, creating incentives for farmers to adopt sustainable agricultural practices.
Secondly, governments should stimulate and regulate a gradual transition to locally oriented, land-based animal farming that is based on organic principles. This would reduce the size of the herd in EU countries.
Thirdly, consumers should be enabled and encouraged to make more conscious choices about food. They need transparent information about the environmental footprint of food and nutritional values. Governments can help consumers make the right choice by providing clear regulation for transparency and by lowering the VAT for products that are produced organically and locally. Lastly, competition laws need to be revised so that they are no longer a burden for the transition, but rather stimulate it.
Financial institutions must 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 to bolster resilient future food systems. They should support sustainable innovation both for mature businesses and early-stage companies.
Riella Hollander: “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. Intensive farms risk becoming the stranded assets of the future, but thanks to regenerative agriculture we can avoid that. The focus of investment should be on the essence of our food system: providing nutritious food to all, now and in the future.”
What does Triodos Bank do?
Since its origin, Triodos Bank finances initiatives that contribute to the necessary transition of food and agriculture systems. We continue to grow our portfolio of food & agriculture projects. Our financing focuses on certified organic activities, and we are expanding this to broader transition leaders. To tackle all challenges in our food and farming systems, only certified organic farming is insufficient. Other themes such as the protein transition towards a more plant-based diet, combating food waste, local food consumption where possible and a fair distribution of wealth need to be prioritised.