Carbon Emissions and Agriculture: How should we be thinking about the carbon tax?

The past few years have seen a significant shift in the way that governments are responding to the climate crisis. The introduction of carbon pricing mechanisms has seen particular momentum. In essence, carbon pricing works by putting a price on carbon emissions with the aim of bringing down emissions, driving investment into clean technology and fueling low-carbon economic growth.  

Carbon pricing works on the “polluter-pays” principle, shifting the burden for the damage from carbon emissions back to those who are responsible for it. Carbon pricing provides an economic signal for polluters, allowing them to decide whether to discontinue their polluting activity, reduce emissions, or continue emitting at the same level and pay for it.

According to the World Bank, there are currently around 40 countries and more than 20 cities, states and provinces already using carbon pricing mechanisms, with more planning to implement them in the near future. Last month South Africa joined those countries already using carbon pricing with the promulgation of the long awaited Carbon Tax Act (No 15 of 2019). The first phase of this Act will run until December 2022 with the second phase running from 2023 until 2030.

Although there are still some uncertainties around how the agricultural sector will be included in this tax, an important first step in managing this tax is understanding where emissions are coming from and the relative carbon intensity of different agricultural inputs. The Confronting Climate Change (CCC) Initiative uses industry data from the South African fruit and wine sectors to determine industry-specific carbon emission benchmarks. The information sheet below provides an overview of farm level emissions determined through the CCC initiative and unpacks where these are coming from, and what this could mean from a monetary perspective.

A shift in the strategic landscape for agricultural export supply chains

There have recently been a few events that are creating a major shift in the strategic landscape of agricultural export supply chains. They involve, amongst else, angry school children, political changes, a change in language and a few scientific reports.

Let’s start with the science. The United Nations (UN) recently released their fifth Global Assessment Report on Biodiversity and Ecosystem Services on 6 May 2019. The report has 145 authors from 50 countries who worked for three years to compile it. Representatives from 132 member nations signed off on the findings. In short, it’s credibility and authority are beyond question. The findings are dire and the language unusually stark for a United Nations report. Some of the main findings are as follows:

  • In the past 50 years (how old are you?) there has been an 82% decline in global biomass of wild mammals;
  • One million species face extinction of which 500,000 species are “dead species walking” – species that are not yet extinct but, due to changes in, or reduction of, their habitats, have no chance of long-term survival;
  • Human society are under urgent threat from loss of Earth’s natural life;
  • And this is where it gets uncomfortable for our industry… agriculture, forestry and fisheries are the main drivers of this ecological loss.

Other recent and credible papers and reports, such as the Worldwide Fund for Nature’s (WWF) Living Planet Report, paints the same stark picture.

So, we’ve covered the science side. Now who are the angry school children and where do they fit in? They are 12 to 16 year olds, represented by Greta Thunberg, a 16-year-old Swedish schoolgirl. Here is an abridged timeline:

  • 20 August 2018 – Greta started a school strike for the climate by herself (1 person).
  • 18 January 2019 – 47,000 school children strike in Germany and Switzerland.
  • 15 March 2019 – 1,400,000 school children strike around the world.
  • 24 May 2019 – The latest strike, with events in 125 countries.

That is exponential growth for you. The next event is planned for 20 September 2019 and there is a call for everyone to join the school children. Greta has presented at TEDx, addressed the COP24 summit, the World Economic Forum in Davos, European Economic & Social Committee and EU leaders at the EU parliament. She has been nominated for the Noble peace prize and chosen by Time magazine as one of the 100 most influential people of 2019. These “children” are passionate and determined and most of them will be able to vote in the next elections.

As a matter of fact, political change is already afoot. In Sunday’s (26 May 2019) EU Parliament elections, the “Greens” made large gains. They are now the second largest party in Germany with 20% of the vote. Young voters in particular abandoned the two main “conventional” political parties in droves.

Eight European countries (France, Belgium, Denmark, Luxemburg, Netherlands, Portugal, Spain, and Sweden) have called for an ambitious strategy to tackle climate change. Their proposal paper calls for the EU to have net-zero greenhouse gas emissions by 2050 and spending 25% of the EU budget on fighting climate change. Twenty. Five. Percent.

Another recent trend that will influence consumers’ and the electorates’ thinking around environmental risks is a change in the language used by the media in describing the environmental crisis facing us. The term “climate change” is increasingly replaced with “climate emergency”, “climate crisis” or “climate breakdown”. The loss of biodiversity and weakening of ecological systems is now referred to as an “ecological breakdown”. Social media has already grabbed onto these new hashtags. These changes are emphasizing the scale, extent and outright danger of the crisis looming for mankind.

The latest learnings from scientific studies, changes in the socio-political landscape and the choice of words used to describe this crisis is ramping up pressure on retailers to address climate and ecological risks in their supply chains. This pressure is set to grow at an accelerating rate.

Agriculture that is not seen to be embracing fundamental change towards ecological restoration and regeneration will experience strong push back from consumers, retailers and society in general. Expect more demands, more standards, more controls and other hurdles to accessing markets as retailers scramble to demonstrate that their supply-chains are not just minimizing negative impacts, but are delivering real and lasting solutions.

The take home message for growers, agri-businesses, supply chains and industries is to proactively develop, drive, communicate and OWN sustainability programs that deliver real and lasting ecological gains, or face the prospect of markets dictating the agenda with more top-down standards, programs and controls, or losing access to those markets to competitors who do move decisively in response to this crisis.

Sources:

The Confronting Climate Change Initiative

The Confronting Climate Change initiative was developed to support South African fruit and wine farmers, it is a carbon foot printing project that identifies the risks and opportunities associated with carbon emissions… Read more

Carbon emissions of grain farming in the Western Cape

Grain SA initiated the Carbon Footprint project, with Phase 1 aiming to calculate and compare the greenhouse gas (GHG) emissions of different farming systems in the winter grain region in the Western Cape.  An increase of GHGs in the atmosphere traps the sun’s radiation or energy directly leading to an increase in the earth’s temperature or so-called global warming (IPCC, 2007).  The most common GHGs in the atmosphere are water vapour, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and ozone. Human activities have led to a significant increase in the concentration of specifically CO2 in the atmosphere from the burning of fossil fuels (coal, oil and natural gas), deforestation, land use change and soil erosion (Earth System Research Laboratory, n.d.).  GHG emissions are measured in carbon dioxide equivalents (CO2e) and will henceforth be referred to as carbon emissions.  Phase 1 was the start of a longer term process of using the carbon footprint methodology and results within the grain industry as an adaptive management tool (Figure 1).

 

Figure 1: Carbon footprint project phases envisaged by Grain SA.

 

Project scope and methodology

The study only included activities and inputs at the farm stage of the grain value chain.  The methodology used to calculate the carbon emissions per ton grain was the PAS 2050: 2011 protocol developed by the British Standards Institute (BSI).  Carbon emissions is only one of a range of impacts that need to be taken into account to obtain a holistic view of the environmental impacts of a farming system.

The winter grain sub-regions included in this study are presented in Figure 2.  Existing data (inputs and yields) was collected from representative production practices in each region to model the current scenario of carbon emissions.  The current scenario consists of a combination of conventional (CT) and conservation agriculture farming systems (Current CA) currently practiced in these regions.  For the future scenario, an ideal but realistic CA system (Future CA) predicted to be adopted by most grain producers twenty years into the future was calculated with corresponding inputs and yields.  In the Western Cape there is currently no big difference between CT and CA; the CT wheat farming system does not practise crop rotation and therefore wheat is planted every year. In the Current CA and Future CA systems crop rotation is practised and the commodities included in the models per region were wheat, barley, canola, medics and lupins.  All inputs were specified on a per hectare basis.  The carbon emissions (kg CO2e/ton) per farming system was calculated from the data provided.

Figure 2: Winter grain sub-regions in Swartland and Southern Cape (Rûens) regions, Western Cape

In order to calculate a regionalised carbon emission profile, the results per commodity were weighted according to the yield per farming system.  Information from the Crop Estimates Committee (CEC) was used in order to calculate the current regional carbon emissions for each region. Thereafter these figures were extrapolated to provide a snapshot winter grain region carbon emission profile for the current and future scenarios.  In addition to the regionalised carbon emissions for the current and future farming scenarios, farming input hotspots were identified.  Hotspots are defined as activities which contribute the most to the overall carbon emissions and are therefore categorised as ‘carbon intensive’.

The snapshot carbon emissions per ton product for the winter grain region currently and for the future was determined through a pro-rata allocation of the result to the total yield per commodity.  According to best available estimates, approximately 90% of total grain yield (tonnes) in the Western Cape are currently under CA while the remaining yield is under CT. With the calculation of the future scenario it is predicted that 80% of the total yield will be under Future CA.

Data and Inventory

Grain SA sourced existing production practice data from the different agribusinesses in the Western Cape. The main participants who collaborated with production cost information for the different systems were Kaap Agri (Swartland), Overberg Agri (Southern Cape) and SSK (Southern Cape).

Figure 3 illustrates the data collection process with all the different production inputs collected to calculate the carbon emissions per ton grain.

Figure 3: Data collection process map to calculate carbon emissions per ton grain in winter grain regions.

In addition to the existing data, Grain SA had discussions with CA researchers from the Western Cape (Johan Strauss, personal communication) for making realistic assumptions regarding production inputs under an ideal Future CA scenario (see Table 1).

Table 1: Assumptions for inputs for Future CA system.
Inputs Assumptions
Yield Increase with 10%
Fuel Decrease with 50%
Fertiliser Decrease with 50%
Lime No change
Fungicides Decrease with 50%
Herbicides Decrease with 50%
Insecticides Decrease with 60%
Burning of crop residues No burning
% of the above ground residue removed 30% removed

Table 2 illustrates the three different grain farming systems with their crop rotations in the region. In the CT system only wheat is cultivated each year while different crops are planted in rotation with each other in the Current CA and Future CA systems.  The transition from the CA to the Future CA system sees a change in the commodities cultivated in the Swartland regions but no change in the Ruens regions.

Table 2: Winter grain sub-regions with corresponding crop rotations and farming systems.
Region Farming system
Conventional CA Future CA
Darling/Hopefield Wheat Wheat Wheat
Medics Medics
Lupins Canola
Northern Swartland Wheat Wheat Wheat
Medics Medics
Middle Swartland Wheat Wheat Wheat
Medics Barley
Canola
Southern Swartland Wheat Wheat Wheat
Medics Medics
Canola Canola
Western Ruens Wheat Wheat Wheat
Barley Barley
Canola Canola
Southern Ruens Wheat Wheat Wheat
Barley Barley
Canola Canola
Eastern Ruens Wheat Wheat Wheat
Barley Barley
Canola Canola

Results

The results are presented per farming system (CT, Current CA and Future CA).  In addition to the carbon emissions per ton grain results the hotspots for the current and future scenarios on farms are presented.

Carbon emissions profile per farming system

The carbon emissions per ton wheat are presented in Figure 6.  Wheat is the only grain grown under all three systems (Table 2) and therefore this comparison could be performed.

Figure 4: Carbon emissions per ton wheat per farming system per sub-region.

The results indicated that there was a 46% decline in carbon emissions per ton grain with the transition from CT to Future CA and a 44% decline from Current CA to Future CA.  There is only a small difference in carbon emissions between CT and Current CA (3.5%) due to very similar input amounts and yields.

Carbon emissions profile for current scenario (CT and Current CA)

The weighted average carbon emissions based on the total yields (tonnes) under CT and Current CA per sub region are presented in Table 3.

Table 3: Carbon emissions per ton grain for current scenario per sub region and overall
Region Total tonnage Carbon emissions for region [kg CO2e/ton grain]
Darling/Hopefield 54 507 597.23
Northern Swartland 146 217 534.76
Middle Swartland 276 399 555.90
Southern Swartland 21 896 609.73
Western Ruens 182 449 637.92
Southern Ruens 209 245 485.85
Eastern Ruens 325 585 396.22
Weighted average   513.70

 

The overall carbon emissions under the current scenario is 513.70 kg CO2e/ton grain.  The carbon emission hotspot profile per hectare for the current scenario is presented in Figure 5.  It is evident that the farming input with the largest contribution to overall carbon emissions is fertiliser use, but more specifically synthetic Nitrogen, which makes up 90% of the total fertiliser carbon emissions at 757 kg CO2e/hectare out of a total of 1 182 kg CO2e/hectare.

Figure 5: Carbon emission contributions per input per hectare for current scenario

 

Carbon emissions profile for future scenario (Current CA and Future CA)

Using the total predicted tonnages for grains under the Current CA and Future CA systems, the future weighted average snapshot carbon emissions per ton grain for the winter grain region is predicted to be 328 kg CO2e/ton grain.  The results per sub region is presented in Table 5.

Table 5: Carbon emissions for future scenario per sub-region
Region Total tonnage Carbon emissions for region [kg CO2e/ton grain]
Darling/Hopefield 58 993 339.93
Northern Swartland 157 914 327.68
Middle Swartland 307 043 314.72
Southern Swartland 22 283 400.70
Western Ruens 182 575 418.47
Southern Ruens 207 598 334.52
Eastern Ruens 315 426 276 38
Weighted average   327.83

The carbon emission hotspot profile per hectare for the future scenario is shown in Figure 6.  Fertiliser use is the largest contributor or hotspot to total carbon emissions per hectare followed by lime and crop residues.  This profile is the same as for the current scenario but total GHG emission per hectare are significantly lower at 811 kg CO2e/hectare.

Figure 6: Carbon emission contributions per input per hectare for future scenario

 

Conclusion

It is evident that there will be a significant decrease in carbon emissions in the winter grains industry with the transition to the Future CA systems as well as other environmental, economic and social benefits including the protection of biodiversity, increase in net yields and farm income and improving human nutrition (Putter, Smith & Lange, 2014).

From the perspective of the climate change impact, the transition to a higher level and quality of CA (defined here as Future CA) is highly beneficial for the winter grain region in the Western Cape.  The synergies between the Future CA farming system and the environmental, economic and social benefits will ensure the sustainability of future grain cultivation in the region.

Authors

By Lorren de Kock and Hendrik Smith (Grain SA)

References

Earth System Research Laboratory. n.d. Trends in atmospheric carbon dioxide. Available: https://www.esrl.noaa.gov/gmd/ccgg/trends/global.html.

IPCC. 2007. IPCC Annex I: AR4 Appendix. Available: http://unfccc.int. [2018, August 23].

Putter, T., Smith, H. & Lange, D. 2014. Transforming the benefits of conservation agriculture into a pro-CA Manifesto. Available: http://www.grainsa.co.za/transforming-the-benefits-of-conservation-agriculture-into-a-pro-ca-manifesto2 [2017, August 10].

Theory of Change in Agricultural and Rural Development Interventions

The Theory of Change is a central concept in the evaluation field, which we have recently used in two programme evaluations for the Department of Agriculture in The Western Cape. What exactly does it refer to, and how can it be used to improve how a programme or project is working?

The thinking around a Theory of Change can be applied to projects, programmes, policy or strategies. It can also be applied within organizations. In all of these instances, be it organizational or for an intervention, a mission, objective or strategy is typically formulated. For example, reduce hunger. The ‘how’ in the formulated goal is often not always explicitly addressed.

In 1995, Weiss, argued that a key reason complex programs are so difficult to evaluate is that the assumptions that inspire them are poorly articulated. Stakeholders typically are unclear about how the desired change process will unfold and therefore little attention was placed on early and mid-term changes that need to happen in order for a longer term goal to be reached. The lack of clarity about the ‘mini-steps’ that must be taken to reach a long term outcome can reduce the likelihood that all of the important factors related to the long term goal will be addressed. Central to this process is recognising the assumptions that are made. Understanding, and making explicit, the assumptions that will lead to the desired change is central to the Theory of Change.

The Theory of Change offers a way to describe the set of assumptions that explain the mini-steps that lead to the long term goal of interest. It helps to explain how activities are understood to produce a series of results that contribute to achieving the final intended impacts. It can be developed for any level of intervention – an event, a project, a programme, a policy, a strategy or an organization. It can be developed either for an intervention where the objectives and activities can be identified and tightly planned beforehand, or in an intervention that changes and adapts in response to emerging issues and to decisions made by partners and other stakeholders.

A theory of change is usually presented in a visual diagram (or logic model) that allows the reader to see the big picture quickly. It does not usually provide a specific implementation plan. The purpose of the process is to allow people to think about what must be changed before doing it.

Programmes, projects, strategies and interventions need to be grounded in good theory. If the intervention is based on good theory, with well tested assumptions, then managers can be better assured that their programmes are delivering the right activities for the desired outcomes. By  creating a theory of change, programmes are often easier to sustain, bring to scale, and evaluate, since each step from the ideas through to the outcomes it aims for, to the resource requirements – are clearly defined within the theory.

REFERENCES

PK Thornton, T Schuetz, W Förch, L Cramer, D Abreu, S Vermeulen, BM Campbell (2017): Responding to global change: A theory of change approach to making agricultural research for development outcome-based. Agricultural Systems, 152.

Rogers, P., (2014), Theory of Change, UNICEF.

Weiss, C. H. (1995). Nothing as practical as good theory: Exploring theory-based evaluation for comprehensive community initiatives for children and families. New approaches to evaluating community initiatives: Concepts, methods, and contexts, 1, 65-92.

Virtuous Engagement Loops – An approach to move beyond certification.

We are of the firm conviction that real change only becomes possible when it happens in an “inside-out”, or, when thinking in terms of dynamics in supply-chains, in a “bottom-up” manner. Our SHERPA Management System is specifically and purposefully designed to encourage, support and enable this type of change process. The more decision makers on a farm (or any business in a supply-chain for that matter) feel they truly “own” the sustainability agenda for their business, the greater the potential for fundamental shifts in business practice towards those that are genuinely sustainable.

As we engage with farmers, suppliers and retailers on this approach, so our conviction is affirmed and reinforced – there is a real and growing appetite to look at alternative supply-chain improvement and risk management processes that move “beyond certification”.

But, it is at this positive junction that the inevitable questions start to pop up. “How can we trust the output?” … “are the self-assessment ratings reliable?” … “yes but, we still need to verify the results” … and before long we are drawn back into the debate over how one builds assurance into a bottom-up program without killing the very essence of “bottom-up”.

Before setting a meaningful proposal on the table to address this, it is important to step back and look at what the real issue is. At a very fundamental level the need for some form of assurance is the absence of trust: parties at different points within a shared supply chain simply do not trust each other enough – “I cannot trust what you are telling me, so I need a third-party to check what you are saying”. When one couples this lack of trust with the power imbalances inherent in supply chains, the emergence of command-and-control (top-down) certification schemes as the approach of choice becomes understandable.

But, as well intentioned as these schemes inevitably are, they are the death knell to the bottom-up/inside-out processes of change so needed, and they further erode the trust that is already in such short supply. A vicious cycle emerges of decreasing trust/increasing imposition of standards/less ownership of the sustainability agenda…and so on into an environment of less and less trust, more and more box-ticking and less and less impetus for the much-needed changes. Rather than being catalysts for change towards a sustainable future that they have all set out to be, these programs, ironically, end up stalling innovation and entrenching business-as-usual.

Supply-chains so desperately need the trust they seem so bereft of; in the context of the complexity and dynamic nature of the environments supply chains find themselves in today, the building of trust and transparency is indispensable to sustaining competitiveness and strategic advantage. How does one begin to address this?

In their paper “Transparency in Supply chains: Is Trust the Limiting factor?”[1] the authors provide an important analysis of trust and transparency in supply chains that is helpful in developing an approach. Some of their key points from their paper are paraphrased here:

  • Trust is the intention to accept vulnerability based upon positive expectations of the intentions or behaviours of another. Vulnerability is therefore a key character of trust and implies an acceptance of the risk of being disappointed.
  • The paradox of trust is that only trust breeds trust. That means that to receive trust one has to assume trust.
  • Also, the decision to trust is at the same time a decision against control – trusting someone means that you do not need to take the trouble of checking on them and accepting the chance of them disappointing you.
  • This leads to the question as to who should take the first step in trust building, particularly when trust levels are low.
  • Transparency has an important role to play in this regard, it is an important precondition and mediator for trust, and vice versa.
  • But, for transparency to play this positive role it cannot be prescribed by one party to another, it has to be voluntary. Prescribing transparency – “thou shalt share your information with me” – takes us deeper into command-and-control, eroding trust further.
  • Trust building can commence when steps are taken to voluntarily share information (to be transparent) with the other party. As information is shared so trust builds, and as trust builds so the information is more willingly and openly shared.

The paper points to the building of trust and transparency as a sensitive and respectful “dance”; sensitive in that the process must never be allowed to push for more disclosure than the trust allows for, and respectful in the sense of acknowledging the other party’s willing, but voluntary, participation in the process. It is this “dance” that we have attempted to capture within our Virtuous Engagement Loops (VEL) approach. VEL’s are formed when one party voluntarily shares information about themselves with another party, and the recipient uses that information to engage constructively and positively with the supplying party, for the benefit of both parties. VEL’s are virtuous in the sense that they have the potential to create an upward spiral of increased transparency, increased positive engagement, increased trust, and so on (as opposed to the stalemate of low trust/low impact that currently characterises many supply chains).

Why it is worth engaging in this “dance”? The answer provides a compelling justification: In the context of supply chains, we engage in trust building in order to enhance the quality of information sharing with each other, in order that we are all better equipped to make better operational and strategic decision, in order that, as a supply chain, we are able to be in a strategically advantageous position relative to our competitors. Climate change and other sustainability drivers serve to increase the variability and unpredictability in these systems, magnifying the need for trust and transparency.

It goes without saying that VEL’s will be as effective as the quality of information that is shared and around which the VEL’s form. So before looking at the VEL process in detail, it is important to make a point about the quality of information that SHERPA is able to provide. The SHERPA process includes self-assessment, which by its nature is subjective, as well as Performance Indicators, which are a suite of objective metrics that measure performance. These both serve to highlight areas of weakness or risk but, importantly, the Performance Indicators serve as an internal “verifier” of the self-assessment ratings: We see many instances where a high self-assessment rating in a particular subject-area is challenged by a Performance Indicator that indicates a weakening in the area. This built-in cross-checking capability within SHERPA coupled with the detail of the information collected and shared via SHERPA, ensures that VEL’s develop around rich, high-quality, information.

We propose the following step-wise approach of using VEL’s as a mechanism to build trust and transparency in a way that strengthens the resilience and competitiveness of supply chains, while negating the need for formal third-party verification (and the pitfalls that go with it):

STEP 1: Shared Commitment

Parties in the supply chain (for example farmers and a retailer) agree to the ethos of the bottom-up approach and the need for a new approach to building trust and transparency based on voluntary information sharing and positive engagement between the parties.  This can be formalised in a “Letter of Commitment” signed by both the farmer and the retailer.

It is important that the farmer’s participation in the program is voluntary and they have the option to opt out at any stage (and revert to the conventional assurance models applicable in the supply-chain).

STEP 2: Building Internal Virtuous Engagement Loops

The farmer and/or leadership team adopts the bottom up tool (SHERPA) and uses the self-assessment and the measurement of Key Performance Indicators to identify areas of strength and weakness, followed by the prioritization of areas requiring improvement and the development and implementation of improvement plans. This is an internal process and the output can be shared internally as and when the farmer and/or leadership team feel SHERPA can add value to the broader management and improvement processes (for example, the SHERPA improvement management module allows all improvement tasks to be centrally delegated, tracked and updated). Internal Virtuous Engagement Loops develop as more personnel within the business engage in dialogue about the output and its interpretation, as well as the prioritization of areas for improvement and the defining and execution of improvement actions.

In this step the bottom-up nature of the program finds traction where it matters most – at farm-level. As farmers and their staff engage in the SHERPA processes and the output reflects the farm’s reality, so their ownership of the sustainability agenda for their farm begins to increase, and their confidence to share their output – to tell their story – increases.

STEP 3: Building Intra Supply-Chain Virtuous Engagement Loops

As confidence in the bottom-up process/tools develops so the farmer can consider sharing the output beyond the business. A first step in this expanded sharing could be to elect to have the output reviewed by Blue North (this is an option within the SHERPA App and can be selected at any of the Steps by the farmer). The Blue North review is simply an objective “quality control” exercise to identify any areas of misinterpretation, missing or erroneous data etc., and provides a first safe step in the process of sharing output with other parties in the supply chain. Ultimately Step 3 should lead to the voluntary sharing of some or all of the output with the Retailer. This sharing is always voluntary and to the extent set by the farm (for example, as a first step, the farmer can elect to share output related to the environmental performance of the business, with the social and economic output only being shared once confidence in the VEL with the retailer is established).

The retailer, in response to and empowered by the rich detail of the information being shared, and guided by the agreed ethos of the program as set out in the Letter of Commitment (Step 1), can now enter into a meaningful and productive dialogue with the farm about areas of strength and weakness and corresponding improvement plans etc. The emphasis of this dialogue is on understanding the risks/weaknesses identified and to lend weight to proactive risk management and problem solving. Constructive engagement embraces a language/approach of partnership and joint problem solving that reflects the shared destiny of the parties. It is a distinct and decisive move away from the judgemental and trust-destroying dialog that characterises compliance programs. The Virtuous Engagement Loop that develops between the farmer and the retailer is characterised by increasing transparency, increasing positive engagement, increasing alignment of effort and increasing trust.

STEP 4: Building Extra Supply-Chain Virtuous Engagement Loops

Confidence in the approach will reach a point where sharing can be extended to parties beyond the supply chain. These parties could include consumers, NGO’s, other interest groups/stakeholders etc. who have some vested interest in the “sustainability performance” of the supply chain and the parties it is comprised of. As with Step 3, the information sharing is always voluntary, and the farmer can control who is shared with and what information is shared.

What will be shared is a detailed view of reality at farm-level that they otherwise would have great difficulty to collect. Armed with this “ground truth” they can then engage the supply-chain and its members to scrutinize the output.  These external parties are not bound by the Letter of Commitment and may subject the supply chain to a harsher critique.  But as external VEL’s are formed so new ideas and conversations develop that can add to the understanding of challenges faced and the development of more robust and effective responses. As the engagement between the farm, the retailer and the external parties develops so the strength and credibility of the sustainability program increases.

The systematic building and nurturing of VEL’s can enable mature relationships based on trust and transparency to develop. The VEL approach proposed here protects the benefits of bottom-up processes of change while addressing the question of assurance: if you openly disclose information with me about your business and I am able to engage in a dialogue with you around that information, why do I need a third-party auditor to verify what you are telling me? And the more you share with other parties the more robust and credible the entire process becomes.

The Steps in the development of VEL’s for supply chains is summarised in the diagram below. Putting all the technical language aside, VEL’s are simply about forging productive relationships between parties. This takes time and patience. Achieving true sustainability gains requires a move away from compliance-led approaches, and a step into the less structured world of relationship building. We can have the illusion of control and zero real change towards sustainability, or we can embrace a new approach that hold genuine potential for fundamental change. The choice is ours.

If you are interested to share your thoughts regarding what is presented here about VEL’s and/or other approaches to supporting credible bottom-up programs in supply chains, please contact us, we would welcome your inputs.

[1] Transparency in Supply Chains: Is Trust a Limiting Factor? M Frentrup and L Theuvsen. Paper prepared for the 99th EAAE Seminar ”Trust and Risk in Business Networks”, Bonn, Germany, February 8-10, 2006.

A First Introduction to SHERPA

I’ve been in some very tough meetings with farmers over the years. The most difficult ones were inevitably those where, in our wisdom, and in an attempt to be efficient in introducing a new concept or idea, we felt it best to convene a large group of farmers in one room; not always the best idea if what you are introducing is, even slightly, contentious: The first expression of hostility spreads like wild-fire to the whole group and the next thing you find yourself (and the idea being introduced) facing a withering “attack” across all fronts. Those sorts of meetings seldom ended well!

Those tough encounters, while rather unnerving and unpleasant at the time, forced us to think a lot harder about how one can and should approach the matter of effecting positive change at farm-level.  Some formative ideas emerged from these examinations:

  • Farmers hold the most important “keys” to sustainability for the whole supply-chain
  • Every farm is different
  • Every farmer develops site-specific knowledge and solutions
  • Real change comes from the inside-out

These insights showed us that our approach itself had to first undergo fundamental change. Over the past eight years, Blue North has developed, refined and evolved its approach, always endeavouring to give practical expression to these formative insights. This journey has now culminated in SHERPA, an online management system designed to support farmers in their strategic journeys to strengthen the long-term resilience and viability of their businesses.

Where did the name Sherpa come from? We were inspired by the renowned Himalayan guides who make it possible for mountaineers to prevail in the face of the most challenging conditions imaginable, and to succeed in conquering the highest and most dangerous mountains in the world. But Sherpas never climb the mountain for the climber, it’s always the climber’s own quest, the Sherpas just providing the guidance, council and support as needed to ensure success. This thinking has come together in the logo and strap-line that is shortly to be released on-line:

In short, SHERPA is designed as a “bottom-up” management system that provides expert support and guidance to a business on its journey of developing and implementing a sustainability program, such that it is fully “owned” by the business and is relevant, reflective of the business’s “reality” and effective in delivering true sustainability outcomes for the business (and the supply-chains of which it forms part).

SHERPA is a cloud-based system comprised of a number of components and processes, integrated into an end-to-end sustainability management system:

We are currently putting the finishing touches to SHERPA and have started the process of migrating all the data-sets from the excel-based tools (that have served as precursors to the on-line platform) onto the SHERPA database. We have begun engaging with current and prospective clients to reveal the inner workings of SHERPA, and if you are interested to have a demonstration please feel free to make contact with us via hello@bluenorth.co.za.

Harvesting ‘Knowledge’ with Podcasts

Have you come across the word ‘podcast’? There is a growing trend of people listening to podcasts, but if you are not among this trend you might be wondering, what exactly is a podcast and why should you bother?

A podcast is a digital audio file you can download from the internet. You can download a podcast to a computer, but most people download podcasts to their smartphones and listen to them “on the go”.

Podcasts are an easy way to gain knowledge and understanding about a specific subject area from passionate people who are experts in their field. And did I mention most podcasts are free…?!

So, what are podcasts about? There are literally thousands of topics, but broad categories include:

  • Business & Industry
  • News
  • Sport
  • Parenting, Kids and Family
  • Science & Medicine
  • Technology
  • Lifestyle & Health
  • Society & Culture
  • Politics
  • Religion
  • Comedy
  • Etc.

Whoever you are, there will be a podcast show for you!

Podcasts are produced by people who are passionate about a subject area. Podcasts episodes from the same person are normally grouped together as a show or series. Each show has a unique name and brand, like a TV series.

It is easy to find interesting, popular and trending shows. You just select the podcast category that interests you, and then the most popular shows will list first, or you can search, browse and explore to find a very specific show that appeals to you. Shows normally release a new episode or installment every week. This means that if you subscribe to a show, you will receive new installments automatically.

There are some great agriculture related shows, from regenerative agriculture, commodity specific farming, agri-marketing, agri-science, agri-investing, commodity markets, technologies, etc. If you are in an agri-supply chain, there will be an interesting podcast show for you.

The Regenerative Agriculture Podcast, hosted by John Kempf, is a great show to start with. Here are some of the show’s episode titles to whet your appetite:

  • Preventing nitrogen and phosphorus leaching.
  • Things to do when plants don’t respond to nutrient applications.
  • Why should we care about soil health?
  • Symbiotic relationships in ecology.
  • How insect pests identify unhealthy plants.

Now that you have a better understanding of what podcasts have to offer, you might be wondering, do I need to be tech-savvy to listen to a podcast? Absolutely not! Here’s an easy guide on how to access podcasts:

  1. Install the “Stitcher” app from iTunes App Store or Google Play (Android).
  2. Register on the Stitcher app.
  3. Browse shows and “star” your favorites to automatically download new episodes.
  4. Listen to shows through the Stitcher app on headphones, or even better, via Bluetooth over your car’s audio system.

Enjoy!

References and Further Reading

https://www.telegraph.co.uk/radio/podcasts/what-is-a-podcast-and-where-can-i-find-the-best-ones-to-listen-t/

Conservation Agriculture: A Focus on the Grains Industry

What is conservation agriculture? How is it important for both industry and individual farmers?

To answer these questions and better understand the importance of conservation agriculture within the grains industry, we spoke to Dr Hendrik Smith, the Conservation Agriculture Facilitator for Grain SA. 

What is conservation agriculture in the grains industry and why is it important?

Conservation Agriculture (CA) is an approach to managing agro-ecosystems for improved and sustained productivity, increased profits and food security while preserving and enhancing the resource base and the environment. CA is characterized by three linked principles, namely:

  1. Continuous minimum mechanical soil disturbance.
  2. Permanent organic soil cover.
  3. Diversification of crop species grown in sequences and/or associations.

CA principles are universally applicable to all agricultural landscapes and land uses with locally adapted practices. CA enhances biodiversity and natural biological processes above and below the ground surface. Soil interventions such as mechanical soil disturbance are reduced to an absolute minimum or avoided, and external inputs such as agrochemicals and plant nutrients of mineral or organic origin are applied optimally and in ways and quantities that do not interfere with, or disrupt, the biological processes.

CA facilitates good agronomy, such as timely operations, and improves overall land husbandry for rainfed and irrigated production. Complemented by other known good practices — including the use of quality seeds, and integrated pest, nutrient, weed and water management, etc. — CA is a base for sustainable agricultural production intensification. It opens increased options for integration of production sectors, such as crop-livestock integration and the integration of trees and pastures into agricultural landscapes.

Why has Grain SA decided to support a transition to conservation agriculture and what are the implications for the industry as well as for the individual farmers?

In South Africa, crop production systems based on intensive and continuous soil tillage have led to excessively high soil degradation rates in grain producing areas. This adds to the growing problems with profitability and poverty in some of the rural areas. If we have to offer farmers a better chance to survive on the farm, and if sustainable and economically viable agriculture is to be achieved, then the paradigms of agriculture production and management must be changed.

There is general agreement among key stakeholders in SA, that the reversal of environmental degradation processes, such as soil erosion, loss of biodiversity and climate change, as well growing problems with profitability and poverty, will be achieved through the adoption and implementation of CA. CA is seen as an ideal system for sustainable and climate-smart agricultural intensification, through which farmers can attain higher levels of productivity and profitability (i.e. or ‘green prosperity’) while improving soil health and the environment.

What Makes a Good Farmer?

What are the attributes of a really good farmer? Would they include a penchant for order and neatness? A single-minded focus on efficiency and yield maximization? A bullet-proof resolve in the face of risk? What about drive for expansion and scale or technical proficiency? While some or all of these may currently inform our rating of farmers, I want to propose some alternative attributes in response to this question. But before getting there, some context is needed.

One of the formative ideas, probably the most important one, that shaped our thinking when we started Blue North in 2011, and which fundamentally shapes what we do to this day, is understanding farmers as the key role-players in determining the sustainability of food supply-chains, and, by extrapolation, the sustainability of mankind as a whole.

Sound a bit grandiose? We think not: Farmers stand at the interface between the natural system and its inherent productive potential, and mankind’s dependence on the outputs of that system. We easily forget that dependence; we experience food, not as the product of our tilling, plowing, planting and tending, but as hygienic, wrapped and graded items only as far away, and requiring of effort, as a trip to the closest retail outlet.  In spite of the fact that the modern age has allowed the majority of people to live geographically disconnected from primary food production, our dependence on primary agricultural output remains obstinately steadfast and immutable.  We may live with the illusion of being unshackled from the drudgery and toil of farming, free to live in the “knowledge economy”, but it remains an illusion. As Wendell Berry says, “eating is an agricultural act”[1], and all we have done in effect, is outsource our food production to a few, very important people, farmers.

Two factors further magnify the importance of farmers: Firstly, farms, unlike factories, are non-uniform. No two farms are the same; their uniqueness a function of their particular soils, slopes, aspects, drainage, altitudes and micro-climates. This means farmers, unlike factory managers, have to be sensitive to, and learn to manage within, the tolerances of a very specific “place”. A critical coupling, therefore, exist between a farmer and the farm, resulting in the emergence of, often uncodified, site-specific knowledge, solutions and adaptations. The second magnifier is that agriculture represents the largest physical manifestation of negative anthropogenic impact on the planet – mankind’s antagonistic relationship with planet Earth is no more evident than in the vast scale of transformation of natural landscapes for agriculture.

This means that we cannot think about sustainability in general without deep consideration of agriculture, and we cannot consider “sustainable agriculture” without contemplating very fundamental changes to the way that we “do” agriculture. And the key actor at the center of this change is the farmer.

In short, there is a lot at stake and a lot rests on the shoulders of a very important but relatively small community of individuals. It is appropriate, therefore, to more deeply consider the question “what makes a good farmer?” in a bit more depth, and I want to propose, as a start, the following six attributes;

a. A good farmer is a systems thinker, able to perceive and understand the linkages between the farm’s productivity and the social and ecological dimensions of the farm; clear about what the farm depends upon and what its impacts are and how these need to be managed. Systems thinking also implies an understanding that the farm is not an isolated “island” but part of a larger integrated social and biophysical systems – the landscape or catchment – whose “health” is critical to the well-being of the farm, and vice versa. This demands that a farmer’s scope of thinking and management extends well beyond the legal boundaries of the farm.

b. A good farmer builds financial, social and natural capital. Warren Buffet’s patient approach to investing provides a useful analogy; the aim being to build capital to a point where one can live off the interest, necessitating a long-term view and avoiding eating into the capital base or putting it at risk. This stands in stark contrast to market speculation-based investing, high on adrenalin but fraught with risk (and poor performance measured over the long-term). Good farmers apply this thinking and approach not only to their financial capital, but to the management of the farm’s natural and social/human capital, understanding that short-term erosion of these capital stocks fundamentally weakens the farm, while consciously nurturing and growing them is essential to the farm’s productivity and viability in the long-term.

cA good farmer builds buffer capacity: Related to the above, this is about building in a “margin of safety” into the different aspects of the farm that collectively reduce its vulnerability to external shocks. In the current age, efficiency is often the ultimate measure of performance, and the building and maintaining of “buffers” can seem counterproductive, even wasteful. But good farmers understand how important buffer capacity is. In the financial dimension this is about maintaining sufficient levels of financial reserves to be able to continue as a going-concern through periods of low production, low prices, market closures etc. In the social dimension it’s about investment in the farm’s workforce beyond the menial, to those things that really build human potential, and which build the collective wisdom of the farm, in so doing endowing the farm with adaptive capacity – the ability to quickly perceive and effectively respond-to changing conditions.  In the ecological dimension it is about restoring and maintaining areas of natural diverse vegetation and biodiversity (such as biodiversity corridors, riparian buffer zones, diverse cover cropping etc.) even when at the “cost” of reduced areas for production. This sustains and strengthens key ecological processes (for example pollination, pest & disease suppression, soil conservation, flood suppression, nutrient cycling etc.) which reduces the farm’s sensitivity to environmental changes and shocks.

d. A good farmer is a master in delayed gratification: Good farmers play the “long game”, sacrificing short-term gain in favor of long-term stability and strength. Building required financial, social and natural capital as well as sufficient buffer capacity takes self-restraint and patience. Good farmers are also deeply attuned to what constitutes the natural pace of the farming system and are sensitive to anything that risks “forcing that pace” above a level where capital stocks risk being undermined. The use of fossil-fuel based agrochemicals and fertilizers is a case in point; while they provide a quick and convenient solution to a particular pest or nutrient deficiency in the short-term, injudicious use (forcing the pace) comes with the real risk of erosion of the natural and human capital of the farm. Just think of the long-term cost to farms of pest & disease resistance, water eutrophication, soil health decline and chronic illness in workers, for example.

e. A good farmer is a great observer/listener, looking out for and sensitive to feedback from across the system. Typically, financial and operational reporting is available, and most farmers rely on these feedback-loops to assess and manage progress. Good farmers know, however, that this information speaks for only part of the system – providing an incomplete and potentially distorted picture. Sensing the state of natural and social/human capital, the well-being of flows from these stocks and the farm’s impacts on them, the suitability of buffers for each etc. requires a step well beyond financial and operational reporting. It calls for a more nuanced approach of greater sensitivity. It requires time with employees building relationships and reliable, open and trusted communication channels. It requires regular time in-field, becoming sufficiently attuned and sensitive to subtle shifts in the farm’s ecological processes, interactions and dynamics. It also speaks to concerted efforts to build performance metrics and reporting that show the financial, social and ecological in an integrated and holistic way, not as disconnected components.

f. A good farmer is an innovator par excellence, able to take on board feedback, and to develop, test and implement the actions necessary to maintain the farm’s ongoing well-being. This attribute means no tolerance for complacency while demanding tolerance for the unavoidable discomfort associated with ongoing change. This capacity to drive ongoing improvement and perpetual learning is essential within a context of accelerating change and pressures from within the social, political and environmental spheres within which farms exist. Innovation equates to adaptation, and farmers have to be masters at managing adaptation in order for their farms to successfully evolve and survive in the long-term.

Ultimately, and in summary, a good farmer is a steward, a custodian of a more complex system then many of us dare to contemplate, yet one that we are utterly dependent upon. They deserve our keen interest, sympathetic support and deep respect.

Please let us know what you think of these and if you feel any important attributes have been missed. It’s an important conversation for us to be having.

[1] Berry, Wendell. What Are People For?: Essays (p. 145). Counterpoint. Kindle Edition