Reducing GHG Emissions Through Farm-Level Incentives
- Date: 10 August 2023
- Author: Katherine Devine and Emily Moberg, WWF
Just about any production process causes greenhouse gas emissions, and the production of food is no different. As a whole, the food system creates about a third of global greenhouse gas (GHG) emissions. The great bulk of those occur on the farm – from deforestation that converts wild habitats to farmland; from land-based agricultural practices, like fertilizer use and livestock production; and from farming practices themselves, including fossil fuel emissions from tractors and other farm equipment.
Because of already tight profit margins, farms have little leeway to invest in processes that cut those on-farm emissions. That’s where incentives come in. By offering incentives to elements of their supply chain, companies can begin to shift behavior at various steps in food’s journey from farm to consumer, mitigating GHG emissions. Incentives can range from rewards to penalties, financial or otherwise. In a new report, the Markets Institute at WWF has focused on the rewards end of the spectrum, which companies have begun to discover is the more fruitful way to engage their supply chains.
| Field-to-farmgate emissions | Farmgate to retail | Retail to landfill |
|---|---|---|
| Deforestation and other land use change: 32% Agronomic practices - Land: 34% Agronomic practices - Non-land: 6% |
Transport: 5% Processing: 3% Packaging: 5% |
Retail: 4% Consumption: 3% End of life: 9% |
Source: Crippa et al., “Food Systems Are Responsible for a Third of Global Anthropogenic GHG Emissions.” Note that the remaining emissions are split between retail, consumption, and end-of-life.
WWF’s research on the greenhouse gas emissions of 10 commodities led to companies sharing that they found it critical to know which incentives to offer, what had worked and what hadn’t, and to share information with (as well as learn from) other companies on these issues. After interviewing more than 90 experts from companies, industry associations, and civil society groups, WWF developed a typology of incentives and grouped them into five broad categories: price premiums, financing, knowledge sharing, new products or markets, and contracting. In the report, titled “Incentives at the Farm: How Companies are Moving from Setting Climate Targets to Delivering on Them,” we have laid out examples of incentives that various companies have implemented to help them achieve their GHG-reduction targets.
In one example, Truterra collaborated on a program to reward growers for sustainability improvements through a public-private partnership with Dubuque County in Iowa. The program rewards farmers for improving soil health and water quality, paying farmers based on changes to their sustainability rating in the Truterra sustainability tool.
New products also figure into incentives targeted by companies. For example, General Mills has worked alongside The Land Institute and the University of Minnesota to research Kernza, a perennial grain with climate and other environmental benefits. A cereal containing Kernza grains was launched in 2021 by Cascadian Farm and has become a staple on the shelves of Whole Foods Markets and other retailers.
Farmer-focused incentives are a critical tool for shifting behavior all along the food production and distribution pipeline. If companies are not able to address the on-farm emissions that constitute a majority of their total carbon footprint, we will not make progress toward the Paris Agreement targets for 2030 and companies will not meet their GHG-reduction goals. With only seven harvests left in which to reach those goals, companies must deploy effective incentives and retire ineffective ones on a much broader, faster scale.
About the authors:
Katherine Devine, Director, Business Case Development, WWF Markets Institute
Katherine brings more than 15 years of experience working at the intersection of business and conservation. Collaborating with internal and external experts, she crafts concise, digestible business cases on a range of topics related to food production, analyzing how sustainability can lead to positive bottom-line impacts and reduced risk.
Emily Moberg, Director, Scope 3 Carbon Measurement and Mitigation, WWF Markets Institute
Emily uses her quantitative research and modeling background to identify the cutting-edge trends and solutions around climate mitigation in agriculture and aquaculture. At WWF, her work has included research on greenhouse gas impacts of commodities ranging from coffee to tuna to beef, and strategic efforts to choose appropriate measurement and accounting tools with industry groups.