The UN FAO has published a new report urging reform of the world’s $540bn in farming subsidies. The FAO estimates that subsidies account for 15 per cent of agriculture’s total production value globally, with the figure expected to more than triple to $1.8tn by 2030.
The report finds that converting land to agricultural use has led to a 70 per cent reduction in global biodiversity. Food production generates about a quarter of all greenhouse gases. The UN estimates that these hidden costs to public health and the environment total about $12tn a year: $6.6tn in health problems caused by obesity, undernutrition, and pollution; $3.3tn from agriculture’s effects on the climate and the environment; and $2.1tn due to wasted food and fertiliser leakage.
The Guardian adds that while $100bn is spent each year on climate change measures and $5bn for deforestation, governments annually provide $470bn in farm support that negatively impacts the world’s climate and biodiversity.
Bloomberg warns that climate change could negatively affect food supplies. It says that yields of staple crops could decline by almost a third by 2050 unless emissions are drastically reduced in the next decade.
The US and the EU have agreed to try and cut methane emissions by about one-third by the end of this decade. Their agreement targets the energy, agriculture and waste industries.
A report in Nature argues that agriculture is responsible for 35 per cent of global GHG emissions, with the meat industry accounting for 57 per cent of all food production emissions, with 29 per cent coming from the cultivation of plant-based foods. The rest comes from other crops like cotton or rubber. Beef alone accounts for a quarter of emissions produced by raising and growing food.
When asked about meat’s contribution to GHG emissions, most people will quote the FAO figure of 14.5 per cent. Another new report, however, claims that this figure is out of date and that the minimum estimate for animal agriculture’s emissions should be updated to 16.5 per cent.
The Guardian writes that one solution might be to potty-train livestock to poo and pee in designated areas where their waste can be better managed.
The FT writes that PR agencies working for the alt-meat sector may be behind some of the anti-meat articles in the media. The newspaper argues that lab-grown meat is not about sustainability. They write, “Ultimately, lab-grown meat is not about saving the planet, it’s not really even about food. It’s about IP.”
Meanwhile, ADM plans to launch its first US plant-based meat portfolio in a joint venture with Brazilian beef producer Marfrig Global Foods SA. According to ADM, more than half of conventional meat-eaters are diversifying to alternative proteins.
Nestlé SA has announced a three-pronged plan to invest approximately $1.3 billion over the next five years to help its farmers and suppliers transition to using regenerative agriculture practices. Agriculture accounts for nearly two-thirds of Nestle’s total greenhouse gas emissions, with dairy and livestock making up about half of that. The company hopes to halve its emissions by 2030 and achieve net-zero emissions by 2050.
With a certain irony, a shortage of CO2 used to stun pigs and chickens before slaughtering could impact UK meat supply chains. The CO2 used by the meat industry is a by-product of fertiliser production, but two large UK fertiliser factories have recently suspended operations due to soaring gas prices. The UK’s biggest poultry supplier has said the CO2 shortage could result in a lack of turkeys for traditional Christmas dinners.
Meanwhile, the UK retailer Marks & Spencer is closing eleven of its French stores because of problems supplying them with fresh and chilled foods since Brexit. The UK government has promised an investigation into how labour shortages, Brexit and surging commodity prices are hurting the country’s food industry.
Governments in other countries are also looking at their food supply chains as shortages bite, and prices rise. Global food prices were up 33 per cent in August from a year earlier. Bloomberg thinks that the situation is unlikely to improve as extreme weather, soaring freight and fertiliser costs, shipping bottlenecks, and labour shortages compound the problem.
In China, the government has said it will continue efforts to stabilise commodity prices using various measures, but with a particular emphasis on the use of market instruments (presumably the management of reserve stocks).
The Danish shipping giant Maersk has upgraded its profit expectations for a second time this year to between $22bn to $23bn. At the start of this year, they had forecast profits between $8.5bn and $10.5bn. Freight rates have jumped 26.6 per cent from a year earlier, the sharpest increase since February 2006, based on figures from Cass Information Systems. The gain followed a 23.8 per cent increase in July. A record 65 container ships are waiting to offload in the ports of Los Angeles and Long Beach. Of those, a record 23 are drifting because anchorages were full.
In long reads, the Guardian writes that new forensic testing techniques are helping to reduce food fraud, particularly in terms of origin. Bloomberg Green takes a long look at how even the best-intentioned agricultural companies can fail to live up to investor expectations regarding sustainability and human rights.
© Commodity Conversations ® 2021
Some of the links above require subscriptions. Please support quality journalism.