Climate-smart regenerative agriculture

Perspectives

Climate-smart and regenerative agriculture

Transitioning towards sustainable farming

A new report, developed collaboratively by Deloitte, the World Economic Forum and NTT Data, uses the results of an extensive farmer survey in the EU as a case study to outline how targeted investments in sustainable agriculture can provide positive economic benefits for farmers, improve ecological and climatic health, and build a more resilient global food supply.

Farmers’ critical role in building sustainable and resilient food systems

Food and agricultural systems are a cornerstone of society, feeding the world and accounting for more than one-fifth of jobs. As climate change continues to alter growing conditions, farmer livelihoods and food security will likely become increasingly threatened. Fortunately, a set of sustainable agriculture practices can reverse these trends and has the potential to transform global food production.

This report calls for business leaders, policy makers, NGOs, academics, and farmers to come together to boost adoption of climate-smart agricultural practices. Our analysis finds that if an additional 20% of EU farmers begin climate-smart farming, by 2030 they can collectively increase their annual incomes by up to €9.3 billion, reduce greenhouse gas emissions by 6%, and improve soil health over 14% of the EU’s agricultural land.

Climate-smart agriculture and the European Green Deal

Climate-smart agriculture, which is sometimes referred to as regenerative agriculture or carbon farming, focuses on climate-smart inputs, agro-ecological practices, efficient irrigation technology, and precision farming techniques. It aims to mitigate and adapt to the effects of climate change, enhance soil health and biodiversity, and improve farmer income while producing additional high-quality food.

Climate-smart agriculture lies at the heart of the EU’s efforts to achieve climate neutrality in the land-use sector by 2035. As part of the Farm to Fork Strategy under the European Green Deal, the 27-nation bloc has committed itself to removing at least as much carbon through land use as it produces, and to halve soil nutrient loss and chemical pesticide use by 2030.

Four key focus areas to support farmers’ transition to climate-smart agriculture

Achieving these ambitious but critical goals will require the buy-in not just of governments and business leaders, but of farmers themselves. For this report, we used survey results from over 1,600 farmers from seven countries to identify obstacles and opportunities to more widespread adoption of climate-smart agriculture. These insights inform four key areas of intervention necessary to support farmers in their transition to climate-smart agriculture:

Financing and risk management

Diverse financial mechanisms can help provide farmers with the capital and risk management needed to adopt and sustain climate-smart practices. These include innovative, stackable finance and insurance products; private sector procurement guidelines and long-term purchase agreements; and carbon credits and other forms of ecosystem service payments.

Innovation
ecosystems

All the solutions needed to create net zero food systems at scale do not exist yet, so breakthroughs in technology and cost reduction are critical to close the innovation gap. Digital farm management tools, new crop varietals, and cost-effective measurement technologies are just some of the ways that innovation can optimize farm-level activity and create value chain traceability and transparency.

Education and awareness

Building widespread agreement on the business case for climate-smart agriculture and teaching the technical skills to execute these practices is essential for adoption at scale. Farmers would benefit from more accessible and segment-specific information on the expected ROI and resources required for specific practices. Consumer-focused awareness is also critical for shaping market demand signals.

The policy
environment

Farmers and value-chain players should be supported by an enabling environment that incentivizes the transition to climate-smart agriculture. Policies that subsidize climate-smart practices, encourage private sector investment, and clarify messaging to consumers are likely to accelerate the transition. Private sector actors can help drive change by advocating for these reforms.

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This executive summary is based on the Transforming food systems with farmers report that was developed collaboratively by Deloitte, the World Economic Forum, and NTT Data.

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