Latest articles

The sustainability conundrum

In the Western world at least, there’s a big demand for ‘sustainably sourced’ products. What that means, or receiving a premium for them, is another matter

The food giants want it on their labels, and in the annual reports and other information they send to their investors. PepsiCo, Walmart, General Mills, McDonald’s, Unilever, Sara Lee and Nestlé are among those citing the years 2020 or 2025 as targets for achieving their goals of buying “sustainably sourced” products.

But what does that mean exactly, and how do those sources — farmers — show they are using sustainable practices? And if they are, will they get a premium?

“This movement towards sustainability is here to stay,” says Erin Gowriluk, government relations and policy manager with the Alberta Wheat Commission.

“It’s all about trying to satisfy that consumer demand, or perceived demand, for something they feel is more sustainably produced,” says Paul Thoroughgood, a Saskatchewan farmer and Ducks Unlimited agrologist who’s also been deeply engaged in the crop sustainability file.

One factor behind the movement is the desire to avoid bad publicity about real or perceived poor production practices.

“NGOs (non-governmental organizations) are going to put something on the front page of the New York Times about our products,” says Denis Trémorin, director of sustainability at Pulse Canada.

Less pressure on grains and oilseeds

But the sustainability focus is greater on commodities other than grains and oilseeds, Gowriluk points out.

“What sounds like a tidal wave coming is more like a ripple,” adds Trémorin.

He explains the western Canadian crop sector is export-dominated and relies on destinations like China and India, where demand for proof of sustainably produced food is nowhere like that in the West.

Paul Watson, environmental farm plan director with the Agricultural Research and Extension Council of Alberta (ARECA), notes there hasn’t been an urgent need in Canada to respond to sustainable sourcing requirements.

“We are perceived quite favourably because they (PepsiCo, etc.) know that our agriculture practices are very sustainable.”

Gowriluk agrees. “We don’t see the same pressure as you might in other jurisdictions or commodities.”

“We’re well positioned in that we don’t have major environmental issues in Western Canada due to agriculture, especially due to crop production,” says Trémorin.

One of the 38 pages in PepsiCo’s sustainability agenda report is dedicated to its sourcing and milling practices for Quaker Oats.
photo: Pepsico

Few sustainable crop premiums

That might help to explain a lack of programs or premiums grain elevator companies are offering for proven sustainable crops.

Thoroughgood says he recently signed his first ISCC canola contract with G3 Canada, for which he received a $2 a tonne premium. ADM also has an ISCC certification program in Lloydminster for canola used for European biodiesel.

But premiums seems to be the exception rather than the rule.

In 2013 General Mills announced its commitment to sustainably source 100 per cent of its 10 priority ingredients, including oats, by 2020.

Paterson Grain, which teamed up with General Mills to source oats and measure the supply chain’s sustainability, isn’t offering participating farmers a premium.

“Today, that market does not dictate that there is a premium,” says Paterson merchandiser Lorne Boundy. “We incentivize them in other ways — a lot of on-farm time with them and some agronomy work we’re doing.”

Grain Millers, which offers a sustainability grower program for farmers in the U.S. as well as oat producers delivering to its Yorkton, Sask. plant, also offers no monetary incentives.

“We do not pay a premium for being in the program,” says program co-ordinator Jessie VanderPoel. “They do get first-chance access to different programs and markets, though.”

Viterra’s sustainability program offers similar benefits to farmers.

“Enrolling in the program will give you access to new/emerging markets, which will create more demand and movement opportunities for Canadian product,” the company says on its website.

“I don’t think this is a price premium for growers, I think this is going to be an expectation,” adds Thoroughgood.

Trémorin also doesn’t envision farmers getting paid to fill out paperwork.

“It’s not going to be a pure premium; it’s going to be you’re getting a contract that you wouldn’t have been able to get otherwise.”

What’s it all about?

Companies aren’t wholly clear about what they want or how they define sustainably produced crops.

“A sustainably produced crop does not negatively impact the environment,” states Viterra. Its goal is to verify ethical farming and management practices “through a number of different criteria.”

How companies verify sustainability claims varies.

Thoroughgood says Eastern Canada growers producing soy for Europe have a much more rigorous process to go through than what he did for his canola contract. “It’s actually work to get certified.”

Walmart is among the big food companies promising ethical and sustainable practices from all its suppliers.
photo: Walmart

Grain Millers cautions its online questionnaire can take up to three or four hours to fill out. The company won’t share what’s on the questionnaire, but VanderPoel explains the company measures 20 different areas, from food safety, training and competence, to nutrients, water and air.

Paterson’s Boundy, however, says producers can fill in their Canadian Field Print Calculator Excel sheet in 20 to 30 minutes.

Maintaining records

Record-keeping will be a critical piece for farmers wishing to prove they’re growing sustainably.

“The best thing producers can do is around record-keeping, being able to demonstrate that you are doing what you say you’re doing,” says Gowriluk.

But Trémorin says a documentation process is the one key area in which Western Canada lags. U.S. and European farmers are ahead of the curve because they’re required to document their practices in order to receive government subsidies.

ARECA’s Watson says that while Canada is recognized as a sustainable source, it has become more important to demonstrate it.

“Developing systems to demonstrate to the external world we are sustainable takes time, and some delicacy. A lot has been done; much more is in motion.”

Boundy knows farmers can deliver what’s expected of them; it’s just a matter of proving it.

“When we first began, I had no worries about that we would or wouldn’t be sustainable because I know we already are growing sustainably, so it’s simply to have the data to back up that claim when asked.”

What do consumers want?

“What we’re seeing now is the momentum seems to be gaining with respect to what consumers are looking for, and the fact that they are looking for sustainably produced anything and everything,” Alberta Wheat Commission’s Gowriluk says.

One major challenge is defining “sustainable.”

“And I think even consumers grapple with that, what sustainability means to them,” she says.

“Industry and food producers are both trying to appeal to consumer want, but I’m not sure that it’s really clear even in the consumers’ mind what it is that they want,” says Thoroughgood.

Lack of consumer knowledge is a big hurdle.

A 2015 Oklahoma State University agricultural economics food demand survey found 82 per cent of respondents supported mandatory labels on GMOs, but 80 per cent also supported mandatory labels on foods containing DNA.

If people don’t know that every living thing contains DNA, what are the chances of convincing them genetically modified foods won’t kill them?

On the other hand, “If 80 per cent of the population wants it, whether it’s right or not, you almost have to do it,” says Thoroughgood because, ultimately, even when they’re wrong, they’re right: “When you don’t listen to your customer, you do it at your own peril.”

Gowriluk believes farmers and consumers have the same objectives, but with more and more consumers moving away from the farm, there’s a greater disconnect between rural and urban people, and the latter’s understanding of what happens at the farm level and why.

“Based on what we’ve seen with respect to consumers’ definitions of sustainability, it’s pretty broad and it’s all over the map,” she says. “A better understanding of what farmers are doing to reach some of those outcomes is likely needed, but that’s not an easy task.”

About the author

Contributor

Richard Kamchen's recent articles

explore

Stories from our other publications

Comments