Growing demand, sequestration present challenges, opportunities

CHESTERFIELD, Mo. — Increasing food production to meet growing demand and the role of carbon sequestration are nearing a crossroad.

“I think we are on the forefront of a new revolution in our industry,” said Berry Marttin, Rabobank executive board member whose responsibilities include the bank’s international food and agriculture strategy.

Marttin was featured in a recent U.S. Soybean Export Council webinar with USSEC CEO Jim Sutter that focused on trends shaping the food and agriculture sector.

Sutter: We hear a lot these days about sustainable finance, sustainable sourcing. How is Rabobank involved in this?

Marttin: When we produce food we emit the equivalent of 12 gigatons of greenhouse gases. That is so important because at the Paris Agreement everybody suddenly woke up to food production and that actually food production is emitting a quarter, one-third or whatever — everybody has different estimates — but it’s around one-quarter of all the emissions. We all know that our populations are growing; wealth is increasing, so the 12 gigatons is going to go to 15, 16, 17.

So, for me, if we want to feed everybody sustainably within the planetary boundaries we need to tackle this and we can because if we look at the 12 gigatons, 6 of the 12 gigatons are actually what we call land use emissions. That’s a very simple thing because the way we farm, the way that we take natural habitats away. That’s emissions that are coming from the man, the conversion that we do to land, which can be tackled.

The other 6 gigatons are our actual food production. Of those 6 gigatons, 2 gigatons are food waste. So, the reality is if we take 12 gigatons and we need to go to 4 or zero gigatons, look at the farming industry by changing some of our practices and thinking different about farming things that we already know from our history.

It’s very easy to get to that net zero they’re talking about. Why net zero? Because that means that we as an industry can actually be positive in the relationship to the challenges that we have as humanity on our planet.

Sutter: Will carbon sequestration payments come in the form of perhaps payments to farmers or financing terms that traders can realize those benefits?

Marttin: Yes, more than that. This is really sequestration of carbon that was already emitted. So, that’s a service because of others have emitted the carbon dioxide, so you’re doing a service to put it in (the ground) again. The reality is that from all the options that we have around is that the sequestration of carbon through the land by no-tilling, rotation, all the things that we know is actually the cheapest way of doing it.

The next alternative is sequestration by taking out of the air and pumping into the ground is most probably as much as $300 a ton. What we can do as farmers are things that don’t even cost $10, $15 or maybe $20 a ton, we are not sure yet because we are looking at it, but that’s what it is.

That’s why I think that we should, as a farming industry, be paid for it. The beauty is that this is a business that we don’t know exactly what it’s going to be. Today we know that we can capture around 1 to 2 tons per acre and more or less an acre can have something between 10 and 20 tons of carbon sequestrated into it. There is a good cash flow there that we have to look at and really looking at this development. It’s going to be a new way of looking at our farm and it’s a new way of creating a new cash flow for our activities and we should be paid for it.

Sutter: People around the world are more interested in how their food is produced and food production’s impact, but we really don’t see many corporate sourcing decisions based on sustainability verification. Do you see that changing and from a global view, what suggestions do you have on how U.S. soy can position itself to be at the forefront as consumers look more toward sustainable and nutritious products?

Marttin: It’s always going to be about transparency and storytelling almost to the combine and the acreage that was harvested and the story of the farmer behind it. If the industry could have that story even if you are part of soybean that becomes cooking oil and meal that can almost be traced back to this is the story of the farmer.

I know that your industry has been able to reduce the emissions for acreage tremendously. I think it’s almost 45% in the last 25 years. That’s transparency and storytelling. The soy industry and the global basis have one of the most efficient inputs in the industry not only for the feed, but also for the vegetable oils. Even if you are vegetarian you still need cooking oils for whatever you’re doing. Even if it’s a plant-based burger you still need vegetable cooking oil to make sure that burger is eatable.

People forget about that because they don’t have the whole picture, so that traceability where you can show where it’s coming from and the passion you have. We need to reconnect the farmer to society, so that traceability, that storytelling is extremely important.

Sutter: Technology and the great productivity gains that we’ve made using technology have allowed production to grow 75% over the last 30 years on a footprint that’s gotten only 25% or so bigger. Will the technology that’s driven the productivity gains continue to be important in the future?

Marttin: Technology will have to change the mind because our technology that we have today was really about how we can maximize yield, but technology is going to change because we will need to have to balance yield with the carbon footprint and the water usage. That’s really going to be the key. The key issue is how can we increase yield, but at the same time reducing the carbon footprint or having plants that have bigger roots so that we can have more carbon sequestration while we are having high yields.

Its technology is going to change in the sense that we also will have to factor in the carbon cash flow because if you think price of nature I do think that the U.N. Food Systems Summit food is going to come at that and we need to use that. It means that there is value for technology to look at better optimization about yields and how much carbon you can sequester.

Also new technologies and new ways of making a crop rotation so you can have more carbon in the land and therefore reduce both the use of fertilizer and pesticides so the whole combination of not looking at one year, but at a five-year cycle so you can maximize your cash flow over that five years, but also maximize the nature positive impact of your activity.

I think we will change the way we are looking at farming in the coming years so we can actually achieve both goals — nature impact and yield growth. We need to increase food by 50% and at the same time we need to reduce the footprint from 12 gigatons to 4 or even under 4 gigatons. Technology is going to be important for that and obviously digitization is going to be important for that. But, more importantly, we will need to use new technologies and especially a lot of new techniques. I think we are on the forefront of a new revolution in our industry.