Agriculture and climate mitigation - how do we achieve the transformation?

The agricultural sector is both a contributor to and a victim of climate change. At the same time, it is supposed to ensure greater biodiversity and the protection of livelihoods as well as fulfil consumers' desire for affordable food. How can the balancing act between profitability and sustainable resource utilisation be achieved under these conditions? The experts at the Dialogue Forum explored opportunities and highlighted the difficulties of the transformation process. 

The agricultural sector is both a contributor to and a victim of climate change. At the same time, it is supposed to ensure greater biodiversity and the protection of livelihoods as well as fulfil consumers' desire for affordable food. How can the balancing act between profitability and sustainable resource utilisation be achieved under these conditions? The experts at the Dialogue Forum explored opportunities and highlighted the difficulties of the transformation process.

Prof Alois Heißenhuber from the Technical University of Munich began by emphasising how complex the topic of agriculture and climate protection is. Agriculture is important in many respects. "As a care-taker, it carries the soil on its hands, so to speak, and as an affected party, it has to live with climate change, but at the same time it is partly responsible for global warming." Excessive fertilisation releases nitrous oxide, which is up to 300 times more harmful to the climate in the short term than CO2. Methane emissions from cattle and cow farming, which also have a strong greenhouse effect, do the rest. 

Heißenhuber explained that there is a whole range of measures that can be taken in agriculture to protect the climate. These include reducing nitrogen surpluses, converting methane into biogas, promoting regenerative cultivation methods and protecting forests. It is crucial to use scarce resources as efficiently as possible and to prioritise those measures that save the most greenhouse gases at comparable costs. The Bavarian Farmers' Association has also summarised a large number of measures in its climate protection strategy, as environmental officer Andreas Puchner from the Bavarian Farmers' Association explained.

Another approach is to promote soil development with the help of so-called humus certificates. Soil-conserving management is rewarded with the sale of these certificates. The slow but steady build-up of humus stores carbon in the soil, creating a carbon sink. These sinks will be essential for the transition to climate-neutral agriculture. However, it is difficult to measure the success of this approach in practice. Furthermore, there is no guarantee that the carbon will remain stored in the soil in the long term. External factors such as droughts or heatwaves, for example, contribute to rapid humus depletion, for which farmers cannot be held responsible. In the worst-case scenario, there is a threat of repayment of funds received. 

Agriculture has made great progress in climate protection, even more than demanded by politicians, emphasised Konrad Schmid, Head of Department at the Bavarian Ministry of Agriculture in Munich. In a sector comparison with transport or construction, the agricultural sector exceeds the targets set. This has been achieved in Bavaria, for example, through the KULAP cultural landscape programme, which rewards farmers who protect the climate. Schmid estimates that around a third of agricultural funding from the EU, federal and state budgets is used for climate protection measures. However, he conceded that agriculture will never be completely free of harmful greenhouse gases, if only because of cattle farming. However, more or better managed forest areas could compensate for this. In Bavaria alone, forests convert around one tonne of CO2 into wood every second.

Tobias Schied, young farmer and spokesperson for the Baden-Württemberg Young Farmers' Association (jAbL), made it clear that not everything is sunshine and roses when it comes to agricultural policy. Although there is sufficient funding available overall, the funds are not distributed in a targeted manner. Heißenhuber also criticises the structure of the EU's Common Agricultural Policy (CAP), which relies primarily on area-based direct payments to farmers. In addition, the CAP is overloaded with conditions and subsidies. Changing this system would require an enormous effort. "But we can't continue with a system that isn't fair, because then acceptance in society, whose tax money is ultimately distributed, will fall."

Another problem is the EU's requirement that farmers should no longer use four per cent of their land for agriculture and be compensated for this. The problem is, firstly, that these set-aside areas are not always ecologically sensible and do not necessarily contribute to climate protection if they are chosen arbitrarily. Secondly, many smaller farms are already working on the edge of profitability and four per cent less yield area means painful financial losses. Andreas Puchner from the Bavarian Farmers' Association attributed the fact that around 40 per cent of the budget for voluntary environmental services was not utilised in Germany last year due to the often unattractive regulations. A high level of requirements and bureaucracy contributes to the lack of attractiveness.

Schied called for land to be leased out more according to public welfare criteria, as the classic model in which children take over their parents' farms is in sharp decline. As a result, a lot of land ends up on the free investor market at high prices, which makes it increasingly difficult for ecologically minded farmers to establish a livelihood. Ownership of agricultural land should be distributed more fairly and not be in the hands of a few. 

The experts agreed that farmers must be fairly remunerated for their contribution to greater sustainability in society, above and beyond agricultural production. Agriculture and forestry shape the landscape in Germany like no other sector. However, pricing on the market is primarily based on supply and demand. "Politicians can intervene here, but only within the framework of what is possible in a social market economy," explained Ministerial Director Schmid. This includes regulations that strengthen the position of producers vis-à-vis retailers. "However, politics alone cannot fix it," environmental officer Puchner was convinced. Producers would benefit more if regulations were put in place along the value chain, such as the Animal Welfare Initiative. Here, agriculture and trade enter into a cross-industry alliance that promotes the quality of life of animals through financial support. Such a system could also be established for more climate protection. However, bait-and-switch offers in retail pose a risk if agricultural products are sold below production costs and depress the price level to the detriment of organic farms. Regulations are also needed here, as consumers cannot be held solely responsible. "The market needs guard rails along the value chain," Heißenhuber is convinced.

Agriculture is facing a far-reaching transformation process due to climate change. As early as 2021, the Commission on the Future of Agriculture set up by the German government presented recommendations for an ecologically sustainable and economically viable agricultural sector, but these were not implemented. "It annoys me that these solutions have disappeared into the drawers for years and are only now being brought out again, I can't believe it," said Heißenhuber indignantly. He also pleaded for more participation from those affected and for more dialogue to resolve the upcoming conflicts: "We need this step to prevent a split in society."

Due to its impact on society as a whole, the transformation must be actively shaped by politicians, retailers, consumers and, of course, the farmers themselves. There is no question that the transformation of the agriculture and food industry requires considerable effort, but it also offers great opportunities.

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Prof. Dr. Dr. h.c. Alois Heißenhuber
Emeritus at the Chair of Agricultural Production and Resource Economics, Technical University of Munich-Weihenstephan

Andreas Puchner
Environmental Officer, Bavarian Farmers' Association

Tobias Schied
Young farmer and spokesman for the Baden-Württemberg Young Working Group for Rural Agriculture

Konrad Schmid
Head of Department, Ministry of Agriculture, Munich

 

Moderation

Renate Bleich
Chair, Munich Re Foundation

The event language is German.

Venue: Room Europe, Munich Re, Giselastrasse 21, Munich

Event time: Wednesday, 8 May 2024 at 18:00