As set out in our report, the industry is at a crossroads, and should not be left to deal with these issues alone. These must be shared by the entire value chain.
The action required to bring this change about rests on a number of key ingredients:
- The agricultural sector should be classified as a critical strategic industry, with a clear government strategy that reflects the holistic food system and set out a long-term vision for the industry. This is not government’s responsibility alone, and a taskforce from across the value chain should be convened to provide practical solutions and market incentives to support action.
- A common set of metrics that defines the environmental outcomes farmers need to achieve must be adopted across the food system: from farms to food manufacturers to retailers. We think the Global Farm Metric provides just such an option.
- Farmers need to be financially rewarded for achieving these outcomes. Government, finance and industry need to work together to design a regime that gives farmers the confidence to make capital investments and adopt sustainable practices.
Other actors within the wider food system, such as retailers and manufacturers, should also support this effort, by offering favourable procurement and payment terms to farmers who make this transition.
The finance sector must play its role, and there is a distinct opportunity to drive these outcomes.
At NatWest Group, we’ll continue to work with government, industry and farmers to provide targeted support across the food system in a way that is comprehensive and scalable, and new and innovative products to incentivise action.
We want to help enact the real, long-term changes needed to provide this crucial and ever-evolving industry with a sustainable and thriving future.
The empty shelves we have seen during 2023, speaks to a vulnerable system where all the supply chain components are not working in harmony. If we are to avoid more of the same headlines over the coming years, as our food system faces volatility and makes the shift to a more sustainable footing, we need to embed a clear strategy that future proofs our entire food system.