CONSULT

Article
March 1, 2025

Decarbonization and sustainability in a time of uncertainty in the agricultural sector

Luis Mira da Silva

Os tempos que correm são, no setor agrícola, de incerteza e de dificuldades. Neste preciso momento acho que não há um agricultor em Portugal que não esteja bastante preocupado. E há preocupações para todos os gostos. O impacto da guerra na Ucrânia, o aumento dos fenómenos climáticos extremos, a falta de água, o excesso de água, as tarifas, a redução dos preços dos produtos agrícolas, o aumento dos custos dos fatores de produção, e por aí fora. Há quem diga que os agricultores se estão sempre a queixar, mas pelo menos desta vez queixam-se com razão. As coisas não estão fáceis, e tudo indica que não vão melhorar.

Agriculture in Europe, and in Portugal “by default”, is an activity subject to enormous political and regulatory influence, which translates into two practical consequences with impact. On the one hand, the existence of various economic incentives, related, for example, to support for investment or the adoption of sustainable practices.

On the other hand, a regulatory and bureaucratic load that conditions almost everything that is done. Ask a farmer what he thinks about the many entities that regulate the sector, or about the time he spends filling out forms, and you won't hear any kind of pleasant words.

It was more or less in this general context that “carbon farming” emerged, and became very relevant in Europe. This should be, in its aspect of an alternative business model, a further and important source of income for farmers in the not too distant future. In recent years, “carbon farming” has been a strong focus of European policy, in the expectation that farmers would be a fundamental instrument in Europe’s bet to build a climate-neutral future in the medium term, more specifically in 2050.

The impact that this could have is indeed extraordinary.

The role that agriculture plays in reducing emissions and removing carbon from the atmosphere, through the accumulation in the soil and in plants, is enormous. If someone is willing to pay for it, and if farmers are able to increase their yields through this route, it is a winning bet. It is therefore not surprising that “carbon farming” has generated a whole new paradigm, with new policies, regulations, measures, certifications, projects, models, and even companies that are dedicated exclusively to this topic.

But there is no such thing as a perfect system. The complexity and procedural burden involved in carbon credit certification are greater than initially seemed, and even worse, at least in the definition of the baseline and monitoring, when comparing agriculture with the forestry sector. The potential for reducing emissions and removing carbon from the atmosphere is unquestionable, but the additionality and the need for the credits to remain in place in the long term have complicated matters. And the prospect of monetizing a ton of carbon in voluntary markets has had better days.

Does this mean that the king will be naked? Absolutely not! Sustainability, climate change and carbon will, and rightly so, remain on the agenda of European agricultural policy.

Carbon is, and should continue to be, a central issue in defining and guiding strategies and practices that promote sustainability in agriculture. However, the focus must change, and the approach must necessarily be more holistic, considering issues such as soil, water, and biodiversity. Moreover, the context has changed, and this time the European Commission She was quick to respond, as is clear from the Vision for the Agriculture and Food in 2040, recently published.

To some extent, the Vision document for the Agriculture and Food in 2040 It proposes a paradigm shift, more oriented towards business. In the context we are in, sustainability must be considered in the short term and within a logic of competitiveness and resilience.

It's hard to think about where we want to be in the future. 2050, When we don't know where we're going to be 2030, We don't even know if things are going to get complicated in the coming months.

In this context, sustainability depends on the vulnerability of the sector, including fundamental issues such as the high dependence on imported production factors (for example, with the prices of fertilizers or animal feed increasing), or the growing difficulties in exporting certain agricultural products (for example, with the increase in tariffs on wine or olive oil).

Reducing external dependence and reducing the risks in the value chain are crucial issues for promoting greater resilience and increasing the competitiveness (and sustainability) of the agricultural sector. Sustainability cannot be achieved at the expense of competitiveness. The two must go hand in hand. The path therefore involves reducing costs by using less fertilizers and pesticides, by valuing products that have access to value chains that pay for the differentiation associated with sustainability, or by spreading practices of soil regeneration and the promotion of biodiversity that in turn further reduce production costs and increase productivity. All of this is associated with innovation and investment, and the necessary public or private funding must be more favorable when it guarantees and promotes sustainability.

Not by chance, almost all of this can contribute to reducing emissions and enhancing the removal of carbon from the atmosphere. If the bureaucratic burden and the costs of monitoring, reporting, and verification decrease, as the European Commission It proposes that, if markets properly value carbon, it could still be an important source of income for farmers. But that cannot be the focus.

For farmers to follow this path, the focus must be on an integrated vision of sustainability, the competitiveness and resilience of the sector, and increasing the yield of agricultural farms. And, for the sake of argument, it would be good to have fewer documents to fill out.