Food System Transformation in Turbulent Times

Please introduce yourselves, your organizations and the Good Food Finance Network. 

Diane Holdorf: I am Diane Holdorf, the Executive Vice President for the World Business Council for Sustainable Development, also known as WBCSD. We are a global leading platform of more than 200 businesses that are working to embed sustainability in how we accelerate system transformations for a net-zero, nature-positive and equitable world.

Ertharin and I, along with several others including EAT, the Farm Animal Investment Risk & Return (FAIRR) initiative and United Nations Environment Programme (UNEP) have convened the Good Food Finance Network. It is a first-of-its-kind finance network aiming to bring the whole sector together around what we need to do to fund, finance and transition our food systems.

Ertharin Cousin: It is always good to be with you, Diane. My name is Ertharin Cousin and I am the President, CEO and founder of Food Systems for the Future, an innovative financing platform supporting. We work with entrepreneurs who otherwise would not have access to financing, ensuring that we can achieve an equitable transformation of our food systems.

“Adequate financing is needed to transform our food systems and the Good Food Finance Network was set up to address that financing challenge.”

Many people know me because I also served as the Executive Director of the United Nations World Food Programme and was the former US Ambassador for Food and Agriculture. I am also part of the team of organizations working on the Good Food Finance Network, which is an outcome of the UN Food Systems Summit. We are a global community committed to working together to achieve sustainable food systems that support our environment and health, as well equitable returns for all actors across the food system. Adequate financing is needed to transform our food systems and the Good Food Finance Network was set up to address that financing challenge.

What are the main forces driving the need to transform our food systems?

Ertharin Cousin: The reality is that our food systems emit about 35% of all the greenhouse gases affecting the climate today. The food system is the system that is most vulnerable to the acute changes in our climate across the globe. Without transforming our food systems, we will not achieve our climate goals nor will we be able to feed 9.5 to 10 billion people by 2050.

“Vulnerable food systems affect healthcare, economic growth and the overall nutrition outcomes for many countries around the world.”

Diane Holdorf: We also cannot achieve the UN Sustainable Development Goals if we do not transform our food systems. The food system sits at the heart of many development goals. If we do not get it right, we will continue to see an accelerating climate crisis and the continued loss of biodiversity in nature. Poor food systems also lead to the spread of non-communicable diseases, which adds to societal costs and pressures. Vulnerable food systems affect healthcare, economic growth and the overall nutrition outcomes for many countries around the world. We have to get it right and move quickly towards a more regenerative and equitable food system.

We are coming into a season that is hugely important in the northern hemisphere, which is the planting season. Communities and governments are already ravaged by the costs and effects of COVID-19. The war in Ukraine is going to put more pressure on the system. It will be the equivalent of a global systemic shock. Planting is not going to be able to happen in two of the largest breadbaskets in our world. Ukraine and Russia provide wheat and sunflower oil, among other things, as well as important inputs for fertilizers. This is going to create massive disruptions as well as short-term and longer-term costs and access crises.

Ertharin Cousin: The International Fertilizer Association (IFA) suggested that even before the Ukraine-Russia crisis, 30% of smallholder farmers were projected to have less access to fertilizer for the 2022 planting season. This will result in a reduction in yields that could impact up to 100 million people.

There are also high fuel prices. High fuel prices affect the cost of the movement of food in our global supply chain. Net exporting countries will increase the price of food to net importing countries. Many net importing countries are now suffering from high debt ratios because of their investments, not to mention the losses incurred during the COVID-19 crisis. 

Because of the supply chain challenges that were a result of COVID-19, we are already witnessing higher food costs in both Canada and the United States. The potential for an increase in food prices over the next 12 to 18 months is almost guaranteed. Working families that live on budgets and already spend a higher percentage of their incomes on food will find themselves even more stressed in their ability to purchase the food that is necessary for their families.

What are the top goals we must emphasize in terms of transforming our food systems? 

Ertharin Cousin: We must address access to financing. Access to financing will ensure that countries can do the work necessary to support the transformation of food systems, not only in the developed world. There are all kinds of tools and processes to support the transformation of the food system in the developed world. We must ensure that the right tools are available to the 500 million smallholder farmers around the world who produce 80% of the food consumed in the countries where they operate. Our failure to provide adequate financing will give us a lopsided response to the food systems transformation and result in an inadequate response to climate change and health. Equitability is so important to food system transformation. 

Diane Holdorf: The finance transitions at each point of these complex local and global value chains are going to be key. We need to use different ways of integrating solutions, metrics, investment criteria and risk management to bring financial institutions together across public, private and multilateral sectors. This is not how these groups have historically worked together, but if we do not undertake collaborations with both a regional and global approach, we will never raise the ambition required to get the action we need on these transformations.

What should Canada prioritize in terms of its own food systems transformation? How can it adapt its role within the global food system?

Diane Holdorf: There is no question that Canada is seeing an expansion in its ability to be an agricultural exporter for the world. Climate change is moving the crop belt north from the US into Canada. This will enhance Canada’s standing as a global food exporter.

This does come with some risks that we have to pay attention to. We could see more conversion of land to farms and we should keep an eye on biodiversity. We also want to be on the watch for continued growing emissions. 

Agriculture accounts for about 10 to 12% of Canada’s total greenhouse gas emissions. Half of that comes from the production of agricultural materials that are exported. We need to keep a close eye on this and make smart investment decisions while taking advantage of the fact that Canada has the potential to play an increasingly central role in providing food solutions not just for itself but also for the world.

“Canada should use technology-led intensification tools to support sustainable agricultural production that increases the quality and quantity of yields without expanding the areas under cultivation,”

Ertharin Cousin: The reality is that the global community will increase its dependence on agricultural production in Canada. Canada has an opportunity to do things differently. Canada should use technology-led intensification tools to support sustainable agricultural production that increases the quality and quantity of yields without expanding the areas under cultivation and without expanding the use of water. We need to use the innovations and technology available today to ensure that we have true regenerative agriculture. Regenerative agriculture will produce more and provide support for the Canadian people while increasing Canada’s role in supporting the food needs of the global community. 

What should Canada focus on to best support and position Canada’s agrifood sector in transforming food systems? 

Diane Holdorf: Canada is the fifth largest exporter of agriculture, agrifood products and fertilizer worldwide. We have the opportunity to grow food produced through regenerative agricultural practices and better manage our resources. These have huge positive effects not just within the country but globally as well.

“Canada needs to increase the amount of specialty crops it produces to provide more access to nutritional foods for a broader population.”

Ertharin Cousin: It is also not just how we grow but what we grow. Canada needs to increase the amount of specialty crops it produces to provide more access to nutritional foods for a broader population. Canada needs to lead in this area. We need to ensure that Canada continues to support a robust safety net for its own people as well. This is to ensure that everyone can access the financial resources needed to ensure a diverse diet of good food for their families.