Major food companies call for EU sustainability benchmarks to boost agricultural supplies and profits

Danone, Unilever, Oatly and McCain are jointly urging the European Commission (EC) to establish common definitions and standards for on-farm sustainability and substantially increase environmental payments to farmers under the Common Agricultural Policy (CAP).

The companies acknowledge that the “triple crisis” of climate change, biodiversity loss and pollution has hindered quality yields and food supply.

Amid these uncertainties, benchmarking sustainability would enable farmers, F&B manufacturers and retailers to invest in solutions that can lower costs for all parties, as the companies note in their statement published by WWF. Additionally, environmental payments would provide young and new farmers with stable and predictable income.

Simultaneously, over 40 civil society organizations, including WWF, have issued a public letter to Christophe Hansen, the EU commissioner for Food and Agriculture, calling for similar measures, including reforming the CAP with a needs-based approach.

“WWF supports phasing out from hectare-based direct payments in order to have more money available for incentivizing farmers to uptake green measures,” Giulia Riedo, sustainable farming policy officer at the WWF European Policy Office, tells Food Ingredients First.

Riedo says eco-schemes, one of the new elements of the CAP 2023-27, are a good tool but their implementation can be challenged by some factors.

“To function as proper incentives, member states should allocate more budget for eco-schemes, so that the payments could also have an ‘income component’ and not only cover the cost incurred and income foregone.”

“We often hear that eco-schemes should also be simple, in order to favor the uptake from farmers. However, their effectiveness should be maintained. They should be ambitious enough to encourage farmers to go far beyond very basic agro-economic practices and above all, pay farmers who go beyond being just respectful of the law.”

Financial incentives

Marta Messa, secretary general of Slow Food, which is one of the signees, agrees that income support within the CAP should be more “focused and equitable.”

“One-third of the EU’s total budget is dedicated to the CAP. To ensure that financial incentives are accessible and effective, the CAP must undergo meaningful reform,” she tells Food Ingredients First.

“The future CAP should prioritize three central objectives: providing targeted socio-economic support to the farmers who need it most, promoting positive environmental, social and animal welfare outcomes for society and creating enabling conditions to revitalize rural areas.”

“It should ensure that active farmers — especially small and mixed farms, young farmers, new entrants and those in areas with natural constraints — receive the help they need to secure a decent livelihood and prevent farm abandonment.”

The companies call for Agriculture Just Transition and Nature Funds to address the financing gap for nature conservation and restoration in agriculture.The calls come as the EC formally sets up the European Board on Agriculture and Food, which will act as a consultancy operation through which the EC will gather policy advice from the industry.

Sustainable farming and consumption

Hansen will present the Vision for Agriculture and Food in the first 100 days of the EC president Ursula von der Leyen’s second mandate.

The F&B companies call on Hansen to deliver a vision that “decisively” helps Europe transition to sustainable farming and consumption and advances the agreements of the Strategic Dialogue on the Future of EU Agriculture.

Other measures mentioned include the setting up of Agriculture Just Transition and Nature Funds, separate from the CAP, to address the financing gap for nature conservation and restoration in agriculture.

The companies note that co-financing and public-private partnerships could be considered alongside this fund, with an equilibrium between private capital and public investment for projects that can speed up farmers’ transition to regenerative practices and thereby restore agricultural ecosystems.

Lastly, the statement draws attention to creating mandatory sustainability criteria for public procurement as “a key lever for change,” helping improve accessibility and meeting consumer demand for healthy food.

CSOs reiterate fair prices

In their open letter, the CSOs highlight five critical areas, including ensuring decent income for farmers and cracking down on unfair trade practices. For instance, the coffee and honey sectors are rife with price insecurity, forcing growers in weak negotiation positions to sell produce below profitable margins.

Messa stresses that the EC should aim higher with financial incentives.

“Payments must go beyond baseline EU legislative requirements and aim for the highest levels of ambition, tied to measurable outcomes. Using robust indicators to assess results will ensure accountability and help drive continuous improvement in sustainability,” she tells us.

Furthermore, the coalition asserts that VAT reductions on more sustainable products can improve consumer affordability and promote a shift to plant-forward diets. However, it notes that this would work only if the cost benefits are absorbed by consumers, not retailers.