Inside D.C.

Climate Change Corporate Challenge

Anyone who’s been on the planet longer than 15 or 20 years can’t deny the weather of the last few years has been odd, and in some cases, a little scary.  Droughts are more widespread and last longer; some parts of the country seem to be constantly underwater.  This summer, at least in Washington, DC, is cooler and wetter than what we expect; last winter was milder.  Our local weather coverage treats summer storms and weather fronts as if the next storm could be our last.

Whether caused by the hand of man or the result of natural phenomena, the climate is “changing.”  Whether the change is a five-year or a 50-year shift, steps to adapt are prudent.  If temperatures are trending higher in your part of the world, then crop production and animal husbandry need to accommodate the change; if growing seasons are contracting, steps must be taken.  Whether you believe in climate change or not, if you’re smart, you mitigate risk.  Look to what works elsewhere and adapt it was a message from Cargill a few weeks ago.

If climate change is part of the planet’s normal weather cycle or the product of industrial greed and indifference, I can’t say.  The scientific community is split. One bunch of folks sure climate change is real, long-term and is a slippery road to perdition without immediate heavy shifts in human behavior are those who man the Climate Data Initiative at the White House.  President Obama has identified climate change as a big part of his personal political “legacy.”

This week media buzzed with news General Mills has new policy to cut greenhouse gas emissions and reduce water use, primarily through “science-based” changes in how its supply chain operates. It is also committed to support “political action” to stop climate change.  No details were given.  At the same time, the White House gathered Kellogg Corp., Mars, Inc., Nestle USA, Coca-Cola, Monsanto and Walmart – the king of corporate sustainability mandates – along with other corporate giants and announced similar “commitments” from these companies on corporate actions, including supply chain requirements.

Whether the White House is talking to farmers and ranchers, i.e., the “supply chain,” in the context of these corporate proclamations is unclear.  If it’s not, the effort is set to fail or fall far short of hoped-for goals.  Assuming the buyer can force the seller to do whatever it is the buyer wants is wrong, and says to me White House climate mavens have never attended a national producer group meeting.

Jerry Hagstrom, publisher of the daily Hagstrom Report, put it this way in his report on the White House meeting:  “The groups meeting at the White House today do not include farm groups, and it would appear some of the commitments corporations are making would put more pressure on farmers and other suppliers to be more efficient in their uses of water and energy.”

This fuels my concern over how food companies and retailers sometimes relate to the farmers and ranchers who supply them.  Corporate mandates to farmers and ranchers never go down well in the country.  Talk to a dairy processor who tried to order dairy farmers to abandon BST, or a fast food chain ordering a producer to abandon a science-based, proven production practice to appease an activist group, with nary a word about cooperation or financial assistance.

If a company is naïve enough to believe it can lock public relations, sustainability officers and ingredient buyers in a room and come up with a pragmatic set of climate-friendly producer requirements, it will find itself over time buying U.S.-grown ingredients from the Third World.  A handful of years ago I sat in a meeting with some of the same companies attending this week’s White House meeting.  We were discussing on-farm practices in the context of a different issue, but I was frustrated to hear one company rep opine, “If farmers don’t want to do it our way, we just won’t buy from them,” or words to that effect.  You could sense others were thinking the same thing, but were smart enough not speak.

This kind of arrogance bares the inherent flaw in the White House formula:  The disappearance of direct, personal and professional relationships between most national and multinational food companies – and retailers – and the folks who supply them.  Perhaps the good news in all of this is that those lost relationships can be recaptured.

My advice to companies is to play this smart.  Approach this climate change mitigation challenge as a partnership with farmers and ranchers, engaging in discussions with farm and ranch groups immediately about what is achievable in the real world and what may be politically or media attractive, but undoable long term.  Do this before, not after the company has developed supply chain requirements.

The economics of on-farm production, geography, whether crop or animal, the ability of individual producers – no matter how large – to adapt or change production practices is limited not only by economics, but by the very force these companies are trying to control – Mother Nature.  Not every prospective solution that looks good on paper or “should work” actually works in the real world.   The cost of prospective solutions if impractical will have to be borne by one end of the food chain or the other.

Note:  President Obama’s Climate Data Initiative and the corporate role therein can be found by going to the White House website:  http://www.whitehouse.gov/the-press-office/2014/07/29/fact-sheet-empowering-america-s-agricultural-sector-and-strengthening-fo