Report: New finance models needed to ‘de-risk' climate adaptation costs on farms

Agriland

a day ago

The processor-farmer relationship offers 'significant potential to drive climate transformation in the Irish agri-food sector, according to a new research report published today (Friday, May 30) by the Institute of International and European Affairs (IIEA).
In the report 'Farm to Finance: The Processor–Farmer Nexus in Ireland's Agricultural Climate Transition', the IIEA said that the sector faces 'unique challenges' in balancing its climate targets against future competitiveness.
But the author of the report, Matthew G. O' Neill, put forward that new 'hybrid financing models' are needed to de-risk investment by farmers because of the high costs associated with climate adaptation and mitigation measures.
He also highlighted that agriculture accounts for 37.8% of Ireland's national greenhouse gas (GHG) emissions, which puts pressure on both processors and farmers in the sector to decarbonise.
The report stated that the credibility of climate action within Irish agri-food systems 'rests on a good monitoring, reporting, and verification (MRV) system'.
In a list of recommendations contained in the report, one outlined that platforms such as Teagasc's AgNav be further developed as independent, farmer-trusted systems, with transparent data governance, consent-based data sharing, and tangible feedback mechanisms to participating farmers.
The IIEA also advised that blended finance models, sovereign-backed transition bonds, and tailored green loan products could be aligned with 'sector specific realities' to facilitate access for smaller farms.
The third recommendation the report made was to promote the fairer distribution of transition costs across the food chain.
It claims that sustainably linked price signals should be strengthened through voluntary and regulatory mechanisms.
According to the report, expanding sustainability incentive structures, integrating technologies with safeguards, and sustaining legitimacy and commitment.
IIEA report
The IIEA hosted a panel discussion about the report in Dublin today (Mayo 30).
Participants on the panel included the Irish Farmers' Association's (IFA) chief economist, Tadhg Buckley, Irish Business and Employers' Confederation's (IBEC) Dale Crammond, farmer and Talamh Beo representative, Ailbhe Gerrard and Agriland, deputy news editor, Francess McDonnell.
IFA economist Buckley believes that the relationship between farmers and processors is 'incredibly integrated'.
He said: 'Something we often don't realise is that the vast majority of farmers in Ireland don't actually interact with consumers.
'Their interaction with the marketplace is through their processor. So the processor plays a huge role in the overall framework.'
'In terms of incentivising farmers to the sustainability challenge, that relationship is absolutely integral, it's the most important relation of all actually, it's the processor farmer relationship,' Buckley added.
IBEC's director of meat industry claimed that processors have to do 'everything they can' to try and advance the sustainability agenda.
He believes the consumer has a significant influence on the relationship between the processor and the farmer.
Crammond said: 'The price (consumers) are prepared to pay for sustainably produced products, my concern would be that there is a limit to that.
'We've seen a very significant increase in the price of beef, but that has created a challenge for the processing sector, in terms of being able to get those returns back in the marketplace,' the IBEC director explained.
Source IIEA
During the discussion on the report Ailbhe Grogan, representing Talamh Beo, also commented on key theme identified in the report highlighted the role that the retailer plays in the food processing chain.
She said: 'With the centralisation of meat processing in larger and larger factories, I would love to see an EU supported and national government supported mobile abattoir for animal welfare that go to the farms.
'I think that there is absolutely a place for decentralising and denationalise things, quite a lot of it.'
'It takes time, it takes effort, it takes input and I would love to see the retailers and the meat processing industry talking with farmers, because farmers would like to have more options for animal kills and and more local processing,' Grogan added.