With emissions deeply embedded from farm to shelf and often hard to measure, decarbonizing the food supply chain is one of the toughest challenges facing manufacturers, suppliers and retailers today, but industry stakeholders are testing promising solutions that could offer significant impact if successfully scaled.
Take rice, for example, it feeds more than half of the world, but traditional production is also a major source of methane, which is a potent greenhouse gas.
At DC Climate Week, leaders across industry and policy dug into a key question: How to reduce emissions in complex agricultural supply chains and prove they work at scale. They revealed a fundamental part of the answer, regardless of the ingredient produced, is teamwork between CPG manufacturers and farmers or ranchers.
The scope of the challenge
After fossil fuels, food is the No. 2 source of greenhouse gas emissions – responsible for about a third of GHG emissions, including half of the methane produced, said Richard Waite, director of agriculture initiatives at the World Resources Institute within the food, land and water program.
He explained that while carbon has become the posterchild for GHG emissions, methane is an important focal point because it is 80 times more powerful than carbon in terms of warming the climate.
He added that this distinction earned methane the dubious honorific of “emergency brake climate solution” by Project Drawdown because it can reduce warming quickly while stakeholders work to cut carbon emissions longer term.
While livestock often dominates the methane conversation, rice is a major contributor that is often overlooked. And, because it is sourced for a wide range of products – from side dishes to beer to pet food – it could hold the key to reducing Scope 3 emissions for a range of CPG products.
Rice production emits a lot of methane because farmers often flood their fields or paddies to suppress weeds, but the water blocks oxygen from entering the soil and creates conditions for microorganisms to produce methane, such as when breaking down ‘straw’ leftover from previous crop cycles, Waite explained.
Because rice is a fundamental staple for many people around the world, reducing consumption or cutting it from the diet isn’t an option the same way as reducing consumption of meat and dairy, Waite added. Therefore, he said, suppliers and manufacturers must explore how to reduce its impact in the field.
“Rice is an important staple for half of the world’s population, so this is really about how can we … incentivize farmers to change production practices to reduce rice methane while sustaining or even increasing the amount of rice that is produced for our growing population,” he said.
Scaling solutions to reduce methane production in rice
He added: The good news is there are solutions.
“The first is about trying to reduce the amount of area flooded per unit of rice produced,” which includes boosting rice yields through improved agricultural practices and crop breeding, Waite said.
The second focuses on reducing the amount of time rice fields are flooded, including an emerging practice known as alternate wetting and drying and planting seeds directly into dry fields instead of the more common practices of transplanting seedlings into flooded fields.
“Some farmers are using more water efficient techniques, like furrow irrigation,” he added.
The third category of solutions focuses on soil management, including mixing into the soil rice straw “residue” leftover after harvest or turning it into biochar that can be tilled into the soil later – both of which reduce methane emissions by reducing the food source for methane producing microorganisms when the fields are flooded.
Farmers can’t foot the full bill for transitioning practices
While these practices are effective, adoption depends on incentives, measurement and coordination across the supply chain, which is where CPG manufacturers come in.
One company helping manufacturers and farmers reduce emissions is Indigo Ag, which helps food industry stakeholders adopt sustainable practices via a carbon credit program and Scope 3 reduction programs.
Indigo Ag’s Scope 3 reduction programs helps rice farmers – and others – adopt regenerative agriculture practices, including alternate field wetting and drying to reduce methane emissions and conserve water. In exchange, the farmers receive a premium for their grain.
Why brands and retailers are investing in sustainability despite economic headwinds
Despite rising costs across the board that are squeezing margins, many manufacturers and retailers are willing to pay more for sustainably sourced ingredients as a way to secure their supply chain, explained Brian Segal, a staff data scientist with Indigo Ag.
For example, he noted, Kellanova and Walmart recently partnered with Indigo Ag to encourage adoption of regenerative agriculture practices by rice farmers in Arkansas.
He explained that both companies publicly set environmental goals that the partnership will help them reach.
Kellanova’s Better Days Promise includes goals to promote sustainable and equitable food access and “better days” for four billion people by the end of 2030 compared to a baseline established in 2015.
The partnership builds on work underway by Walmart and Indigo Ag, which has helped rice farmers supplying Walmart’s Great Value brand reduce emissions by more than 37,000 metric tons of carbon and conserve more than 11 billion gallons of water, while also boosting farmers’ pay compared to the baseline set in 2015.
“The Arkansas aquifer is being depleted and it has actually been designated a critical groundwater area by the state. There is just too much water being withdrawn for a variety of different reasons, one of which is agriculture. And within agriculture, one of those reasons is rice. Companies that are interested in preserving the security of their supply of rice and other grains that depend on that supply, that aquifer, have inherent interest in making sure that we’re reducing our use of the aquifer,” Segal said.
Pay out ‘is real’
The incentives for farmers is substantial.
“Across all our growers to date, we’ve paid out $10.3 million and we are projecting to pay $13.7 million through the 2026 growing season – so that is real money,” Segal said.
He added that Indigo Ag will work with companies to reach a range of ESG goals, including implementing science-based best practices.
Beyond rice
Rice is just one example, but it captures a bigger challenge facing the food industry.
As illustrated, the tools to reduce emissions exist. The real test is scaling them across complex supply chains and backing them with data that companies can trust. It also shows that for manufacturers, suppliers and retailers, decarbonization is no longer just a target, it’s a sourcing risk and verification challenge that could define the next generation of food systems
