2020 Online Live Event 2: Opening Remarks

Opening Remarks Janez Potočnik, Chair FFA2020, Chairman RISE Foundation

Tuesday, Oct 27, 2020

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Ladies and gentlemen, thank you for joining us today. Thank you also to our speakers, both in the studio, and around Europe.
Once again, we are not able to meet in person as we had hoped to do. With corona cases once again on the rise, I hope that you and your loved ones are safe and healthy.

However, we cannot let such moments of acute crisis overwhelm us. Indeed, we must use them to make the changes in the world due to crisis with deeper roots – a chronic crisis of globalisation and economic transformation – feeding climate change and income inequality and also leading to potential massive unemployment. Our shared history is rich and full of critical turning points such as these. As we continue to grasp with the impact of this pandemic, we cannot allow our focus to only be on tomorrow – we must plan for a sustainable future.
The urgency of the moment cannot be understated. Amidst the stories of elections and new measures, others were unfolding: September of this year was the warmest month on record worldwide , the Arctic sea ice is melting to the levels never seen before, and – according to a new study done by FFA partner the World Wildlife Fund – we have lost 68% of all global vertebrates. We are clearly on an unsustainable course and we must be guided by a new compass.

Today we are supposed to talk about rewarding sustainability in the food system.
Let me put it in perspective and start with the question, what is driving our efforts in organising FFA debates? Good life for farmers in a sustainable farming eco-system, providing access to a healthy food. The economic and food systems we have developed, often with good intentions, are not sustainable, and the change is unavoidable.
Farmers deserve a decent life, where they are rewarded by the market for what they produce, not by automatic subsidies. They also deserve our support in the transition to a sustainable food system – protecting soil, biodiversity, and the climate; these are all changes in their interest. But … also consumers deserve decent life, an income to raise a family, as well as good, nutritious food at reasonable prices.
We are all participants in the marketplace now, and the signals that it sends are mostly driven by price. However, these signals do not represent us fully.

We live in an age of poverty and wealth inequality, all pointing to an undervaluation and lack of rewards for labour. In principle, we agree that consumers and producers should pay the full costs linked to what they buy. However, many around the world cannot even afford basic services like decent food, or access to homes and mobility. Since income and wealth distribution is so unbalanced, we need social and labour policies that make the basics of life affordable. We need to keep people warm, safe, and with full bellies.
However, our future wellbeing absolutely dependents on the natural environment and on the way we manage natural resources. Too many still do not understand that any future economy is totally dependent on accepting that there are hard boundaries to continued life on this planet. Even worse, many more do understand this, but refuse to act accordingly.
Right now, there is no real value for our natural capital; climate change, biodiversity loss, ongoing emissions, and the destruction of the rainforest show that we do not value nature at all. Very often, it makes more economic sense to destroy the planet – it leads to better share prices and higher profits.

It will not be easy, but we must reconcile our short and long-term interests. In many cases, doing so will help resolve many current, very concrete, short term interests. In democracies we rule and govern together through the elected representatives we prefer. Imperfect though it is, this is the voice of the people – and if they do not agree with the decision made, they will raise their voice in the streets and vote us out.

Nature, on the other hand, has no voice and its life and survival depends on the existing level of human understanding and responsibility. When nature disagrees with our behaviour it cannot raise the voice. It protests by dying out and by disappearing from the planet. And yes, the silent voice of nature has been in the recent decades very loud and very clear … but … we still pretend not to hear the silent spring.
Right now we need much more effective and efficient policies that address the core drivers of our problems; inequality, biodiversity loss, climate change. There is no longer room for separate policies on the economy, society, and the environment. We can no longer afford inconsistency or a lack of science-based policy. We have to introduce responsible governance while avoiding hypocrisy. Which leads us again to the importance of market signals.

We cannot and should no longer avoid the fact that the price signals currently do not value the climate, our soil and water, or our biodiversity. Neither is there a full accounting for consumer-facing issues such as obesity and other diet-related illnesses. Another major challenge is related to rebalancing price in our food system and rewards along the food chain. Many actors, including farmers, know that the system they are part of is unsustainable. But they are trapped by existing prices, squeezed margins, and in many cases little control over the market they contribute to. While farm incomes have risen significantly over the last ten years, the family farm income is still only just over 15,000 euro per year . How are they supposed to buy new equipment that saves fuel, time, and reduces emissions? Where does the money come from to buy new filters for livestock sheds? How does it come that a local butcher pays only bit extra for a meat from animals with a high quality of life?

For many years, policy makers have tried to change behaviour through the Common Agricultural Policy and increased regulation. As we can see from the state of our environment, these efforts – though worthy – have not delivered the systemic changes needed. The market signals in the food chain are broken and must be fixed.

Furthermore, we must investigate and develop food system markets for biodiversity protection as well as the climate. While we are slowly creating private markets for carbon storage, for example through tree planting as carbon offsets, these are still minute in comparison to the global challenge we face. In the face of the global wave of forest fires from California to the Amazon to Australia, they are not nearly sufficient.

When it comes to respecting value and the influence of the food system to protect the earth’s wildlife, we are functionally nowhere. Despite a limited number of private initiatives, we have no unified system that tells us how to translate the extraordinary value of our wildlife into a system that can rewards those that help them prosper beyond nature subsidies.

Dear friends, while addressing the issue of rewarding sustainability in the food sector we have to be clear that it is impossible to solve the problems linked to agriculture and food system in isolation. Few quick points worth mentioning:

First: We have to simultaneously address social questions linked to poverty and fairness. We cannot simply march out and demand higher prices from consumers. Transitions should be always managed carefully with most vulnerable in mind. Right now, hundreds of thousands are losing their jobs, taking salary cuts, and even more are facing real insecurity. We cannot ask of them to pay more without making them more secure and well-paid first. This means tackling the gross levels of inequality that have ballooned around the world and also in Europe.

Second, the financial sector should actively contribute to the transition. Risks in finance institutions cannot be any more defined as the short-term rate of return on the money invested, but rather in the context of real risks we face as a society where finance plays an outsized role. Looking beyond the short-term interests is essential not only for the transition of the food system, but also for the stability and survival of the finance sector itself.

Third, all public money should follow public interests, aligned with the needs of the transition following the European Green Deal vision. The opportunity is unique. With the next financial perspective and recovery package we have on the table for the next few years almost doubled regular EU budget and if we act wisely lots can be done. EGD and post-recovery should be seen as two sides of the same coin.
And finally, I’m also aware that Europe is not an isolated island and that the solutions to all the listed question to an important level depend on how we will be able to address the sustainability of food system at the global level, manage the trade flows and create level playing field. Engaging in global partnerships and finding solutions on the globalised markets, should thus be an important part of the future European efforts.

Dear friends, incentives sent to markets, are essential. We cannot send producers and consumers with market signals in one direction and then use the regulation and additional public money to limit the damage done by the wrong market signals. This just leads to a lot of confusion, lobbying and also potentially to conflicts and bad will.

It is essential that signals sent to market players – producers and consumers, farmers and their customers – are aligned with public interests … like providing affordable healthy food, respecting planetary boundaries, using natural resources in a responsible way … and not working against, which is currently many times still the case. Policy makers should create conditions for them to thrive and to jointly shape an economy, which will, by following their private interests, protect also the public ones. This is essential role and responsibility public sector, policy makers and politicians, should play. And while engaging in our economic activities, we should always remain caring members of our society.

Fixing the market signals in the food system is extraordinarily hard and may require some changes which would not be easy to accept. We might have to pay more, consume less, be more conscious of our waste, and become more active citizens. These are not easy challenges, but we are running out of time. If we do not face up to it and fix our broken compass, then the consequences will be unbearable. Not only for the future generations, but already also for us. The current crisis provides us with a moment of fragility enlightenment in which we can make a real change … and we must make it.

I hope today’s discussions will inspire you to ask questions, and consider your own role – as a company, a government, or even as an individual. We all win or lose together. It is not any more about if and what needs to be done, but rather about how we will do it.
I wish you a productive conference and thank you for listening.

Janez Potočnik

Chair FFA2020,

Chairman RISE Foundation


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