Energy & Commodities

Planting the Seeds of Sustainable Agriculture With a Circular Economy

Circularity aligns with customers’ expectations about the products they consume. Businesses can meet those expectations by helping consumers find value in their products.

The growth of mindful consumption has empowered customers to make green choices in their spending and eating habits. An estimated 65 percent of consumers indicate that they try to prioritize sustainability when determining which food products to purchase. Often, understanding the provenance of their food—where it comes from, how it was grown, etc.—motivates customers’ choices and their desire to purchase sustainable products. 

The principles of circular economy offer a way for the agriculture sector to support individual consumers. By reducing carbon emissions in production processes, phasing out single-use plastics and providing transparency about food provenance, agricultural organizations can better connect with customers.

Food waste represents a significant challenge in the sector. After all, up to 40 percent of food is wasted each year—representing a loss of $218 billion. The whole sector benefits from supporting consumers in their desire to utilize, rather than discard, all of their food purchases. Mobile apps, for instance, can help the average American family save some of the 1,000 pounds of food they discard every year by empowering them to plan meals that make the most out of their trips to the grocery store.

Applying circular business models can uncover new and diverse commercial opportunities by enabling farms and agribusinesses—companies that support farms and agricultural value chains—to diversify their revenue streams while reducing emissions and waste.

Waste does not have to end up in landfills. Instead, farms can make the most of agricultural waste materials by collaborating and coordinating with external partners. Farmers and growers can optimize profits by selling materials and reusing byproducts to spawn sustainable products, inputs or sources of energy. 

Organic matter are inputs for bioplastics, bio-based fertilizers and biodegradable packaging, all of which promote sustainability by reducing waste and supporting healthy ecosystems. Vines, for example, can be looped back into the value chain and sold as a building material. Since the market for these goods has only grown in recent years, agribusinesses can realize new value in their products by supplying other industries with the materials they need.

One way to unlock value and embrace circularity is by transforming waste into energy. Using anaerobic digesters to break down food that would otherwise accumulate in landfills, companies can use the resulting matter as biofuel for electricity. This natural process thus decreases reliance on energy sources that pollute the environment and repurposes waste into something productive and regenerative.

Some organizations are doing just that with cow waste. One major energy producer creates renewable natural gas (RNG) from livestock manure. This initiative also supports the energy company’s goals to decarbonize over the next two decades, since the RNG it generates has a 100 percent reduction in carbon vis-a-vis traditional energy sources. Smaller organizations can similarly play a crucial role by using cow waste. A dairy puts manure to use by using it as an input for bio-fertilizer, thus promoting sustainable farming practices and generating organic produce.

Adopting circular practices across geographies and sectors can help businesses mitigate supply chain disruption by localizing and diversifying inputs to the production lines. 

Some farms can close their own supply chain loops and maximize value out of their crops. Products and byproducts that are repurposed within on-site value chains have the potential to require fewer resources and investments, which ultimately increases profitability and makes farms self-sufficient enterprises. Corn cobs, for example, can be used as a biofeed for livestock. 

Small adjustments may be necessary to support these new opportunities. In some instances, investment will be needed to repurpose manufacturing lines to accommodate different inputs, though these companies can expect a return on their investment over time.

Circularity also offers opportunities for agricultural businesses to develop partnerships with local organizations. They can provide external partners with raw materials, minimizing the impact that global conditions have on supply chains. In enabling these partnerships, circularity makes business sense by adding value and driving competition. 

Though the food production process generates substantial waste, on-farm waste also contributes to landfills. Reducing this farm-level waste—which includes everything from unharvested crops to machinery that no longer works—both promotes sustainability and offers an opportunity for growers to make their farms more efficient.

Not all the food that farmers grow makes it to the grocery store. Instead, factors such as labor shortages, weather patterns and decreased demand determine that an estimated 20 percent of produce goes to waste. Circular principles could ensure that this food is introduced into other supply chains so that nearly all of the inputs growers invest in lead to profits.

Circular business models can also ensure that farmers get the most out of their equipment. Farmers can retain the value of their equipment for longer periods of time by investing in high-quality machinery, rather than ones that frequently break down or regularly need to be replaced. 

Producers of machinery can help by prioritizing longevity over planned obsolescence when designing products and equipment. In so doing, manufacturers can reduce waste by ensuring that farmers use their machinery for longer. Simple adjustments, like using universal parts that are easy to repair, can also extend the life of machinery and enable farmers to hold onto it longer. 

Manufacturers can also promote ownership and leasing models that encourage farmers to rent, borrow or share equipment rather than own it themselves. This means that farmers would not simply discard machinery when they are finished with it. Instead, manufacturers could disassemble it and reuse parts for new machines.