AGRICULTURAL SUSTAINABILITY: A FARM MANAGER’S PERSPECTIVE Paul D. Mitchell AAE 320: Farming Systems Management Learning Goals • To develop a basic understanding of company efforts and consumer comprehension of ag and food sustainability • How sustainability is typically defined • Terminology and concepts • What farm mangers can expect • Cool Farm Tool, Fieldprint Calculator • Sustainability Assessments and Frontiers of Sustainability Corporate Agricultural Sustainability • Agriculture and Food are part of the corporate push for sustainability • Most major food companies have announced sustainability programs • McDonald’s, Cargill, Unilever, WalMart, FritoLay, Sysco, Del Monte, Kettle Chips, etc. Corporate Agricultural Sustainability in WI • Focus on energy and waste reduction • FritoLay’s Beloit Plant • 1st food manufacturing plant to achieve LEED gold • Reduced natural gas 35%, electricity 20% and water 50% per pound of product since 2000 • Kettle Chips Beloit Plant (LEED gold plant) • 100% waste oil for biodiesel: saves 8 tons CO2 emissions/year • Reduces gas and electricity by 20%, uses wind power • Reuses 3.4 million gallons of water per year • Removing paper layer in bag reduced material use 20% Commodity Groups • Most major commodity groups have sustainability programs • Innovation Center for U.S. Dairy • National Corn Growers Association • United Soybean Board • National Potato Council • Wisconsin State Cranberry Growers Association Sustainability and WI Farms • Russet Potato Exchange/Wysocki Farms • Responsible Farming: list of “Earth Actions” • Windmill on logo to sell potatoes • Crave Brothers Farmstead Cheese • Sustainable Story: Anaerobic manure digester, text story, news video, press release • “From cow pies to clear skies” Main Point • Sustainability is a big deal & becoming more so! • Ag Sustainability used to be “Alternative Ag” • More mainstream now and becoming even more so • It is now and will continue to impact farm operations • Look at how sustainability is defined and its drivers • What can farm mangers can expect? What is Sustainable Agriculture? U.S. Code Title 7, Section 3103 defines sustainable agriculture: • An integrated system of plant and animal production practices having a site-specific application that will over the long-term: • Satisfy human food and fiber needs • Enhance environmental quality and the natural resource base upon which the agriculture economy depends • Make the most efficient use of nonrenewable resources and on-farm resources and integrate, where appropriate, natural biological cycles and controls • Sustain the economic viability of farm operations • Enhance the quality of life for farmers and society as a whole Agricultural Sustainability • Sustainable agriculture integrates three main goals – environmental health, economic profitability, and social equity – to meet the needs of the present without compromising the ability of future generations to meet their needs. • Stewardship of both natural and human resources • Systems-based, interdisciplinary research and education • Responsibility of all participants in the system • Strategy for dealing with the future, not something you accomplish • Tied to personal values—which leads to conflicts People, Profits and Planet Triple Bottom Line Practical Issues • “People, Profits and Planet” is a grand ideal, but issues remain to make it practical • Have to measure to manage: What do you measure? 1. Life Cycle Analysis (LCA) and Models to estimate environmental impacts or outcomes 2. Certification and Standards: let someone else “define” sustainability, you just follow rules 3. Self-Assessments, self-certification, selfregulating organization (SRO) Industrial Sustainability • Industrial Sustainability: Changes are relatively easy to measure in industrial production processes • Production concentrated in a highly controlled and metered facilities, even for food processing • Companies can make statements about gallons of this or tons of that saved • Frito-Lay: Saved 570 million gallons H2O by recycling in plants, Eliminated 150 square miles of packaging by reducing material use by 10%, Saved 5 million trees by reusing 97% of delivery cartons, • Kettle: Convert 100% waste oil to biodiesel, saving 8 tons CO2 emissions per year Measuring Industrial Sustainability You have to “Measure to Manage” • Industrial sustainability focuses on outcomes because they can be measured in these facilities • Sustainability becomes efficiency oriented • Companies already have economic incentives to pursue efficiency as sustainability • Collect data to measure input use and cost savings, in pursuit of enhanced profitability • Can also claim changes as sustainability improvements • Measurements like these difficult in Ag: random, expensive, distributed over landscape • 1) Models to predict or 2) Practice-based approach #1 Life Cycle Analysis/Assessment (LCA) • Framework to estimate environmental effects of products for sustainability assessment and measure progress— Have you improved? • Examine inputs and activities used to produce the product, then quantify impacts • Examine the outputs created by making, using and disposing of the product, then quantify impacts • Commonly focus on energy consumption, water use waste generated, greenhouse gases/CO2, etc. • Gallons of water or tons of CO2 per pound of cheese • Data to measure or models estimate these values • Never much on Economics/Profit and Society/Community General LCA Graphic Source: http://www.ched-ccce.org/confchem/2010/Spring2010/P3-Haack_et_al.html Agricultural LCAs • Ag Production (http://pubs.acs.org/doi/abs/10.1021/es702969f) • 83% of average U.S. household carbon footprint per year for food consumption is ag production • Food production & distribution = 17% of U.S. energy use • Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food • UW “Green Cheese” Project: Cheese LCA http://fyi.uwex.edu/greencheese/ • Potato & vegetable LCAs for processed vegetables from WI • Many more need to be completed Green Cheese LCA Graphic Source: http://fyi.uwex.edu/greencheese/files/2011/04/10_Passos-Fonseca_GreenCheeseLCA-EnergyGHGIntegratedDairyBiofuelsWisconsin_ASABE.pdf Operationalizing Sustainability • Companies push suppliers (farmers) for sustainable products so company can make claims to consumers to aid their marketing • Companies using sustainability as a way to compete, differentiate themselves, reputation, … • Different companies have different methods and ways to ensure sustainability • Currently a “free for all” with little structure to systems in place, but lots of demands • Farmers at ground zero in the middle of debate • To sell in certain markets, need to be “certified” Ag Sustainability LCA Examples • Cool Farm Tool • Unilever, Pepsico/FritoLay, Sysco, McCain, etc. • GHG (CO2, N20, CH3) emissions (Farm-Level LCA) • Field to Market/Keystone Alliance Fieldprint Calculator for Soybeans/Corn/Wheat/Cotton • Seven part radar plot: Land Use, Soil Loss, Water Use, Energy Use, and GHG, Conservation, Water Quality (Farm-Level LCA) Cool Farm Tool: Case Studies http://www.coolfarmtool.org/CaseStudies Costco Organic Eggs: GHG Emissions FieldPrint Calculator 2011 Example Corn: Summary of Results Per bushel findings: • Productivity (yield per acre) increased 41% • Land use decreased 37% • Soil loss decreased 69% • Irrigation water use has been variable, with an average 27% decrease • Energy use decreased 37% • Greenhouse gas emissions decreased 30% http://fieldtomarket.org/files/Field_to_Market_Background_December_2011.pptx Issues with LCA/Models • Models predict outcomes, they do not measure them • Prediction, not documentation: Many people forget this • Lots of room to improve absolute prediction of outcomes, models often make substantial prediction errors • Modeling approach better for making relative comparisons among policies or changes to estimate effectiveness • Expensive to develop, calibrate, validate and implement: long-term data collection & model calibration • Work at large scales (watershed/region) and long-term averages, not at farm level and for specific years #2 Sustainability Certification (Eco-Labels) • Create standards and certification system • Someone else defines sustainability, you just have to meet the standard • Way to “prove” sustainability for marketing • Fair Trade, Organic, Healthy Grown • Sustainability standards: no consensus among companies and consumers, multiple systems exist with lots of overlap, too many labels for consumers to care • Many companies currently have individual systems • Comparable to GAP/GHP a few years ago Wisconsin Healthy Grown Potatoes http://www.healthygrown.com/ • Farmers and stakeholders defined a standard for themselves in an attempt to capture a market • 3rd party-verified practice-based standards, kind of like Fair Trade, but an “Eco-Potato” • Primarily Pest Management, plus some Soil & Water Quality and Ecosystem Restoration • Had hoped for a market price premiums, but so far none has emerged • Other Examples: Lodi Rules for Wine, Salmon Safe #3 National Initiative for Sustainable Agriculture (NISA): Self Assessment • Many sustainability initiatives seemed to exclude conventional farmers from dialogue and program development • UW faculty and leaders from several farmer organizations started meeting and planning • Farmer response to ag sustainability programs • Create consortium of ag/farmer groups • http://wisa.cals.wisc.edu/nisa NISA Key: Producer Engagement • Farmers bear most of the economic, social & environmental consequences of their practices • Why don’t they help define sustainability? • Work with grower associations & regional experts • How do you want to assess yourselves? • Focus on adoption of science-based practices with proven positive outcomes in their region Desirable Qualities for a Practical Agricultural Sustainability Program • Engages Farmers • Regionally Appropriate • Science Based • Flexible • Cost Effective • Anonymous • Clearly Focused • Enhances • Educational Communication • Complementary with Other Programs • Harmonized • Whole-Farm Oriented NISA Process 1. Regional farmer association leads the sustainability 2. 3. • • 4. 5. self-assessment program with key stakeholders Regional/local experts develop a self-assessment survey: set of “good farming practices” for a crop in a region Farmer population completes the survey < 1 hour to complete, paper or online Soybean, sweet corn, green beans, cranberry, potato,… Analyze data to create industry report for communications Farmer score cards with specific recommendations to improve Annual Adaptive Management Cycle A process to operationalize continuous improvement Sustainability Multi-Year Adaptive Management Cycle and Agricultural Sustainability Continuous Improvement A Grand Ideal, but how do we make it Practical? Time The Whole-Farm Modular Approach Corn Whole Farm Base-Tier Assessment Soybean Cereals Forages Potato Sweet Corn Green Bean Cranberry Strawberry Beef Pork Making it Practical: The Sustainability Data Analysis Problem • Farmers willing to do an anonymous, short, practice-based survey for their farm that they help to develop and about practices they believe in • Many variables for practice adoption: Green Bean & Sweet Corn with Whole Farm has about 170 • Many questions are yes/no answers or categorical variables (discrete variables) • Many practices closely related: pest, disease and weed scouting or soil tests and tissue tests for nutrient management (correlated variables) Example Practices from a Soybean Sustainability Assessment Resistance management, Pesticide & fertilizer handling & worker safety, Ecosystem restoration, Production & management, Community, Crop scouting, Learning and research, … http://www.aae.wisc.edu/pdmitchell/RAFS/SoybeanAssessment.pdf Sustainability Measurement Problem: Data Envelope Analysis with Principal Components • First Principal Component Analysis (PCA) to reduce the number of variables, to remove correlation among variables, and to convert discrete variables to continuous • Next Data Envelope Analysis (DEA) to calculate a composite index to measure how intensely each farmer adopts sustainable practices relative to his/her peer group • Final Output: • Score between 0 and 1 for each farmer measuring intensity of sustainable practice adoption relative to peers with endogenous weights for each practice • Document adoption intensity of farmer population and identify practices to most improve each farmer’s score Frontiers of Sustainability • Key problems analyzing and summarizing results of sustainability assessments 1. Too many questions and practices Principal 2. Practices highly correlated with each other Components 3. How do we compare or rank growers over Data Envelope Analysis the wide range of possible practices? • Principal Components (PC): Reduces number of variables, makes them continuous and removes correlation • Data Envelope Analysis (DEA): Gives single number measuring intensity of grower practice adoption Measuring Sustainability • Lots of math to analyze the practice adoption data from the self assessment to score each farmer: 0 to 1 • Score measures intensity of best management practice adoption compared to peers The Power of Frontiers of Sustainability 25 Number of Farms 20 15 10 5 0 0.50 0.55 0.60 0.65 0.70 0.75 Score 0.80 0.85 0.90 0.95 • Show growers how they compare to each other • Prioritize practices that would provide the greatest advancement toward the frontier • Identify research & outreach priorities at industry level 1.00 Individual Grower Scorecard: Sustainability “Dashboard” Midwestern Green Beans Individual Grower Scorecard: Recommended Practices Midwestern Green Beans Papers by Dong, Mitchell, et al. • Measuring Farm Sustainability using Data Envelope • • • • Analysis with Principal Components: The Case of Wisconsin Cranberry (JEM 2015) Assessing Sustainability and Improvements in U.S. Midwestern Soybean Production Systems Using a PCADEA Approach (RAFS 2015) Quantifying Adoption Intensity for Weed Resistance Management Practices and Its Determinants among U.S. Soybean, Corn, and Cotton Farmers (JARE 2016) Conceptual Framework & Empirical Results for a Practical Agricultural Sustainability Program in the United States (NJAS 1st review) Endogenizing Sustainability in U.S. Corn Production: A Cost Function Analysis (AAEA poster) Non-negative, Polychoric PCA • Use polychoric correlation for PCA because many of the variables are discrete • Use non-negative (sparse) PCA • a controls coordinate overlap • b controls sparseness (non-zero PCA weights) • We used b = 0, as not an issue for our data • Frobenius norm of A = sqrt of trace of A*A Cranberry Non-Negative Sparse PCA Weights uvi PC1 PC2 PC3 PC4 PC5 PC6 PC7 PC8 PC9 % Ac Scout 1.014 0 0 0.001 0 0 0 0 0 Hired Scout 0 0.051 0 0 0 0.078 0 0.008 0.353 Times Scout 0.001 1.012 0.009 0 0 0 0 0 0 Dist Travel 0 0 0.034 0.012 0 0.431 0 0 0 Cultrl Soil Tissue Weathr Pract Test Test Station 0.025 0 0 0 0 0 0.020 0 0 0 0 0.958 0.035 0 0 0 0 0.080 0.605 0 0 0 0.018 0 0 0.029 0.003 0 0 0 0.011 0.001 0.496 0.417 0 0 % Ac Hired Times Dist Cultrl Scout Scout Scout Travel Pract X Farm k=1 75 1 14 324.1 1 Soil Irrg Unifm Nut Mgmt Consrv Emply Emply Safety Moistr Test Plan Plan Recycle Insrnc Retrmt Trng 0.008 0.003 0 0 0 0 0 0 0 0.002 0 0 0.016 0 0.000 0 0.339 0 0 0 0 0 0 0 0.062 1.011 0.007 0.026 0 0 0 0 0.091 0 0.822 0.023 0 0 0 0 0 0 0 0 0.017 0.914 0 0 0.069 0 0 0.728 0.708 0 0 0 0 0 0 0 0.017 0.022 1.014 0.019 0.050 0 0 0 0 0 0 0.707 Soil Tissue Weathr Soil Irrg Unifm Nut Mgmt Consrv Emply Emply Safety Test Test Station Moistr Test Plan Plan Recycle Insrnc Retrmt Trng 1 1 0 1 1 • Final PCA Output: For each farmer k: PCik = 1 1 1 16.7 16.7 SvuviXvk • PC1k = 1.014*0.75 + 0*1 + 0.001*14 + 0*324.1 … • Each PCik is a weighted average of the Xvk for each farmer • Converts V variables into I PCs that are continuous, non- negative and have no correlation between them 1 Cranberry Example: Non-negative PCA: PC4 (irrigation application uniformity testing) vs. PC3 (weather station, soil moisture monitoring) (Dong et al. 2015) 7 6 PC4 5 4 3 2 1 0 0 1 2 3 4 PC3 5 6 7 Data Envelope Analysis (DEA) • Widely used to benchmark performance of individual decision making units (DMUs) against a “best practices” frontier and to create composite indices • Two problems emerge when applying traditional DEA to BMP adoption data 1. Many variables and correlations among them both reduce discriminating power of DEA 2. Uninterpretable convex combinations of categorical/discrete practices • That’s why we used PCA: reduce variables, remove correlation, convert discrete to continuous variables • Needed non-negativity to make sense Basic DEA • Find finds DMU-specific weights wik for the ith principal component (PC) for the kth farmer to maximize each farmer’s adoption intensity score (efficiency) I Maximize Sk (wik ) i1wik PCik , I subject to i1wij PCij 1, wij 0 j • Mathematically equivalent to an input-oriented constant returns to scale DEA model with I inputs and a single dummy output of 1 for all farms k Cranberry Example: Basic DEA (Dong et al. 2015) 7 6 Score = 0.90 PC4 5 4 3 2 Score = 0.70 1 0 0 1 2 3 4 PC3 5 6 7 Common-Weight DEA (Despotis 2002) wi for each PC across all farms (not wik) • Use same weight 1 Minimize h(d k , wi , z ) t K K k 1 d k (1 t ) z subject to S k i 1 wi PCik d k , d k 0, z d k 0 k , I wi 0 i, z 0 • Sk is conventional DEA score, dk is deviation of the common-weight DEA score from conventional DEA score, and z is the maximum deviation over all farms • Math program finds common weights wi and deviations dk to minimize weighted sum of average DEA score and maximum deviation, parametrically varying weight 0≤ t ≤1 I • Common-weight DEA score is S k i 1 wi PCik Recover the endogenous weights Wv for each practice xv • Solve this program for t = 0 to 1 by 0.01 1 Minimize h(d k , wi , z ) t K K k 1 d k (1 t ) z subject to S i 1 wi yik d k , d k 0, z d k 0 k , I b k • Get 101 solutions indexed by t, so average over them 1 T 1 T I I Sk t 1 S kt t 1 i 1 wit PCik i 1 wi PCik T T • Use the principal component weights on PCik Z k v 1 i 1 wi uvi xvk v 1Wv xvk V I V • Each practice now has a weight Wv I 1 i 1 T T t 1 wit uvi / v Cranberry Example: Basic DEA (Dong et al. 2015) 7 6 Score = 0.85 5 PC4 Common-Weight DEA Frontier (t = t’) 4 3 2 Score = 0.50 1 0 0 1 2 3 4 PC3 5 6 7 Category 3 … Category 10 Category 1 Category 2 PCA PCA PCA … PCA Category DEA Category DEA Category DEA … Category DEA Whole Farm DEA • To deal with PCA computational intensity: group practices into categories (nutrient, pest, labor, energy, etc.) • Calculate category DEA score, then do DEA on these scores to get the grand DEA score Dong, Mitchell, and Colquhoun (2015) JEM • Final practice weights were highest for 1. Basing fertilizer applications on soil tests 2. Using cultural controls for pest management 3. Providing safety training for employes Dong, Mitchell, and Colquhoun (2015) (JEM) Scores for WI Cranberry Growers Min Mean St. Dev. 0.55 0.83 0.13 Dong et al. (RAFS) Soybean Assessment Soybean Specific 70 practices, N = 410 Dong et al. (RAFS) Soybean Assessment Whole Farm 145 practices, N = 80 • Leaders at the frontier pulling the group forward • Laggards in the tail pulling group average down Leaders Laggards • How do we help the Leaders to keep getting better? • How do we help the Laggards to improve? • Identify practices that would most improve farmer scores for the group as a whole or at individual farmer level • Help set Research and Outreach priorities for group Impact of the lowest 10% adopting the 10 highest weighted practices Weed Resistance Management (JARE) Weed Resistance Management (JARE) Increase weed BMP adoption • Educated • Smaller • Above avg yields • RR user • Cotton, not corn or soy • Concern for safety and efficacy Average Category Scores by Crop and Region (Mitchell et al. NJAS) Midwest Midwest NY Green Category Sweet Corn Green Bean Bean Community 0.930 0.733 0.611 Disease Management 0.610 0.663 0.823 Ecosystem Restoration 0.330 0.291 0.438 Economics 0.870 0.869 0.887 Farm Operations 0.761 0.731 0.782 Insect Management 0.456 0.555 0.822 Nutrient Management 0.840 0.836 ----Production Management 0.882 0.887 0.911 Soil & Water Management 0.792 0.709 0.904 Weed Management 0.753 0.828 0.725 Whole Farm 0.905 0.887 0.945 10 9 8 7 6 5 4 3 2 1 0 5 4 1 0 0 0.04 0.08 0.12 0.16 0.2 0.24 0.28 0.32 0.36 0.4 0.44 0.48 0.52 0.56 0.6 0.64 0.68 0.72 0.76 0.8 0.84 0.88 0.92 0.96 1 0 0.04 0.08 0.12 0.16 0.2 0.24 0.28 0.32 0.36 0.4 0.44 0.48 0.52 0.56 0.6 0.64 0.68 0.72 0.76 0.8 0.84 0.88 0.92 0.96 1 Disease Management Insect Management 3 20 2 15 0 0.04 0.08 0.12 0.16 0.2 0.24 0.28 0.32 0.36 0.4 0.44 0.48 0.52 0.56 0.6 0.64 0.68 0.72 0.76 0.8 0.84 0.88 0.92 0.96 1 0 0.04 0.08 0.12 0.16 0.2 0.24 0.28 0.32 0.36 0.4 0.44 0.48 0.52 0.56 0.6 0.64 0.68 0.72 0.76 0.8 0.84 0.88 0.92 0.96 1 Histograms of Midwest Green Bean Scores for Select Categories (Mitchell et al. NJAS) Ecosystem Restoration 12 10 8 6 4 2 0 Nutrient Management 35 30 25 10 5 0 Number of Farmers Number of Farmers 8 Midwestern Sweet Corn 7 6 5 4 3 2 1 0 0.70 0.75 0.80 0.85 0.90 0.95 Whole Farm Sustainability Score 6 5 Number of Farmers 5 1.00 Midwestern Green Beans 4 3 2 1 0 0.70 6 Histogram of Whole Farm Scores 0.75 New York Green Beans 4 3 2 1 0 0.70 0.75 0.80 0.85 0.90 0.95 Whole Farm Sustainabilty Score 1.00 0.80 0.85 0.90 0.95 Whole Farm Sustainability Score 1.00 Individual Grower Scorecard: Sustainability “Dashboard” Midwestern Green Beans Individual Grower Scorecard: Recommended Practices Midwestern Green Beans NISA FieldRise • NISA a great concept, lots of traction among farmers • Grant funded • Hard to get traction among companies • Spinoff in a Research Park approach with help from UW’s Law and Entrepreneurship Clinic • FOIA protection for data • Credibility among businesses • Research on campus, business off campus FieldRise.com FieldRise.com What can farmers expect? • To complete paperwork and maintain records for sustainability certification • Focus on practice adoption: environment, economics and social aspects • Data to support metrics (LCAs), on-farm audits • Find a way to make money while doing so • Agriculture has been through this before • Dairy Sanitation • Pesticides • Food Safety Consumer Survey: Preliminary Results • Dr. Chengyan Yue, U of MN, Applied Econ & Hort • Online survey of 10,000 people • Wiliness to buy a can of “Sustainable” Sweet Corn • Varied Sustainability Program along 5 qualities (Conjoint Analysis) 1. Farmer engagement 2. Role of science 3. Consumer access to sustainable food 4. How sustainability is measured 5. How program communicates along supply chain What do consumers care about? • Price: dominates willingness to pay • Measurement of Sustainability • Farmers in program must demonstrate use of sustainable practices • Measures of on-farm practices and consumer buying decisions are used to measure sustainability • Role of Science • Program communicates scientific information to farmers • Program funds science that will increase the sustainability of farmer practices • Farmers’ active participation • Farmers advise program managers on program requirements and activities • Farmers participate to learn what is required to meet consumer demands Sustainability and Farmers • How can farmers take advantage of these trends/demands for sustainability? • Consider it an Opportunity, not a Threat • Innovation to develop new strategies, new alliances, new practices and technologies • Find a way to use sustainably to make money • How do farmers participate in the creation and implementation of sustainability standards? • Get involved with grower organizations at local, state and national level and with ag universities • NISA: Grower Led, Science Based