Ag Retailers’ Role in Sustainability
Authors: Dr. Lourival Carmo Monaco Neto, Postdoctoral Research Associate
Dr. Allan W. Gray, Executive Director and Professor
Dr. Luciano Castro, International Affiliated Professor
Dr. Brady Brewer, Associate Director for Scholarship & Engagement and Assistant Professor
Sustainability is undeniably one of the most important drivers of the new business landscape created over the last few years. Its importance has been taken to an even higher level during the current pandemic, and it is a key factor in what we imagine the post-COVID world will look like.
When we talk about sustainability, we are talking about the triple bottom line, also known as the 3 Ps: People, Profit and Planet. To be sustainable, a company needs to treat its people well, achieve a profitable situation and be mindful and responsible with regard to the environment.
This is even more true and powerful in agribusiness than in most industries, as we are responsible for the production of food, energy, fiber, wood and many other fundamental resources for society. In addressing the ‘planet’ part of the three Ps, an important approach is the adoption of conservation practices on American farms.
Farmer adoption of conservation practices helps reduce the impact of agriculture on the environment. Specifically, these practices help to reduce climate change, water scarcity, land degradation, deforestation and other processes. Adoption rates for specific practices play a critical role in optimizing input usage, mitigating environmental impacts, improving soil health and reducing greenhouse gas emissions.
While farmers may have an interest in investing in the adoption of new practices, they rely on their trusted local agricultural retailer, agronomist or salesperson for information and advice on how adopting new management practices can improve their operation. Therefore, agricultural retailers and advisors farmers trust may have the ability to increase adoption rates of conservation practices by encouraging farmers and providing the information, resources and services they need.
Ultimately, ag retailers seek to serve farmer customer needs and create value they are willing to pay for. Thus, a potential challenge retailers face in influencing farmer adoption of conservation practices may be the lack of a clear value proposition and/or business model, which would allow retailers to create and capture value in assisting farmers with the adoption of these practices.
To address this topic, Purdue University’s Center for Food and Agricultural Business recently partnered with The Nature Conservancy to interview retailers and their farmer customers in order to better understand how both groups view conservation practices, their adoption, benefits, barriers and how these practices can create a business that achieves another P in sustainability — profit. Some of the most important takeaways from this research can be found here.
Beyond the Blog
Learn more about how you as an ag retailer can create value for your farmer customers at the ARA Management Academy. In the interest of safety and to eliminate the need for participant travel, the academy will be held completely online January 26-28, 2021. You’ll have the opportunity to develop your management skill set and sharpen your leadership and decision-making capabilities through managerial courses chosen specifically to meet the needs of managers in the ag retail industry.
Ag input retail is a large and dynamic industry that has faced important trends in the last 10 years, some of which have accelerated more recently due to extreme events such as trade wars and harsh weather conditions. In addition, digital innovations such as internet growth and agronomic advancements in precision farming, married with digital technologies, have pushed the industry to modernize.
We’ve been through a lot this past year and a half. Across the board, we’ve experienced disruption like none of us have ever experienced before. During this time, we’ve certainly made mistakes, stumbled our way through the constant changes and challenges, but most importantly…we’ve prevailed.
In an industry where family values and passion are the driving forces behind the productivity and fortitude of American agriculture, responsibilities tend to be passed down from generation to generation. This tradition has been a typical standard both on the farm and in family agribusinesses, but one special instance lies in academia and professional development tailored to agribusiness in the Funk and Downey families.