How to achieve the agro-ecological transition ? | terra nova

_Graphs : ORACLE observatory of regional chambers of agriculture_ We thus see a potential value-destroying “scissors” effect for farmers with input costs higher and higher, and yields on a

downhill trend because of the impacts of climate change. This tension is not related to transition but to the status quo.   Nevertheless, the transition to an agroecological model may carry

the risk of contradictory injunctions by pushing farmers towards products with lower margins while at the same time contributing to reducing their yield and therefore putting our security

and our collective food sovereignty at risk. Some of this contradiction is true. Some of it is overused by those who support the status quo. But not assuming and therefore not addressing

these potential tensions undermines the credibility of the transformation path and its acceptability to farmers: * THE IMPERATIVE OF FOOD SOVEREIGNTY. It implies an agricultural production

that is sufficient in volume and affordable for consumers while playing a positive role on international markets. On this last point, it is important to understand that our main agricultural

exports include products with high added value and low nutritional value such as wine and sugar – while a large part of our imports concerns animal proteins produced at low cost and with

low environmental criteria such as chicken, (45% of the chicken consumed in France being imported). Similarly, about two thirds of the cereals produced in France are used for animal feed,

which is not enough to feed our livestock because, in the case of France, 20% is imported, mainly from Brazil and Ukraine. Thus, France and Europe are currently net importers in terms of

calories and net exporters of high value-added  products – which means our food sovereignty remains to be built, not defended. * FARMERS’ MARGIN. They are one of the main decisive factors of

farming practices for farmers. They are also constantly compressed by input costs. It is difficult for a farm that is already in a tight financial situation to commit to diversifying its

crops in favour of legumes when the gross margins for wheat in France for instance are 1390 euros/hectare and those for legumes such as peas are 933 euros/hectare in 2022 or 300 euros/ha for

alfalfa in 2019 – a differential of 1 to nearly 5 between field crops and legumes. Nevertheless, if legumes are not economically equivalent to cereal crops, they help, if included in a

rotation scheme, maintain quality soils for the following crops and preserve future yields and thus the high gross margins of the next cereal crops. In a way, they reduce the risk of lower

yields of other crops and allow farmers who choose mixed farming to avoid having to buy animal feed for their livestock and to reduce their needs for mineral fertiliser. * YIELDS. The

reduction of inputs and the transition to more virtuous models, climate- and environment-wise, will necessarily have a downward impact on yields, which will differ depending on crops but

certainly not as much as some European studies have recently suggested. The JRC(the European Commission’s research centre) has tried to model the impact of reduced inputs on the European

production and foresees a fall of 13% to 17% by 2030. Behind this figure lies real methodological limits: the JRC assumes but does not prove a 10%/year drop in yields, while pesticides are

considered as a whole, without factoring in the differences in their effectiveness and risks. Other elements such as genetic selection, trade clauses, uptake of biocontrol agent or new

breeding technics (all being among the policies developed by the European commission) are not factored in. Finally, the impacts on yields of an improved biodiversity (the presence of

pollinators is essential – and in short supply in Europe – for the cultivation of rapeseed, sunflower and soya for example) are not integrated. Other studies, such as the one carried out by

the University of Wageningen, have been commissioned by the “grain club”, which represents the German Cereal Inter-profession and the associated food industry. The scientific soundness of

the JRC study is limited while the impartiality of the others is questionable. The decline of yields is (almost) indisputable but its extent as measured in these studies is largely to be put

into perspective. * AVAILABLE AGRICULTURAL LAND. If the agricultural land, in particular permanent pastures, decreases in Europe in favour of forests and urbanisation, conflicts of use

could be multiplied with the transition. There is indeed a need to ensure a use of space which meets several targets: our carbon sinks objectives as defined by the European legislation

(despite the increase in the size of the forests, the carbon sink is decreasing because of their poor condition);our objectives for the development of organic farming which requires more

space; our objectives for the development of renewable energies (second-generation biofuels to replace aircraft paraffin, agrivoltaics, etc); and our objective to produce more proteins in

Europe to import less. These objectives must be put together in a coherent spatial scenario, which will either reveal potential contradictions to be addressed or show that the risk of

competition in land use is not proven. * TENSIONS BETWEEN THE DIFFERENT OBJECTIVES OF THE TRANSITION. The agricultural transition pursues several objectives such as the reduction of CO2 

emissions, nature restoration, the improvement of water quality, animal welfare, etc. In most cases, these objectives are consistent with each other. Pursing one of them brings us closer to

the others. But the opposite sometimes happens. For instance, conservation agriculture avoid tillage and thus keep CO2 in the soil. It reduces the total number of inputs and in particular

pesticides. Still, it cannot operate without glyphosate to prevent weed competition. It is essential to list these potential contradictions so they can be addressed. What lessons can be

drawn from these potential tensions? The first is that the current agricultural model is itself caught up in tensions whose first victims are farmers. It is factually false to consider that

the existing model ensures our food sovereignty or economic competitiveness and jobs, in sectors which are highly competitive in terms of production costs. Similarly, it is clear that the

agroecological transition improves the general resilience of our agriculture but that its translation into the economic calculation of farmers remains difficult. But this is not enough to

escape from the potential contradiction of the transition. To achieve this, one element is key: we need to reduce the share of processed meat from intensive livestock farming in our

production model and our diet. Indeed, more than two third of the European utilised agricultural area (UAA) and of our cereal production are only used to feed animals. Freeing up a part of

this space is therefore decisive in achieving the objectives of the ecological transition such as the reduction of chemicals, the development of more extensive organic agriculture, etc. A

15% reduction in the most cereal-intensive livestock (pigs and poultry) and a 5% reduction in cattle farming would free up almost 7 million of hectares in Europe – which represents as much

as all fallow land on the continent[4]. Here lies the room for manoeuvre. The reduction of intensive livestock breeding is perfectly possible without additional imports, given the maturity

of technologies capable of producing milk from fermentation in laboratories and able to do it without cows. It is important to say that this statement focuses only on intensive livestock

farming, where animals are massively fed by cereals and turnips of sunflowers – in addition to conventional fodder. On the contrary, the presence of cows to maintain grassland and store

carbon, to provide organic fertiliser in mixed farming is a strong objective of agroecology. Less but better livestock farming and better distributed over the territories, is a key condition

for a successful ecological transition of agriculture. INDIVIDUAL VERSUS COLLECTIVE PERFORMANCE The notion of yields needs to be clarified: individual inputs may decrease while collective

yields increase thanks to the increase in UUA available for other crops, as well as nutritional yields thanks to the health benefits of a lower processed animal protein diet. The levelling

off or the reduction of yields due to climate change put the current intensive agricultural model at risk without producing better collective yields. On the contrary, the transition can

generate a pathway that reduces some individual yields while being more effective and resilient on a collective level. PESTICIDES AND RISKS Finally, the topic of yields and the use of

inputs, in particular pesticides, should be put in a framework that integrates health risks, which tend to be regularly minimised, both for human and animal health, and in particular for

pollinators (bees, bumblebees…). Several studies link pesticides exposure to the development of prostate cancer, Parkinson’s disease or some haematopoietic cancers and an increased risk of

leukaemia in children. The figures for flying insect populations and pollinators are in free fall, as we have seen already. Europe has already lost almost 80% of its insect populations since

the 1980s. In addition to this bleak assessment, the cocktail effects of the co-formulants used in the manufacture of pesticides are not fully analysed (or not analysed at all), when they

are authorised for marketing. The EU Court of Justice indicated in 2019 that this was not in line with EU law and that it would undoubtedly lead to a legal battle in the months and years to

come. There is therefore a high probability that the cumulative impact of pesticides in our bodies and in the ecosystems is greatly underestimated. Behind the notion of “producing more” or

“feeding the world” lies “ready-made” ideas which need to be deconstructed in order to address the complexity of the transition, to overcome the visible limitations of the current European

agriculture model and to focus on the economic conditions for change. 2. ADDING UP CHANGES IN PRACTICES AND TECHNOLOGIES RATHER THAN OPPOSING THEM As it is often the case with the ecological

transition, part of the public debate opposes, on one hand, those who are betting everything on technologies (gene editing, robotics, digital technology, precision farming, etc.) and those

who are betting everything on changes in agroecological practices. And as it is often the case, if we want the transition to be successful, we need to combine both approaches. Let us take

the example of biocontrol. These techniques make it possible to reduce the use of chemical pesticides by using pheromones or the action of other insects that will produce similar results as

synthetic inputs without their harmful aspect for health and environment.   Adding up the solutions rather than opposing them makes it possible to imagine major compromises to be made with

the agricultural world and its economic actors. Let’s take two examples. Access to water has become – and will become every year more so – a key issue. In this context, two pitfalls must be

avoided: the first one is the headlong rush of farmers to try to secure their access to water via super basins while keeping a production model based solely on irrigation to produce animal

feed for export, which is incompatible with the upcoming water stress. The second pitfall is not to provide secure access to water for farmers who are changing their practices and therefore

putting themselves at risk, on their yields for example, by changing crop varieties or by switching to conservation agriculture to improve water retention in their soils. Henceforth, the

path of transition is to make access to the resource, such as super basins, conditional upon concrete, measurable commitments to practice changes that will then enable water to be saved

eventually (for example : more water efficient crop rotation and varieties). This is the only feasible path for the basins themselves, as without changes in practices or associated systems

they will be largely insufficient in a context of sustainable scarcity of resource. A second example has to do with the new genomic technologies (New Breeding Techniques/NBT). These differ

from GMOs because they do not involve transgenesis via foreign DNA. But they also differ from current techniques to the extent that they make possible the emergence of genetic features that

would probably have been very difficult to express through conventional varietal selection. These NBTs are seen by some in the agricultural world as a solution for reducing the needs in

water or for disseminating varieties that are more resistant to certain pests and pesticides. This was already the case with GMOs. However, the vast majority of GMOs on the market only aim

to grow a plant that is resistant to the chemical pesticides supplied by the same company that sells the GMO seed. However, NBTs can indeed provide part of the solution to create varieties

adapted to a recurrent water stress or to higher temperatures. In this context, rather than rejecting technologies out of hand or accepting it unconditionally, the useful path to transition

is to condition the marketing authorization on a criterion of usefulness to the transition (authorized if it allows for a significant reduction in pesticide use, not authorized if it leads

to the use of more of them because the plant becomes resistant to very high exposure to pesticides, for example) and a criterion of traceability. Moreover, since these NBTs can make it

easier to reduce pesticides consumption, there is a clear path to follow: the authorization under the “Green Deal” conditions of NBTs must go with the effective reduction of pesticides by at

least 50% by 2030 in Europe. The great compromise will also involve creating favourable economic conditions for an agroecological supply. While for technological solutions, the challenge is

to produce them at an affordable cost for farmers, for changes in agricultural practices (systematic cultivation of legumes, significant increase in the number of rotation per farm, double

cropping per plot, reintegration of mixed farming, etc.) the issue is more related to the presence of a suitable industrial apparatus (specific silo for legumes, small local slaughterhouses,

hemp processing factory, etc.). This complementarity between an affordable technological offer and a coherent primary processing industrial fabric will make it possible to solidify both

legs of the agroecological transition. 3. ACTING AS EUROPEANS, A CONDITION FOR MORE IMPACT AND ACCEPTABILITY In the last few years, the agricultural transition in Europe has regularly faced

differences in the regulatory requirements among European and non-European competitors. The extremely strong integration of the European agriculture in the world economy makes our trade

doctrine one of the conditions for the success of the agroecological transition. THE EUROPEAN LEVEL TO ENSURE IMPACT AND ACCEPTABILITY The topic of pesticides has particularly drawn

attention. Thus, when a neonicotinoid molecule such as thiamethoxam is banned in Europe but almost systematically benefits, in practice, from emergency exemptions among in Romania, Belgium

or Italy for example, this creates unfair competition which is difficult for farmers from other Member States to accept. This proves acting as European directly has the advantage of linking

efficiency[5] – one rule for all -, impact on a continent scale and reduction of polarisation. The European level is therefore the right one to define pesticides reduction targets by Member

States as well as biodiversity restoration goals, which would otherwise be considered as regulatory attacks on national agriculture. CONNECTING CLIMATE, ENVIRONMENTAL AND TRADE RULES TO

AVOID PUTTING OUR AGRICULTURE AT A DISADVANTAGE COMPARED TO THE REST OF THE WORLD This internal doctrine is also valid externally : trade policy’s modalities are part of the conditions for

the success of the transition to agroecology. The trade agreements negotiated by the European Union have systematically been opposed by the agricultural world for one reason: the lack of

fair competition between farmers and therefore the indirect promotion of an agriculture production system with lower social, environmental and climate standards. The example of Mercosur is

particularly telling because the agreement as it stands does not provide the necessary guarantees to ensure that animals imported from Brazil are not fed with bone meal banned in Europe or

that the use of antibiotics on livestock is aligned with European practices. The first step is to make a difference directly in the trade agreements we sign. The EU-New Zealand trade

agreement negotiated with Jacintha Arden’s government connects for the first time the international climate rules – the binding elements of the Paris Agreement and the trade rules. It gives

one signatory the possibility to use a graduated and targeted sanction regime in case of non-compliance with the climate commitments of the other. This is a significant step forward because,

up until now, there has been no gradual sanction mechanism on climate and environmental issues in trade agreements signed by Europe; only existed the possibility to “blow up” the entire

agreement in the event of non-compliance with the commitments of the sustainable development chapters (the parts of trade agreements containing environmental and climate clauses). Of course

this clause was the “nuclear option” and was never activated because it would have meant a unanimous decision by the Member States. The doctrinal breakthrough reached with the EU-New Zealand

agreement is major and should infuse all new European trade agreements. It acts indeed as an efficient tool in the implementation of the Paris Agreement, which is unprecedented in trade

law. However, it does not solve everything from the agricultural competition point of view: first of all, biodiversity and environmental issues are not treated at the same level as climate

issues, as there was no strong international agreement on biodiversity at the time of the signature. The recent Montreal agreement at COP15 may provide an interesting legal basis, for

example to insert into our trade rules the commitments on pesticide reduction or nature restoration. Secondly, because it is likely that the diversity of agricultural models will always

generate differences, which will be perceived as inequalities of treatment, such as the fact that New Zealand’s vast territory allows for much more extensive livestock farming than Europe’s

one does, with less impact on climate and biodiversity. USE THE SINGLE MARKET TO IMPOSE RECIPROCITY CLAUSES IN ORDER NOT TO IMPORT AN AGRICULTURE WE DO NOT WANT Strengthening the European

trade policy goes hand in hand with using the European single market as a tool for promoting our high level standards. This is what we are defending with the reciprocity clauses. They belong

to the conditions for the success of the transition to agroecology because they address on one side the ask of farmers to be treated fairly in the international competition which can be

sometimes unfair to them and on the other side they address the risk of “food leakage” through an increase of our imports to compensate the decrease of our food production due to the

transition. In this context, Europe has already taken measures, some of them radical, which demonstrate its desire to influence globalisation. The European regulation on deforestation

adopted in 2022 is a perfect example: no economic operator, European or not, can place wood, soya, coffee, cocoa, rubber, palm oil, paper or meat on the European market if they cannot prove

that their products do not come from a deforested area after 2020 thanks to satellite GPS data. For beef, the origins of the feed used will have to be documented and in two years, we will

review the legislation to assess whether it is also possible to require the satellite images for the feed of the animal concerned. In other words, it will be impossible to import soya from

deforested areas and increasingly difficult to import beef fed with soya from deforested areas.  Besides the clear environmental and climate benefits, this obligation represents an important

economic opportunity for the European protein plan deployment, which will help us produce at home what we currently import on a massive scale, and stimulate the return of plant proteins in

farm rotations. Here is another example of a recent positive evolution in European law: in January 2023 the European Commission defined two mirror clauses for two neonicotinoids banned in

Europe, clothianidin and thiamethoxam, of which no residues will be tolerated on our imports (mainly soybeans and cereals from Latin America, Canada and Ukraine). With these two measures,

Europe has set a milestone that must be pushed further tomorrow. From 2024, the Commission will have to review the law against deforestation to cover more ecosystems and more products

especially animal feed like maize. It will also be necessary to generalise this principle: “pesticide substance banned in Europe equals residue limits on imports lowered to the detectable

minimum”. But in both cases, the European software has clearly started to change and to come closer to the legitimate expectation of farmers to stop importing agriculture that we do not want

at home. These breakthroughs must be monitored on the ground by customs. The EU regulation on deforestation has shed light on the differences in border controls among European countries for

wood products, but especially on the low level of conformity check for these products with European legislation (examples: Germany controlled less than 1% of its wood imports in 2020 

against the risk of deforestation, while France controlled only 0.2%)[6]. Similarly, the European Commission’s services responsible for auditing compliance with health legislation in the EU

and by countries importing into the EU are made up of only 160 people. So at a time when Europe is significantly tightening up the conditions of access to its internal market through

increasingly strict legislation, stewardship does not yet follow. This is why it would be useful to create a Green Deal Frontex. This mechanism would have the merit of avoiding the negative

competition between the major ports of entry to Europe, which might be tempted to connect the maintenance of their competitiveness and attractiveness with a looser implementation of

legislation. It would ensure greater confidence in the whole policy equation: better trade agreements, more qualified access to the internal market and an effective capacity of control. 4.

PUTTING THE NORMATIVE BURDEN ON THE WHOLE VALUE CHAIN AND NOT JUST ON THE FARMER SETTING UP A REGULATED MARKET OF CARBON AND OF BIODIVERSITY APPLIED TO THE REST OF THE AGRICULTURAL VALUE

CHAIN Agricultural policies mainly regulate the production at farm level and not the whole agri-food chain. Reducing pesticides, improving animal welfare, reducing water pollution, reserving

space for nature, etc. are all necessary objectives, but for the time being they only weigh on the farmer. However, farmers are most of the time the most constraint person in the value

chain, caught between a bank loan to be repaid and a commercial contract (directly or via the cooperative) with a food processor industry who does not necessarily take the environmental

objectives into account. It results a situation sometimes difficult to bear for farmers who do not have the means to move alone. On the contrary, there is no binding environment and climate

standards for the major economic players in the value chain, from cooperatives to distributors. When a company like Danone sets itself a CO2 reduction target or positive nature impact

target, it is only on a voluntary basis. This is a strong difference from other major CO2 emitting sectors. The main European industrial companies (11,000 sites) are covered by the European

Emission Trading Scheme (EU ETS), basically a regulated carbon market, which sets an annual emissions ceiling and an annual rate of reduction of this ceiling. It is a green planning tool

which has just been reformed in December 2022 to align its field with our new 2030 and 2050 climate targets. Car manufacturers are subject to newly revised CO2 emission rules meaning they

can only legally sell zero emission cars from 2035. None of this exists for the key economic players in the food value chain. We need to put an end to this situation, invent a new tool which

to regulate these actors and to put them under a CO2 emission reduction constraint while  and making a positive contribution to the restoration of nature. It could be an equivalent to the

EU ETS for food processing industries, pesticide and fertiliser producers, cooperatives, large distributors for their own brand. Such a tool would have several key advantages: * Mainstream

the climate and biodiversity rules on the whole value chain instead of placing the burden mainly on farmers * Create financial value through the existence of a mandatory carbon market, which

could set the carbon price at around 70 euros per tonne (halfway between the price of the industrial market, which is around 90 euros, and the voluntary market, which is around 20–30 

euros). This 50/70 threshold, according to analysists, provides an economic rationality to changes in agricultural practices, for example to store CO2 in a meadow rather than destroying it

to grow cereal crops. The definition of this credit would refer to the ‘carbon removal certification scheme’ currently being negotiated by the Parliament and the Council in order to have a

transparent and harmonised definition, which links climate and biodiversity issues in an operational manner. * Since most of the CO2 emissions and biodiversity impacts of these companies

come from their agricultural sourcing, the reduction targets for them can only be achieved by financing them on the farm and therefore by transferring value to the producers and not just

constraint; * Harmonise the conditions of competition with imports via a similar system to the carbon adjustment mechanism at the borders (CBAM). This mechanism was set up for industries

covered by the EU ETS as part of the fit for 55 package. It could not be set up for agriculture precisely because there was no similar internal emission trading scheme. Such an ‘ETS food’

would change the situation and would respond to a strong demand for fairness from our farmers. The creation of such a tool could be launched by the European Commission. It is reasonable to

consider an entry into force around 2026/2027. This would be all the more logical as the companies concerned will be obliged from their 2023 financial year onwards and their 2024 reporting

period to make public their transition plan aligned with the Paris Agreement over their entire value chain (scope 3). On the basis of this information, it will therefore be possible to

calibrate a market (cap and trade) that aligns business’s CO2 emission reduction objectives consistently with achieving the European Union’s 2030, 2040 and 2050 climate and biodiversity

objectives. SHARING THE RISK OF AGROECOLOGICAL TRANSITION BY WEIGHING ON THE ECONOMIC BEHAVIOURS OF OTHER KEY PLAYERS IN THE AGRICULTURAL CHAIN In most cases, the regulatory requirements for

farmers do not apply to the actors in the chain who buy their products or sell them inputs. As a result, a processing company is entitled to refuse to buy from a farm that has taken the

risk of transition because the former has less visibility on the exact volume of products this farm can supply, on the exact biochemical composition of the product, etc. Indeed, if a farmer

decides to change a cereal seed X in favour of another one because it would be more resistant to water stress for example, it is possible that the transformation of this cereal will be more

difficult, will not have the same nutritional content, the same textural properties, etc. Yet these elements belong most of the time to the ‘security’ of the business model of a food

processing company. On the basis of the climate transformation plans required by the European Corporate Sustainability Reporting Directive (CSRD) legislation, it would therefore be

appropriate to implement agricultural transformation plans for those players in the agricultural chain: * FOR BUYERS OF AGRICULTURAL PRODUCTS, it would mean to demonstrate how the company

sources and carries out its investments in a manner consistent with the main European environmental objectives (reduction of pesticides, restoration of nature, reduction of nitrogen losses,

etc.) * FOR INPUT SELLERS, whether large industrial groups or agricultural cooperatives, it would mean to demonstrate how their business model is changing from one based on the sale of

synthetic inputs to the sale of biocontrol products, precision agriculture and agronomic training. The legislation on sustainable use of pesticides currently being negotiated at the European

level could serve as a receptacle for this risk (and effort) sharing approach to agroecological transition. 5. ORGANISING THE DE-RISKING OF THE TRANSITION All transitions involve changes.

And these changes involve risk-taking and adjustments within the value chains. In order to make these changes successful, it is therefore necessary to define the path that leads from point A

to point B and to organise the de-risking of the transition. ‘De-risking’ comes from the finance world and refers here to all the strategies for reducing the risks of agroecological

transition. Managing this risk is all the more important in the field of agricultural transition as agricultural activity is by nature particularly exposed to risks (climatic risks, disease

risks, market risks, geopolitical risks, etc.). The agricultural profession has therefore long been organised to manage these risks, through the cooperative system for example. Pesticides

are also a powerful de-risking tool. They are sold as yield insurance. Going organic, reducing pesticides, means taking risks. But it also means reducing others. A mixed farming farm is much

less exposed to geopolitical risks that can jeopardise the supply of animal feed. A farm which diversifies its crops is less exposed to market risk or disease than a farm with intensive

monoculture or with very few different crops on it. In order to make a success of the transition, it is therefore necessary to identify the risks, to analyse how they are covered today and

to put in place new mechanisms, and adjust of existing ones such as insurance. For example and without being exhaustive, the main de-risking mechanisms to be mobilised are: * TECHNOLOGIES:

Farmers are legitimately seeking to use available technologies to limit their exposure to risks. This is part of the solution, provided that the interest and risks associated with these

technologies are assessed. This is the direction of the path mentioned above with regard to the NBTs or basins, which are two de-risking tools. Digital technologies, precision technologies,

drones, biocontrol, etc. are all tools that can help reduce the risks linked to water stress and the use of synthetic pesticides. * DIVERSIFIED FARMING PRACTICES ASSOCIATED WITH CROP

ROTATION: multiple crop rotations limit the economic risks for a farm by reducing the impact of a single pest on the profitability of the whole farm, while crop rotation improves soil

quality and strengthens plants possible pests, thus limiting the risk of losses for the farmer. * INSURANCE: as in all sectors of the economy, the obligation to insure beforehand makes it

possible to mutualise crisis management. Insurance must continue to be adapted to take into account the growing impact of climate change. * “OFF-TAKE” COMMERCIAL CONTRACTS: a good way to

reduce the financial and economic risk for producers is to have sold their crops before they have even been produced! In the case of some crops, which are both useful for transition and

sought after by the market, such contracts make perfect sense for both parties. They provide financial security for the producer and security of supply for the buyer. These off-take

contracts are to be linked to the action of local authorities which, via school canteens, can have a driving effect and secure a local agroecological supply, particularly in organic farming.

*  FINANCIAL PRODUCTS: the derivatives used by arable crop sectors are tools for de-risking price volatility. They are sold as de facto insurance by financial market players. This is valid,

for example, to protect against exchange rate risks for exported production or against the risk of volatile commodity prices. * PUBLIC AID SUCH AS THE ORGANIC CONVERSION PREMIUM: going

organic implies taking risks on yields. In the long term, the margin increased by both the reduction in input consumption and the market bonus makes it possible to compensate, or even

overcompensate, for the loss of yield. However, during the first three years, before being able to sell under the organic label, the net result is negatively affected, justifying the use of

public de-risking tools such as a conversion premium. This type of mechanism could be extended to other types of conversion (de-intensification of livestock farming, increased crop

diversification, etc.). Articulating these tools to reduce all the risks associated with the transition and never leaving farmers alone to face these risks is a decisive element in making

change possible and acceptable. The organisation of these de-risking mechanisms does not happen spontaneously, it implies that all the actors concerned develop them and that public

authorities ensure that these processes are there to accompany the higher risk taken by farmers. Finally, it is important to think in terms of a de-risking mechanisms basket – as there are

many risks and very different production situations. Focusing only on the technology/finance pairing on the one hand or changes in practices and public aid on the other, will not address all

the problems. A broad and pragmatic approach is therefore a key to success. A. A TOOL : TRANSITION CONTRACTS The ecological transition must be organised. It is planned, not in the sense

that everything is written in advance somewhere at Ministries of Agriculture and all you have to do is press a magic button, but it is planned in the sense that it is thought out

collectively, it is negotiated and it is contractualized in order to remove obstacles, one by one, . In order to align the players, to create confidence, to reassure them that the State, the

local authority, the banker or the buyer will indeed “play ball”, it is often necessary to formalise the commitments in transition contracts. Let us give some examples of blocking

situations that can only be overcome by contractualization: * When a farmer is heavily indebted, debt renegotiation can be done through a transitional financial contract that involves at

least the farmer, his/her bank and the public authorities. The latter can guarantee part of the new risk taken over by the bank in the context of a change in practices that are beneficial to

animal welfare or de-intensification. * In a large-scale farming area, farmers want to introduce more crop diversity by devoting part of their UAA to the production of plant proteins.

However, there is no silo-type infrastructure for storing leguminous crops because the cooperatives that often own the silos are not sufficiently economically interested. Without this silo,

diversification is impossible. It is therefore necessary to contractually invest in a silo with these farmers whose funding can be supported by the buyers of these leguminous crops (large

groups such as Bonduelle, for example) and by public authorities, because this diversification fulfils at least two public policy objectives: greater protein autonomy and restoration of

biodiversity * The deployment of agricultural renewable energy shifts value to farmers by entering a new market that was previously held entirely by large energy producers. It is an

additional activity (not a substitute), which only involves contracts with energy operators. There are many examples of blockades which need to be removed (lack of slaughterhouses, which

hinders the transition to a mixed farming system, lack of contracts to structure biosourced sectors such as flax or hemp in conjunction with building operators, etc.). These contracts and

the organisation of the sectors they imply are at the heart of a planning and negotiating method without which the micro-economic complexity of the transformations to be carried out leads to

a far too slow pace of implementation. B. A CLEAR OBJECTIVE: TO CREATE VALUE IN FARMERS’ ACCOUNTS Transition is often perceived by farmers as an additional risk to their income, for example

with the associated decrease in yields. However, there are good reasons to believe that more transition means more income for farmers: fewer inputs to pay for, a new market with

agricultural renewable energies, the valorisation of carbon storage in grasslands and arable land, shorter circuits and therefore higher margins, ecological intensification of each hectare

with mobile solar panels that become shading systems contributing to adaptation to climate change, or the development of intermediate crops  to replace kerosene, feed methanisers, etc. To

overcome this risk, a financial value should be assigned to each of these practices in order to clearly link risk-taking and additional remuneration. Labelling such as Label Rouge in France

is a step in this direction, as it makes it possible to connect concepts such as “less but better”, animal welfare and a higher market return. If all this were not enough, then it would seem

legitimate to examine the implementation of a “transitional guaranteed income” that would, for example provide the farmer in transition with an insurance policy of no loss of income for a

period of 3 or 5 years. 6. THE FUTURE CAP 2028–2034 For many farmers, the CAP is a central financial instrument for farm viability, whether through direct income support or investment

support. The new CAP in place for the period 2023–2027 has started to move away from a philosophy of payments based on farm size towards one based on the ecological value of practices

carried out on the farm. From now on, 25% of the direct payments received by farmers will be conditional on additional environmental requirements, which for the EU represents an envelope of

around 75 billion euros over the period. It should also be noted that the new CAP contains an obligation to be consistent with the Green Deal legislation for the climate and the environment,

which means that the national plans drawn up by each Member State will have to be in line with the EU 50% pesticide reduction target for example, once this has been definitively adopted at

the European level. This is already the case with the new climate target in the European land use legislation (LULUCF, adopted at the end of 2022). This governance and consistency measure

provides a useful reminder to avoid too many discrepancies between our agricultural and environmental objectives. However, this CAP was proposed in 2018 by the European Commission, before

the European Green Deal existed. We have only been able to modify it within limited room of manoeuvre. This does not yet allow us to respond to the conclusions of the European Court of

Auditors which has repeatedly criticised the poor environmental performance of the previous CAP. Several streak of work can already be put on the table to make the next CAP, whose design

will begin in 2024, an instrument of the agricultural and food transition that uses a more contractual approach (much remains to be done though on the non-environmental aspects of this

public policy, such as the management of market uncertainties or the payment to active farmers): * Put an end to area-based payments and generalise environmental and climate based payments.

This is one of the most obvious weaknesses of the current system which pays the largest farms more. While we have succeeded in the current CAP negotiations to crack this logic by imposing

eco-schemes, this area-based approach still remains central. Improving eco-schemes and thus moving towards a system of payments for ecosystem services with the CAP should be a priority. Some

countries, such as the Netherlands, are already moving towards this method in their calculation of eco-schemes. It is also a measure of justice to redirect the financial flow of the CAP by

avoiding that the largest farms, with an economic model based on volume and specialisation, capture the majority of the available funds.  * Emphasise the contractualization of change towards

agroecology by rebalancing the first and second pillars. This financial rebalancing between the first and second pillars, and the reduction in the possibilities of transfers between the

second to the first, would make it possible to promote the contractual logic of the second pillar, which is currently way weaker (around 80%/20%), in favour of a more systemic vision of the

transition (avoid making a water payment instead of a carbon payment for example, but have a global approach to the functionality of the ecosystem). More resources for the second pillar will

also allow farmers to invest in the specific equipment necessary for farms with more rotations and more crop diversity. * Adapting the CAP to climate change and building appropriate

forecasting tools. Two actions seem relevant: * The massive deployment of risk management tools for the benefit of farmers in return for changes in their practices towards new ones adapted

to climate change depending on the region which unfortunately could not be agreed in the current CAP. * Already now, assessing climate change adaptation of each Member States’ agricultural

strategy plans. The Commission should carry out stress tests on climate change resilience and adaptation of the 27 national strategy plans to ensure that CAP money is well spent and that the

measures and projects supported under the CAP are sustainable across Europe. 7. TECHNOLOGICAL BREAKTHROUGHS FOR TRANSITION Some breakthroughs innovations that were still at the research and

development stage are now approaching economic maturity. Their impact on agricultural activity and more generally on production models is potentially very significant. Food technologies has

the most disruptive impact. The precision fermentation of milk proteins or of meat can make a strong contribution to the objectives of the agroecological transition. For example, by

significantly reducing the use of intensive livestock farming to mass-produce animal proteins, these technologies could contribute to animal welfare, to the development of crops useful for

the transition on freed-up land, to the protection of the world’s forests – which are currently under considerable threat from the sowing of crops needed for animal feed such as soy – and to

the reduction of methane emissions, etc. The maturing of technologies with such consequences means that their place in the basket of solutions needed for the transition to a sustainable

food system must be seriously considered. It will be necessary to measure the real ecological gains of such measures (for example, could the savings in space not be “cancelled out” by

excessive energy consumption to develop these new solutions, which would cause us to “lose out” on other objectives of the ecological transition?) and the conformity of these commodities

with our health rules. Organising the democratic debate on these subjects will allow us to define if we wish to build a legal framework to allow the development of large-scale European

start-ups in these fields. Digital technology is another potential source of disruptive innovation. Drones and precision equipment can reduce the use of inputs and are part of integrated

pesticide management methods. These technologies, as useful as they are, only go part of the way and must therefore be associated with changes in agricultural practices. At the same time,

satellite imagery allows us to go even further by giving farmers extremely detailed knowledge, for example, of the water situation of a plot of land to the nearest square metre. These

knowledge tools, provided that they are economically accessible and that farmers are trained in their use, are part of the toolbox needed for agriculture to adapt to climate change. Finally,

the creation of a green fertilizer industrial sector through the use of decarbonized hydrogen would make it possible to drastically reduce the emissions of this type of input, which

currently emits a lot of greenhouse gases, while reducing our dependence on phosphate imports, whose main suppliers are Russia, Belarus and the Maghreb countries. 8. CREATING VALUE FOR

QUALITY AGRICULTURAL SOILS Land is the main investment and the first capital of a farm. However, in the face of farm expansion and of climate change risks, it is becoming increasingly

difficult for a young farmer to finance his or her installation without going into heavy debts and this even though the knowledge of the potential of the soils acquired or rent is imperfect:

are they rich or poor in carbon? In organic matter? Have they been “washed away” by years of blind productivism? Etc. In other words, young farmers who sets up a business not only starts

out with a heavy bag of debts on their shoulders but they have no assurance that their main asset is of good quality and thatwill enable them to obtain decent yields. In these conditions, it

is rational to remain in the intensive system to obtain satisfactory volumes quickly and to repay one’s debts by ensuring a minimum income in the short term, even if this means compromising

long-term interests, which are closely linked to soil quality. If we want them to commit to the path of agroecological transition, we need to solve two problems: shed light on soil quality

and lighten the initial debt burden linked to the land to better invest in the necessary solutions for the transition. To solve the first problem, it would be relevant to introduce soil

diagnostics (carbon content, pollution, etc.) carried out by the owner at the time of the farms transfer, on the model of energy performance diagnostics for buildings. This diagnostic would

provide crucial information to the buyer on the quality of this asset, and would make it possible to segment the market to the benefit of farms with better quality land, and it would

encourage owners to maintain or improve soil quality on their farms, to better defend the value of their legacy. Under these conditions, the buyer would know clearly what he is buying and

could discuss the price in the light of this information and adjust his debt load accordingly. To solve the second problem, one option is to facilitate the carrying of land and farms by

public or para-public funds such as the Caisse des Dépôts in France, which would allow to develop the land lease model based on agroecological criteria. This could be conditional on an

agroecological farming project and take the form of an environmental-rural lease for a minimum of 9 years with an option to buy at the end. Under these conditions, the buyer could not only

be relieved of the burden of debt but could also acquire the land when the time comes, having found his model. The interest of the land carry fund will be to optimise its income – the rent –

which will be correlated to the quality of the rented asset (a soil in good health certified by the diagnosis described above will be rented at a higher price than a soil in poor health)

and it will increase the value of its capital by improving or preserving the quality of the soil over the duration of the farm. Such a land carrying would contribute to the renewal of

generations, by reducing the risks of over-indebtedness of newcomers. It also significantly improves their capacity to invest in the agroecological transition while preserving the farmers’

ability to own their land in the long term by offering them a contractual relationship equivalent to a lease with a possible buy-back option, alleviated of the payments already made during

the previous years of operation. On the other hand, this carrying allows a “control” ensuring at least the maintenance of the soil quality, which defines the value of the asset and therefore

the remuneration of the associated capital. 9. ACTING ON DEMAND TO DERISK THE SALE OF AGROECOLOGICAL TRANSITION PRODUCTS  Demand is obviously one of the key elements in the agricultural

transition equation. The current agricultural model has based its success on abundant accessible products at knock-down prices even if this means impoverishing producers. Without a demand

adapted to offer opportunities for agroecological agriculture, it is likely that the almost immediate consequence would be a shift in our consumption of European products towards imported

products manufactured under conditions that are far from our health and environmental standards. The challenge of demand is therefore to act both on the structure of consumption and on the

price we are willing to pay. Indeed, for comparable products, the transition to an agriculture that uses fewer inputs and is less regionally specialised, provides food of better sanitary

quality but implies higher prices. There are many factors involved (higher labour intensity, often lower yields, smaller industrial equipment and therefore less capacity for economies of

scale, etc.). However, things are more complex if we take the consumption of products in a dynamic logic: the replacement of animal proteins by a more plant-based diet reduces the price of

the consumption baskets, while the replacement of a product X by a similar organic product increases the amount of the basket. The compensation of the additional costs linked to

agroecological agriculture products by a modification of our diets can allow consumers to improve their diet while respecting a budgetary constraint increased by the current inflation.

Several levels of action can therefore be considered to ensure the right outlets for agroecological products: * INFORMING THE CONSUMER IN ORDER TO DRAW ATTENTION TO THE CLIMATE AND

ENVIRONMENTAL VIRTUOUS SECTORS. The examples of Label Rouge and of the Organic label in France have, until recently, shown that precise specifications, combined with a higher price giving a

financial bonus to the farmer who respects them, can conquer significant market shares and pull an entire sector. Thus, Label Rouge and the Organic label represent today about 25% of French

production and almost half of the whole chickens sold in France are Label Rouge – while organic production, despite the difficulties have encountered since 2022–2023, also retains a

significant market share. Similarly, consumers should be better informed about the potentially ‘negative’ health aspects of consuming conventionally produced food (presence of pesticide

residues, lower nutritional quality, etc.). * ORGANISING DEMAND AT THE ‘RIGHT PRICE’. Contrary to what is often argued, it is possible to get consumers to adhere not to the lowest price

logic but to the right price logic. An initiative such as “C’est qui le patron?” in France offers an interesting economic model that creates a “central purchasing unit” and a brand managed

by consumers on the basis of shared values (fair remuneration of farmers, sustainability, etc.). The methodology allows to single out the extra cost that members are willing to pay to buy

products that respect their specifications, which in return provides an extremely clear market for producers who contract with “C’est Qui le Patron?”. The cooperative is now the leading

seller of UHT milk in carton packs in France, proving that the price/consumption equation for the majority of people is not always orientated downwards. It seems obvious that any planning

project for the agroecological transition must integrate such an approach in order to identify the optimal extra cost that farmers committed to the agroecological transition can afford in

order to sell their production. Objectivising the extra costs also makes it possible to mobilise public authorities if prices are structurally too high. * UNLOCKING THE LEVER OF PUBLIC

PROCUREMENT. * The Egalim law in France is a good example: despite the non-binding target of 20% of organic food purchases in 2020, we are only around 10% in 2022. If the targets had been

met for milk, for example, this would have made it possible to largely make up for the rproduction of French organic milk and avoid a collapse in prices as we have experienced since last

year. Most of the feedbacks from the field point to a lack of organisation of the supply chain at local level and in particular a lack of logistical coherence between public canteens that

are used to working with a single supplier and for which the costs of coordinating the switch to a multi-supplier system are too high. * The issue of price in public canteens must also be

addressed in a holistic way. Reducing waste and modulating the supply of meat products can free up margins to offer more organic food without increasing overall expenditure and thus continue

to offer prices that are accessible to the greatest number, as it is the case, for example, in the 100% organic school canteens of the French town of Mouans-Sartoux. * NEGOTIATIONS WITH THE

RETAILERS. Retailers organise their margins on the products they sells in order to ensure its overall profitability. It is clear that agroecological products, and in particular organic

products, are subject to higher margins than conventional products (around 1.5 times higher). This situation reinforces the idea that agroecological products are reserved for the upper

middle classes. At national level, it might be wise to convey retailer to a major social negotiation on food, where this subject would be discussed. Margin ceilings based on the

sustainability of products could be set. This negotiation could contribute to reducing as much as possible all the additional costs that are detrimental to the accessibility of

agroecological products without having any direct link with the farmers’ income. *** Making a success of the transition to agroecology requires tackling the logic of low-cost agricultural

production and, above all, as we have seen in this paper, creating the economic conditions for reorienting the calculations and choices of farmers, the agri-food industry, cooperatives,

supermarkets, input producers, consumers, etc., in order to make an agroecological supply policy viable. This ambition will make our agriculture more resilient and sovereign, putting it on a

trajectory consistent with the Paris Agreement and our objectives for the protection of biodiversity, while ensuring healthy food for the benefit of consumers. It is also an industrial and

human ambition that implies more workers on farms, more activities and more jobs in the transformative industries and in the agri-food sector in our territories. Bringing together the

interests of farmers with those of society, economy and ecology is the key to the success of the transition to agroecology. ------------------------- [1]

https://agreste.agriculture.gouv.fr/agresteweb/download/publication/publie/Pri2007/Primeur%202020–7%20Cptes%20Rica.pdf [2] https://www.economie.gouv.fr/facileco/50-ans-consommation [3]

https://ec.europa.eu/eurostat/cache/website/economy/food-price-monitoring/ [4] Data from the GlobAgri model (https://agritrop.cirad.fr/588822/) [5]

https://agridata.ec.europa.eu/extensions/IndicatorsEnvironmental/Pesticides.html [6] EUTR: Union-wide overview for the year 2020