Supply chains warned not to dump carbon costs on farmers

Farmers risk being left to carry the cost and legal uncertainty of supply-chain carbon targets without fair payment, rural organisations have warned.

A coalition of farming and land-based bodies has called on processors, retailers and other agricultural businesses to treat producers fairly as they work to reduce emissions.

The warning comes in an open letter to the agricultural supply chain and governments across the UK, led by Scottish Land & Estates and the Central Association for Agricultural Valuers.

The signatories said farmers and growers were facing increasing pressure to meet sustainability, regenerative farming and emissions requirements.

However, they warned that some arrangements failed to give enough consideration to the financial costs, practical implications and risks placed on primary producers.

The letter focuses on carbon insetting, where buyers claim carbon reductions achieved by farmers and other businesses within their own supply chains.

The approach can support efforts to reduce scope 3 emissions under the Greenhouse Gas Protocol, but the coalition said it must be delivered fairly, transparently and with high environmental integrity.

The organisations are calling for separate payment for carbon outcomes, informed consent, credible monitoring and clear protection of farmers’ ownership and data rights.

Other signatories include the Tenant Farmers Association of England and Wales, the Game and Wildlife Conservation Trust and the Country Land & Business Association.

The letter says producers should receive adequate payment for any carbon benefits claimed by buyers, in addition to the price paid for agricultural products.

Farmers must also be given enough time to understand proposed agreements, seek professional advice and provide free, prior and informed consent.

The coalition said claimed carbon removals should meet recognised standards and monitoring requirements to demonstrate that the benefits are permanent.

Farm data and any carbon outcomes that have not been sold or transferred should remain the property of the farmer or grower.

The letter also calls for better contract practices across the agricultural supply chain.

Farmers should not be discouraged from obtaining legal, financial or professional advice before entering an agreement.

Tenant farmers must also be able to discuss proposed arrangements with their landlords where existing tenancy rights and obligations may be affected.

Contracts should include clear appeals and dispute-resolution procedures, the signatories added.

The coalition also warned against applying England-focused agreements across the whole of the UK.

It said arrangements involving farmers in Scotland and Wales must reflect the separate laws and agricultural policy frameworks operating in those countries.

Eleanor Kay, senior policy adviser at Scottish Land & Estates, said farmers and growers had an important role to play in helping businesses meet their climate and sustainability ambitions.

She said many supply-chain relationships already rewarded sustainable and regenerative farming practices, but warned that other approaches risked placing a disproportionate burden on producers.

“Decarbonisation cannot be delivered by simply passing obligations down the chain without proper remuneration, consent or clarity,” she said.

Kay said the organisations were aware of parts of the supply chain that were not following appropriate best practice.

“Insetting can be a positive and legitimate tool, but it must be done properly,” she said.

“That means fair payment for the carbon outcomes being claimed, transparent use of data, respect for ownership rights, and agreements that allow farmers to take proper professional advice.”

George Dunn, chief executive of the Tenant Farmers Association of England and Wales, said processors and retailers must not use their market position to secure unfair terms.

“It is wholly inappropriate for processors and retailers within farm produce supply chains to use their leverage to gain unfair advantage over farmers and growers,” he said.

Dunn said good practice and fairness needed to be built into the developing carbon insetting market from the outset.

He added that farmers and growers were well placed to capture and store carbon, delivering benefits that should be properly recognised.

“Insetting arrangements within supply chains need to also understand and respect the complexities of the contractual and statutory obligations that exist between owners and occupiers of agricultural land including within farm tenancies,” he said.

The coalition is seeking commitments from buyers and governments to ensure carbon agreements provide fair payment, clear ownership rules and safeguards allowing farmers to obtain independent advice before signing.