Gavin Shepherd: Social license vital for a sustainable farm future

There are many issues around the Healthy River plan that farmers object to. Pictured in the Puniu River.

The social license to operate is underestimated by the farming community, but it is the factor that will have the greatest negative impact unless the agricultural sector accommodates these concerns.

There has been media attention given to this term over recent months.

Firstly, at a recent conference for the Association of Rural Veterinary Practice directors, Dr Bryce Cooper from NIWA, presented the story about the development of the Healthy Rivers plan, then in a Rabobank report by Blake Holgate, the term social license was mentioned again.

Consumers follow stories in the traditional media and social media like never before. If there is a good environmental story, the farming community will benefit. The effect will be international and happen very rapidly.

The development of the Healthy Rivers plan is a case in point. Dr Bryce Cooper noted that the science and the emotion associated with this change is, to some extent, irrelevant. It is the perception by consumers nationally and internationally that is relevant.

There are many issues around the Healthy River plan that farmers object to, but the standards have been developed after prolonged consultation with many stakeholders - approximately 50 per cent were associated with the rural sector. These water quality standards have an 80-year horizon.

If these targets are not met, consumers will object to the environmental effects from farming and prices will suffer.

Holgate, from Rabobank, says that while some food producers may be able to use sustainability as a basis to achieve a price premium, this is likely to be a short-term benefit.

The greatest opportunity to realise value in sustainability is the long-term strategic value associated with being a trusted source of sustainably produced agricultural products.

Longer term, sustainable farming could provide strategic value by future proofing, customer intimacy, shared value chain relationships and social license to operate.

To produce a price premium, food producers must go beyond compliance and build sustainability into a larger story about their product - where it came from, how it was produced, and what it stands for. Think of the consumer in Europe purchasing an Ice Breaker garment with its sustainability story.

Social license to farm is a new term, but will be heard more often. Most farmers appreciate sustainability concerns and want to look after the environment as much as everyone. There needs to be genuine progress on some of these water quality goals. As soon as there is an improvement, the positive story will be international.

I believe that long-term profits on farm are more linked to these social perceptions than efficiency in production or scale at all costs. Focus on getting food on the table of consumers who buy the clean green story for a large price premium.