According to the head of agriculture at Bank of Ireland, Eoin Lowry, sustainable farming is becoming increasingly important in the agri-food supply chain, and new sustainability loans will support action.
Farmers know the value of sustainability. Lowry said the role that the agri-sector plays in fighting climate change is well understood by Ireland’s farmers, and they also know that it has a value.
Lowry explained: “Sustainable agriculture helps to preserve natural resources, while promoting social equity and economic profitability.
“Not only does it reduce the environmental impact of farming systems, but it also results in higher productivity, improved efficiencies and more sustainable food products for consumers.
“Agriculture is the world’s oldest and largest industry. It employs more than one billion people and generates over $1.3 trillion worth of food annually.
“Pasture and cropland occupies around 50% of the Earth’s habitable land and provides habitat and food for a multitude of species.
“In Ireland, agriculture is the largest land user and an integral part of the Irish rural economy, employing over 173,000 people.
“When agricultural operations are sustainably managed, they can preserve and restore critical habitats, help protect watersheds, and improve soil health and water quality. But, unsustainable practices have serious impacts on people and the environment.”
Sustainable resource management
Eoin Lowry added that the need for sustainable resource management is increasingly urgent.
“Demand for agricultural commodities is rising rapidly as the world’s population continues to grow. Agriculture’s deep connections to the world economy, human societies and biodiversity make it one of the most important frontiers for conservation around the globe.
“How and where we produce food is one of the most important conservation issues of the 21st century. The challenge of sustaining life on an increasingly crowded planet of more than 8bn people grows more complex every day.
“By 2050, our planet will need to feed an extra two billion people. This will see food demand increase by almost 50%. In simple terms, the earth will need to produce more food to feed more people on fewer resources.
“At the same time, as improving biodiversity, water quality, animal welfare standards and reducing greenhouse gas emissions. This is a huge challenge.”
Banking on sustainability
Lowry noted that banks are key to the transition to a greener economy.
However, he warned that the climate challenge is impacting all banks’ appetite – particularly around sectors considered more vulnerable to transition.
To directly address this, Bank of Ireland is partnering with the agri-food industry to provide an additional funding option for farmers implementing sustainable farming practices through its innovative Enviroflex product.
Enviroflex is designed to support farmers and their use of land to be part of the solution, firstly by improving the environmental footprint of their farm, while also supporting the decarbonising of other sectors.
It is underpinned by Bord Bia’s Origin Green Sustainability Programme and the Teagasc Marginal Abatement Cost Curve (MACC), promoting and rewarding accelerated sustainable action at farm level.
“Banks are seen as a key enabler to support the transition to a greener economy. Agri and land use can be part of the solution to support the decarbonising of other sectors,” said Lowry.
With more than 82,000 farming customers, Bank of Ireland is a key banking partner to the agri-sector in Ireland. In 2023, Bank of Ireland provided over 55% of all new lending to farmers.
Enviroflex is currently available to farmers who are milk suppliers of Dairygold and Kerry Dairy Ireland and who are participating in a sustainability programme. Planning is already underway to roll it out to other co-ops and processors around the country.
Lowry said Enviroflex was designed to support the bank’s farming customers to take action and reward farmers that are doing the right thing by the environment “because that will create a more efficient, productive and sustainable farm in terms of the environment, economically and socially”.
“At Bank of Ireland, we want to understand what the farm of the future looks like, because the way we farm today (like always) will not be how we farm in the future. New technologies, new consumer preferences, new challenges will demand that the sector changes etc.
“Banks can reward farmers who are embracing green initiatives and are on the journey to reducing their environmental footprint – by cutting back their emissions, improving the biodiversity of their farms and enhancing their farms overall water quality,” he added.
The head of agriculture said he is confident about the future. He believes that farmers, similar to when they have faced challenges in the past, always find innovative and productive ways to overcome them.
“The sector has only really started on its sustainability journey and has already made significant progress. Farmers are resilient and will adapt.
“Practical and sustainable finance products such as Enviroflex that are designed to support farmers are key to the successful implementation of long-term sustainability practices, and will help the sectors achieve its ambitions in this area.”
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