”We are connected with almost one in every five farmers in Argentina. Just imagine what this might do”
ACA, Asociación de Cooperativas Argentinas, works together with roughly 50.000 famers, which constitutes almost one fifth of all operations in Argentina. By its scale alone, ACA’s three-year plan to develop a decarbonization methodology can have huge impact on CO2 emission in the country.
“IT MIGHT SEEM SIMPLE, BUT DECARBONIZATION IS ALL ABOUT INFORMATION”
At ACA, the largest second grade cooperative in Argentina (a cooperative of cooperatives), the first stop for collected grain is a storage silo. Before further distribution, the produce is kept in the next available silo, regardless of the produce properties. To reach adequate dryness to allow long term storage, the silos were heated according to a fixed protocol, using natural gas. Nowadays, this is different. As the trucks arrive to the silo-elevators, ACA employees check humidity levels, balancing the overall humidity of the cereal in different silos, aiming at meeting the desired dryness. This change in protocol has allowed some silos to stop using natural gas altogether, which saves ACA valuable energy and reduces carbon emissions in its own operations. “It might seem simple, but decarbonizing is all about information," says Mario Alejo Dantur, head of the recently created Sustainability Department at ACA.
A while ago, this second-grade cooperative - with 143 member cooperatives and a reach of 50,000 farmers - started its three-year plan to estimate all emissions that are under their full control and to, based on that information, identify emission reduction possibilities across its own operations. The focus now is to estimate Scope1emissions (those that come from their own actions), as well as those resulting from purchased energy (Scope 2), and those linked to their value chain (mainly upstream) that is emissions associated with ACA’s associated cooperatives farmers’ operations (Scope 3). The Argentinian company feels the pressure to advance on this topic. "There is a societal and governmental call for contributing to climate action and controlling emissions. And as an organization we also want to be more sustainable. Climate change is already affecting our farmers. We have had three consecutive years of severe droughts and more extreme rain events" says Jose Bretti, head of HSE at ACA.
As a company that – amongst other things - processes 23,400,000 tons of grain and soy, owns four harbors, a seeds factory and a feed processing plant, decarbonizing its own operations is already hugely impactful. Next to increasing overall efficiency in energy use in its operations, ACA is also looking at other ways to reduce its emissions, for example through better logistics. Using train wagons, or river barges to transport the grain, instead of trucks for example, makes a big difference. And when the trucks do have to be used, the routes are carefully planned. "There is, especially, much to be gained in the efficient movement of grain."
“WE HAVE HAD THREE CONSECUTIVE YEARS OF SEVERE DROUGHTS AND MORE EXTREME RAIN EVENTS”
But with 50,000 farmers as hinterland, ACA has even more potential for impact. Back in 2019, FMO supported a University of Amsterdam intern in her work on her master’s thesis, which focused on the impact of climate change on the grain sector in Argentina. Being mostly rain-fed agriculture, the thesis’ conclusions pointed towards managing soil conditions as the best way to contribute to climate adaptation. ACA’s soil testing department, which holds over thirty years of data from thousands of farmers, supports these conclusions, since their historical analysis shows that there is a credible margin for improvement in the carbon content of soil in the area where they operate. "If you improve the organic matter in the soil, it is more resilient, since in wet conditions it drains better and in drought conditions it has better water retention capacity, thus allowing a better management of the extremes in weather."
ACA, next to being the largest grains originator of the country, is also the largest input (fertilizers, herbicides and chemicals) provider of Argentina. This offers another opportunity to reduce emissions, particularly on Scope 3. "The company has years of experience in providing technical assistance to farmers to optimize their crop and use of land," says David Griso, FMO’s Senior Environmental & Social Officer working in this transaction. Currently, farmers belonging to ACA cooperatives and their operations are not allowed to purchase fertiliser directly. The process first involves a careful analysis of existing soil conditions, desired productivity, specific seed variety used, and based on this, an agronomist makes a prescription of the exact mixture of nutrients to be used by that farmer, thus reducing significantly fertiliser needs. ”All this information is captured in ACA’s Geographic Information System, which gathers very valuable information on production, fertiliser use, pesticide use, for each particular plot,” says Griso. So how to improve further? “First we need to develop the tools that work for us, and once we have this, we can pass this knowledge on to our Cooperative members" says Mario Alejo Dantur. But behind the scenes, ACA is working on the next step already, and this is where FMO’s support comes in.
FMO has done significant work trying to understand innovative ways of tackling climate change in the agricultural sector, and last year produced, together with Rabobank, a detailed analysis of the role agricultural carbon could have in generating extra income for farmers. FMO saw that ACA could provide the ideal platform to seek incorporating carbon credits generated from sequestration into farmers’ pockets, and ACA was aligned. FMO agreed with ACA on a margin reduction incentive, based on the completion of a feasibility study on the development of a carbon credits scheme that would benefit the farmers while enhancing carbon sequestration in soil, or in other initiatives, such as permanent change of cropland into permanent pasture, or conservation areas. The company was already planning to look into this option, but this was something they considered to do in the long run. However, by having a financial incentive, the company now sees the value of speeding up the process. Individual farmers cannot access carbon credits because the system is too complicated and expensive, but having a company like ACA might make it possible. ”Based on our findings from our own measurements, we can design mitigation measures that will have the most effect in reducing emissions and improving sequestration. The fact that ACA works with cooperatives and gives technical advice, gives us a unique position to improve practices.", said Mario Alejo Dantur. Jose Bretti adds: “Yes, we are connected with almost one in every five farmers in Argentina. Just imagine what this might do."