MARA’s Plan for Sustainable Agri-Food Development in China: A Closer Look

This year, China’s Ministry of Agriculture and Rural Affairs (MARA) released the “Plan for Emissions Reduction and Carbon Sequestration in Agriculture and Rural Areas.” The Plan is the first of its kind to specifically address sustainable agri-food development in China.

Two days ago, AGF hosted a webinar to discuss this important new policy and the ensuing developmental opportunities. Following the presentations by various experts, a discussion was held and the speakers addressed questions on the Plan’s implementation, challenges, and potential impact.

How will the Plan impact the agri-food supply chain as a whole? What will support the sustainable growth of economic benefits in each link of the supply chain, and how can companies participate?

Xue Yan, Qin Xiaobo, and Li Peiyi

The announcement of this Plan marks a historic opportunity for the green transformation of the agri-food industry and supply chain. While there will be foreseeable supporting policies to urge the improvement of laws, regulations, and the construction of industry standards and measurement systems, a relaxed environment and more capital investment will also be created to encourage innovation and full participation in the carbon trading market. Furthermore, the government plans to increase large-scale publicity efforts to promote awareness and acceptance of low-carbon foods such as plant-based meat, among others.

To support economic growth in each link of the supply chain, Mr. Xue, Mr. Qin, and Ms. Li emphasized AGF’s commitment to continue activities, projects, and pilots that companies can actively participate in and encourages interested industry players to start with the steps below:

  1. Carry out vertical integration
  2. Play a supporting and leading role in technological innovation
  3. Measure and label carbon emissions in industrial activities
  4. Participate in the construction of carbon credit systems and carbon trading markets

What challenges will relevant government departments have in the implementation of policies, and what challenges or concerns do relevant companies have in helping these policies to be implemented?

Xue Yan, Cong Hongbin, Li Peiyi, Qin Xiaobo, and Yu Jianhai

At the macro level, a series of blueprints and pathways need to be formulated to improve relevant standards and quantitative systems. The predominant challenge companies now face is how to find practical development opportunities from policy, capital, market, and technology angles. To improve their competitiveness, they must tap into new economic growth points through technological innovation.

In terms of supply and demand, the AgFood Future Center of Excellence has committed to working with companies to establish industry norms, including green packaging and waste recycling. Such standards are necessary not only for the industry but for the country as a whole. This is both a challenge and an opportunity. If for example, companies decide to use sustainable packaging, this will make them eligible for green labels and certification, thus boosting their corporate image and helping to make sustainability a driving force for consumers.

The Plan mentions carbon emissions trading in the agricultural food industry many times. What is the future development prospect of the agricultural food carbon market and carbon finance?

Qin Xiaobo and Xue Yan

On July 16, 2021, the Chinese national carbon market was launched, making it the largest carbon trading market in the world. In just one year, this market achieved a trading quota of 194 million tons, with a cumulative turnover of more than 2 billion yuan. The market quote compliance rate exceeded 99.5%, and more than half of all companies participated in the quota trading. In the past two months, the transaction price has been between 55 and 60 yuan, aligning with market expectations.

According to Mr. Qin and Mr. Xue, there are currently about 200 methodologies for the voluntary emission reduction market, of which only 12 are related to agriculture. Because the approach of the agri-food industry is still blank, and the guidelines and standards are lacking, the first step in carbon finance is quantification. Quantifying carbon emissions can help companies:

  1. Identify key emission reductions
  2. Analyze the benefits of low-carbon technologies
  3. Identify their own strengths and weaknesses
  4. Main their competitiveness

Businesses and other groups in the agri-food industry can participate in developing frameworks, standards and guidelines, stockpiling carbon trading programs, and accumulating carbon credits. In the future, a multi-party guidance mechanism such as policy incentives, market guidance, and regulatory constraints will be formed. And there will be an increasing synergy of low-carbon innovations, market quotas, and voluntary emissions reduction offset markets.

It is evident that green finance will play an increasingly important role in agriculture and food systems. Mr. Qin and Mr. Xue believe that when it comes to carbon accounting for products, companies will greatly benefit from carbon trading while simultaneously selling ever-popular climate-friendly products.

After the Plan is released, what is the future direction of China’s agricultural low-carbon and carbon-reduction policies?

Qin Xiaobo and Xue Yan

In the future, policies and standards related to sustainable development will be subdivided, localized, standardized, and normalized. An evaluation system and implementation path that aligns with the characteristics of China’s industrial chain will be built. More institutions will join, and the AGF Center of Excellence is committed to working with all players to promote high-quality economic development.


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