Crédit Mutuel AM: Sovereignty, quality and sustainability of agri-food systems

October 15, 2025

By Mathilde Moulin, Deputy Head of Financial and Extra-financial Analysis, Crédit Mutuel Asset Management

The agri-food sector, at the core of the United Nations’ Sustainable Development Goals, must simultaneously meet several requirements: producing enough to feed a continuously growing global population, while safeguarding biodiversity and ensuring healthy and nutritious products. However, are these objectives truly reconcilable or is this an impossible balance to achieve? To meet this triple challenge - quantity, quality and sustainability - a profound transformation of the agri-food sector is required.

The agri-food sector is both dependent on nature and partly responsible for its deterioration. It is heavily reliant on fragile natural resources that are increasingly under threat, such as access to water, climate stability and soil quality. At the same time, extreme weather events (droughts, floods, heatwaves, hurricanes, etc.) are multiplying and can, for instance, disrupt harvests and weaken supply chains.

A striking example of this dependence is the mustard shortage on supermarket shelves in 2022, a direct consequence of the summer 2021 drought that cut Canada’s mustard seed production in half, Canada being one of the world's leading exporters. The sector alone accounts for one third of global greenhouse gas emissions, 70% of freshwater withdrawals and nearly 80% of biodiversity loss.

In a 2021 report, the Food and Agriculture Organization (FAO) estimated that more than one-third of agricultural land is moderately or severely degraded, leading to declining yields. Yet, by 2050, in a world with limited resources, agricultural production will need to increase by 70% in order to feed between 9 and 10 billion people. Intensive agriculture, long perceived as the only solution to keep up with population growth, is now showing its limits.

The necessity to rethink production models is further reinforced by the emergence of new societal expectations. Consumers, shaken by various food scandals (horse meat, contaminated milk, etc.) and increasingly aware of the impact of their diet on their health, are demanding healthy, high-quality, local, minimally processed and environmentally friendly products. 

Multiple solutions for systemic transformation

In light of these challenges, a profound transformation of agri-food processing systems is essential. To be effective, it must be multifaceted and capable of mobilizing all the actors across the value chain.

Technological and agronomic innovation provides powerful levers to optimize farming practices and improve food safety.

• Precision agriculture, in particular, reduces the use of inputs (fertilizers, pesticides, etc.) and water while maintaining production levels and yields. For example, smart sprayers, equipped with machine learning algorithms can now recognize weeds, drastically reducing the use of chemicals. 
• Biotechnologies also play a key role, offering biological crop protection solutions or micronutrients to enrich soil. At the same time, advances in genomics, particularly through the CRISPR-Cas9 technique, have paved the way for targeted seed improvements, enhancing productivity, nutritional quality and resilience to climate hazards.
• Lastly, the Internet of Things (IoT) offers new opportunities for food security monitoring. It is now possible to track and analyze food quality in real time via connected sensors that transmit continuous data on temperature, humidity and ripeness.

But innovation alone is not enough, farming practices themselves must be rethought to correct the shortcomings of intensive agriculture.

• Regenerative agriculture, for instance, which is based on techniques such as crop rotation, agroforestry, soil cover, no-till farming, or mixed crop-livestock systems, better respects biodiversity, enhances soil fertility and carbon capture and strengthens the resilience of agricultural systems to climatic shocks.
• At the other end of the value chain, the traditional business models of agri-food companies also need to be reconsidered. Companies must reformulate products (reducing salt, sugar, fat or additives) and offer specialized nutrition products which have an impact on health and well-being. In addition, companies must implement robust and holistic Corporate Social Responsibility (CSR) programs to reduce environmental impact, ensure product safety, raise client awareness to fight food waste and promote more responsible consumption.

Finally, public policy plays a key role through support for agronomic research, subsidies for agroecological transition, regulation of industrial practices and consumer education.

Persistent barriers to be overcome

The agri-food sector has the potential to transform and meet the triple challenge of quantity, quality and sustainability. However, several structural obstacles remain.

The first challenge lies in cost and social acceptability. While products from sustainable supply chains are becoming more visible, their higher prices remain a barrier for many consumers. This reluctance weighs on demand and slows investment by economic actors in more virtuous practices.

Another major obstacle is the limited access to innovative technologies. In many regions, particularly rural areas and developing countries, farmers lack both the financial resources and adequate training to adopt advanced technologies that could improve productivity and reduce environmental impact. Fragmented agricultural markets further complicates the scaling up of sustainable solutions. Value chains are often complex and involve multiple players, making it difficult to mainstream more responsible practices.

Finally, the lack of coordination among stakeholders (public, private, non-profit and financial) slows down the transformation dynamic. Without shared governance and clear incentives, initiatives remain too isolated and limited in scope.

An agroecological model that reconciles food, environmental protection and product quality is achievable. However, its implementation requires significant investment, strong political commitment and coordinated, collective action. Once the transition succeeds, the agri-food sector, long seen as part of the problem, could instead become part of the solution and a key contributor to addressing the major environmental and societal challenges of the contemporary world.