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Food systems transformation must be central to climate conversations this year
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Friday, 12 September, 2025, 16 : 00 PM [IST]
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Francesca Priora
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With climate pressures rising and global food systems under strain from demand and scarcity, transforming these systems through investment in resilient and sustainable value chains is critical. With major events like New York Climate Week and COP30 approaching, now is the time to act for food security and planetary health.
Throughout 2024, and particularly at COP29, there was a distinct feeling that global policymakers’ sense of urgency towards food systems transformation had plateaued. This was in stark contrast to the optimism at COP28, where the interconnectedness of food systems was recognised as crucial role in combating climate change and easing pressure on natural resources. However, negotiations stalled at COP29, leaving no clear mandate for change.
As a result, climate finance for agrifood systems remains at around 7%. This is despite the UN’s Food and Agriculture Organisation (FAO) estimating that current funding rates would need to grow fortyfold to meet the countries’ commitments to reduce their greenhouse gas emissions, known as National Determined Contributions (NDCs).
It’s clear climate finance needs rebalancing with urgent targeted investment and incentives across the food value chain – particularly in the “hidden middle” between farm and fork.
The impact of greenhouse gas emissions from global food systems, as well as land and water intensive farming practices, is compounded by over a third of produce being either lost or wasted. Meanwhile, the crisis of global hunger continues, with the UN estimating that over 2 billion people are struggling to get regular access to sufficient food.
We must do more to address the problems of our food systems to make them more sustainable, resilient, and equitable. The food and beverage industry, alongside advanced manufacturers, is stepping up with a whole-system approach covering each stage of food processing and packaging. Given the global reach of our sector, we have a unique opportunity to drive impact by collaborating across the supply chain to reduce emissions and food waste.
Crucially, this work delivers both environmental and financial returns, helping food and beverage manufacturers to drive efficiencies, reduce loss and waste, increase productivity and drive profitability.
The agriculture sector is generally the most visible part of food systems, so is often the focus of discussion around mitigating food’s climate and nature impacts. However, focusing only on farm-level solutions risks missing the bigger picture - a significant proportion of food produced by farms is wasted when it is not efficiently delivered to consumers.
Between the farm and the consumer’s plate lie a number of key steps. Processing, packaging, storage, transportation and distribution account for up to 40% of the value added in food systems. Yet according to Professor Thomas Reardon, these steps have become a “hidden middle” in the chain from farm to fork. The hidden middle is responsible for 18% of agrifood emissions, showing the potential for improvement if attention is effectively focused on this often-neglected area.
Meeting global food requirements while reducing the environmental impact of food systems requires a holistic approach. Indeed, a recent report by the FAO argues systems thinking is necessary to solve food systems challenges. Therefore, it is vital that we look to outcome-focused investments and incentives in the hidden middle that enable agri-food SMEs to invest in and deploy new and impactful solutions.
It’s also important to recognise that the planet, people and the economy are all interdependent, and simply addressing one of these pillars will not afford a Just Transition for the others. This means designing policies and partnerships that create opportunities, protect livelihoods, and ensure that no one is left behind.
One example of a hidden middle investment that creates this ‘triple win’ is the work done to set up ‘Dairy Hubs’. These connect dairy smallholders to processors, providing hands-on training alongside technical assistance to make efficiencies across the value chain. In Bangladesh, PRAN Dairy has established five Dairy Hubs with the support of development agencies UNIDO and the Swedish International Development Cooperation Agency. These support around 12,800 farmers who have seen raw milk collection increase from 3,600 litres to 19,000 litres per day, while the average income per farmer has more than doubled. This benefits individual farmers, the local and national economy, and the environment.
Another example of activity in the hidden middle of food systems is maintaining and servicing equipment and parts, rather than simply replacing older equipment when it breaks down. Regular servicing and upgrades with advanced technologies can extend equipment lifespan and improve performance meaning food manufactures are not prevented from growing and adapting their products by capital costs of entirely new production lines. Working with what they already have, they keep machinery in use while rejuvenating its efficiency. This keeps factories operating at their peak, both in terms of reducing emissions and maximising product output by avoiding costly repairs and downtime.
The limited climate finance allocated to food systems is a stark reminder of the need to rebalance investments across the entire agri-food chain, particularly for SMEs. Sage and the International Chamber of Commerce have found that while 68% of SMEs are unable to pursue desired sustainability initiatives due to high costs, those with easier access to sustainability finance were 2.5 times more likely to take action.
Policy and business action is urgently needed to redirect climate finance and generate blended finance within the hidden middle for more resilient food systems. Considering that just $16.3 billion of public funding reaches the sector each year, there is a considerable gap to reach the estimated $430–$500 billion needed annually to build secure, sustainable and resilient food systems.
Opportunities still remain within the “hidden middle” for those who are willing to take them. The rewards are not only environmental but can provide a new way of unlocking sustainable long-term business growth and efficiency. As we prepare for New York Climate Week, now is the time to work together and invest in the “hidden middle” to protect food, people and the planet.
(The author is vice president for climate & nature at Tetra Pak)
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