Climate-smart dairy systems: is the innovation level enough?  

Greta Winkler

The large share of emissions from the dairy producing segment of the agri-food sector have been a known problem for a long time, and several innovation strategies have been put in place to mitigate the climate impact of these products.  However, both COIVD-19 pandemic and Russia’s invasion of Ukraine have revealed the fragility of the current dairy supply chain and led to calls for a sustainable and resilient transformation of the entire dairy system.  

The SmartDairy project aims to assess the impact of existing and potential of climate-smart innovations along the dairy supply chain in four countries: Finland, Ireland, Italy and the UK.  While the literature has paid significant attention to technological solutions to reduce Green House Gas (GHG) emissions, less is known about the potential of other non-technical innovations. Our analysis tries to better understand the potential of three typologies of innovation, technological, organizational, and social innovation. Technological innovation concerns technological advances in farming techniques or new breeds. Organizational innovation happens at firm or sectoral level, this includes innovations such as having a biogas digestor to compost manure and produce energy on farm, which would affect the organization and overall processes on the farm or firm. Social innovation addresses aspects related to society and its habits, like policies, education programs in schools or changes in consumers’ preferences due to ethical reasons.  

Researchers from the four partners countries distributed a survey to 81 stakeholders involved in four different aspects of the dairy systems  i) production and processing, ii) retail and consumption, iii) advisory and research, iv) policy making. The main results are discussed below. 


Shown in the table below, innovation typologies show significant differences country wise. In Finland overall dairy sector re-organization was mentioned more, focusing on food waste reduction and intensification/optimization of land use for dairy production, followed by input source substitution, dealing with closed energy and resource cycles i.e. on-farm biogas, and local forage production. Ireland, UK and Italy share a focus on technological innovations connected to farm management techniques, including efficient distribution of fertilizers and soil management. Like Finland, the organizational innovation potential in the Italian dairy sector was frequently mentioned, such as in re-thinking the use of inputs and outputs of the dairy supply chain e.g. manure utilization for energy production. The Irish sector’s attention was turned to technological innovation instead, ranging from increased use of local breeds to selective breeding for increased efficiency. UK responses focused on improvement in the feeding systems.   


Results depicted below show that technological innovation does not constitute a barrier; it is available and mostly realizable. However, the costs connected to technological innovation are preventing respondents from implementing them, specifically mentioned were concerns about the level of return on investment at the firms’ level and the availability of appropriate subsidies. Moreover, social barriers, particularly changing individuals’ mindsets and beliefs, were believed to constitute the greatest challenge to innovation. The perception that GHG mitigation is not profitable or fairly distributed along the supply chain, as well as misconceptions about the value and usefulness of mitigation actions was mentioned frequently among stakeholders. 


Although stakeholders mostly mentioned technologic innovation, when combining the expected capacity to mitigate GHG emission and the adaptation/implementation costs, organizational innovation was also frequently mentioned. Examples of this included changing feed composition and routine to comply with higher animal welfare standards or changing on farms management, as the most cost-effective solution. These innovations can represent a business strategy that enables improving the sustainability of the dairy sector, nevertheless our results also show that there is still a great deal of pressure on the primary sector, farmers, to deal with the effects of production. The question of how to distribute cost of mitigation and take advantage of innovation along the dairy sector will be the next task. 






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