Regenerative agriculture entails implementing better practices on agricultural land. It involves facilitating soil health and restoring long-term resilience to the land while fostering diversity and system health. These farming practices can improve the value of land as well as provide additional external benefits such as improved water quality and sequestered carbon.
But agricultural land is not just a natural resource, it’s also critical for providing food and nourishment to our country.
So how does regenerative agriculture affect food systems and the ability of land to produce? Today’s food system is evermore geared towards sustainable production practices, and these practices can impact the supply chain of food, disrupt demand patterns, and impact product yields.
Climate Change is Forcing a Change in Production Systems
The adoption of new practices in agriculture can be risky. It can pose a threat not only to a farmer’s livelihood, but also to the security of our food system. In an era of climate change, however, farmers that fail to adapt and adopt sustainable and regenerative practices can face even bigger risks.
U.S. agricultural land has a relatively brief history due to the fact that intensive farming has only been practiced for the past few centuries. What’s concerning is that in this brief period, the US and other major industrialized nations have created a system of agriculture that is responsible for one fourth of global greenhouse gas emissions, 70% of global freshwater use, and 80% of global habitat loss.
Regenerative agriculture is a set of practices focused on reversing these statistics by turning agriculture into a system that provides ecosystem benefits rather than harm. More specifically, this entails transitioning from a focus on crop yields to a focus on soil health. While it’s not the only change needed to ensure a more prosperous food system, regenerative farm management can facilitate resilience to the incredible challenges that agriculture faces under climate change and reduce the impact of the agricultural sector on emissions.
Regenerative ag focuses on soil health and strives to mimic natural systems. This means less artificial nitrogen and phosphorus fertilizers, more cover crops, and less tillage. These practices, however, can impact the annual production capacity of a farm, making it a difficult choice when optimizing for annual returns. When thinking about the impacts of climate change on food production, however, the benefits of these practices far outweigh the costs.
How Soil Makes the Difference
When soil is healthy, it is full of life, and this brings stability to farming systems. For instance, heavily tilled and compacted soils are likely to see flooding and ponding on the soil surface when there’s precipitation. Healthy soil, on the other hand, will let that water infiltrate into the ground letting farmers get into their fields to plant, recharging aquifers, and improving water quality.
When there’s serious ponding in a field, it can dramatically impact planting, germination, and yields. The traditional method of dealing with this problem is to fix the ponding with surface ditches or subsurface permeable pipes. These solutions are not only expensive, but they treat the symptom of the issue, rather than the cause, unhealthy soil.
The COVID-19 pandemic brought major disruptions to the global food system that we are still seeing in markets today and will likely continue to feel the effects of for quite some time. Climate change stands to disrupt supply chains and our food system with even more intensity. Strategic investment into farms and ranches that are adapting to climate change and preparing resilient agricultural land will stand to maintain sustainable yields in a changing environment.
Building a Regenerative Business
In recent years regenerative agricultural practices have moved from the teaching of a few outspoken farmers and ranchers to one that has garnered $90 billion in funding.
The agricultural sector is huge, with key players like Corteva and Nutrien Ag boasting over $20 billion market caps. But the industry is quickly changing. There’s a call for a new way of doing things and traditional systems focused on yield maximization are slowly being traded for those focused on building long term resilience.
The agricultural food system – which is heavily consolidated into large, corporately owned production, processing, and distribution – is seeing a new wave of energy hoping to disrupt the current system. Startup companies like FarmTogether, Rizoma Agro, and Indigo Ag are bringing a wave of disruption to agriculture as they see sustainable and regenerative ag as the key to the success of our future food system.
Similar to the organic movement, regenerative agriculture is working on the development of standards and guidelines so that markets can begin to pay for products that are grown in a way that is more resilient to climate change. These markets, however, are quickly developing into their own space, rather than being part of the existing food system.
Major companies across the food (and fiber) industries, companies like General Mills and Walmart, have recently adopted some form of support for regenerative agriculture. Nevertheless, these efforts are in large part uncoordinated and unstandardized. There are a few “regenerative” food label certifications out there but none boast the scale or prominence as the USDA Organic label.
In large part, this is because regenerative agriculture is a tough thing to label. Unlike the organic system which has a strict set of guidelines, regenerative ag is a mindset that has principles, but no one size fits all solution. As the organic movement pushed major companies to consider their chemical inputs, regenerative movement is forcing the topic of ecosystems and soil health.
The organic movement pushed our food systems towards a direction of marketing based on farming practices and ingredients that set the industry up for a whole slurry of labels. You might notice next time in the grocery store how many different certification stamps are on your food products: everything from animal welfare and gluten free, to organic, palio, and more.
Few products on shelves currently have a regenerative food label, and much of this is because most of the current regulatory and market development energy around regenerative certification is not focused on the food and fiber products but the ecosystem services of the farming practices. These services are then being marketed in their own separate markets, rather than as a value add to the food and fiber products produced with those practices.
Next up, Resilience
As climate change poses the next major threat to the way the world does business, companies that focus on resilience, healthy ecosystems, and sustainability are the companies that are poised to adapt to the new climate paradigm.
FarmTogether is committed to providing investors with the opportunity to be a part of building not only a resilient food system, while enabling farmers to succeed in a future with uncertain climate and market conditions.
Soil that is healthy and full of life acts as a buffer against the impacts of rising greenhouse gas emissions and decreased water availability. Seems like in an era of climate change, businesses that will thrive in the next generation are those willing to learn a little from the dirt.
Learn more by visiting FarmTogether.
FarmTogether’s mission is to bring creative and transformative capital to farming while opening up a vital asset class to all investors. By driving abundant and creative capital to farmers, we’re giving investors the opportunity to drive agriculture toward sustainability on a massive scale.
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