Sustainability May Not Be Enough

By Dave Harding

Sometimes maintaining the status quo isn’t good enough. The agribusiness community increasingly recognizes it’s no longer sufficient to merely sustain farmland in its current state. Instead, crop sectors seek to nurture and restore degraded soils to their full biological potential. And momentum is building around this concept of regenerative agriculture.

Proponents and early adopters point to an array of benefits. Among them are more profitability, better farm resiliency to extreme weather events, improved water utilization, reduced greenhouse gas emissions, better food quality and increasingly preferred supplier status.

Sustainability May Not Be Enough				  Regenerative Agriculture is Gaining Ground and Paying DividendsAnd it goes beyond soil health. It’s a conservation and rehabilitative approach to farming systems that focuses on topsoil regeneration, increasing biodiversity, improving the water cycle, supporting bio-sequestration and increasing ability of land to persevere through climate change. 

The 2019 crop year has reinforced the importance of making farms more resilient. “We don’t get an inch of rain anymore, we get four inches,” says Jason Mauck. He has adopted regenerative practices like relay intercropping on portions of his 3,000 acres in east central Indiana.

What regenerative means for farmers and food system stakeholders is in flux, says David LeZaks, who leads regenerative food system projects for Delta Institute, a Chicago-based nonprofit identifying market-based solutions to environmental, social and economic challenges.  

“People often think of regenerative agriculture from strictly an agronomic standpoint, in terms of soil, water, biodiversity and nutrient flows,” he says. “That’s accurate, but there are also broader definitions that factor in the socio-economic benefits of regenerative farming systems.”

Potential for Greater Profitability

LeZaks says the body of research and data surrounding regenerative agriculture shows it can be more profitable. “More money is staying on the farm and with the farmer. It’s improving agronomic and farm financial outcomes, while bolstering the economies of rural communities and providing a broad range of environmental benefits,” he explains.   

Sustainability May Not Be Enough				         Regenerative Agriculture is Gaining Ground and Paying DividendsPotential for increased profitability stems from a combination of things, including more stable yields and lower input costs. “We’re also starting to see some supplemental or alternative revenue streams come into regenerative farming systems,” adds LeZaks. “They’re not mature yet, but carbon, water and biodiversity markets are emerging that can pay farmers to provide some of these eco-system services. Crops and livestock that come from these systems usually have a differentiated quality, and farmers can capture that additional value.”

LeZaks was a lead author of Soil Wealth: Investing in Regenerative Agriculture Across Asset Classes, a report published by Croatan Institute, Delta Institute and the Organic Agriculture Revitalization Strategy in July. It covers a major, three-year project on innovative mechanisms for financing regenerative agriculture funded through a USDA Conservation Innovation Grant.

The report finds increasing urgency of addressing climate change bolsters a mounting interest in regenerative ag and carbon farming. A subset of investors demonstrates increased interest in financing not simply “sustainable” agriculture, but agriculture deemed explicitly “regenerative.”

Kristine Nichols, Ph.D., a soil microbiologist and founder of KRIS Systems Education and Consultation, has focused her research on the impacts of cropping and grazing systems on soil microbiology, nutrient cycling and soil aggregation to improve soil health and water quality. Her most recent work involves mycorrhizal fungi. A recap can be found at ILSoyAdvisor.com.

“Early on, I became fascinated with how a microscopic fungus that already exists in the soil could actually help to change the way plants grow,” says Nichols. “And not only help the plant get nutrients and water, but aid in disease resistance and essentially help plants engineer the soil structure, which is important for reducing erosion and soil loss. Without regenerative practices, soil is not a resource that’s easily renewed.”

Nichols has done the math on vast topsoil losses in the U.S. Based on the latest USDA data available, she says in 2014 the country lost 1.6 billion metric tons of topsoil.

“If you loaded that amount of soil into boxcars, the length of the train to hold all of it would circle the globe seven times,” she says. “That’s just one year. Our agricultural productivity is in severe jeopardy if that continues.”  

Nichols believes farmers and ranchers are beginning to feel a convergence of economic, pest and disease pressures on top of weather and market pressures. “They see some of the chemical tools they've been putting in place for the last 40-50 years just aren't working anymore,” she says.

“But farmers by nature are individuals who always look for ways to improve their systems,” she continues. “They’re innovators. And that’s why we see more farmers begin to implement regenerative systems. Practices like no-till and strip-till, none of those innovations would have happened without farmers driving them.”

LeZaks agrees farmers are leading the way. “These sets of practices, to rebuild and regenerate soils and build resilience, weren’t introduced by corporations, government agencies or brands. They were borne out of necessity, and, in some cases, desperation by farmers.”

New Supply Chain Initiatives Provide Regenerative Fuel

Meanwhile, new initiatives from food manufacturers are emerging and government programs that support regenerative farming are being explored.

In March, General Mills announced an initiative to advance regenerative agriculture practices on one million acres of farmland by 2030. The company plans to partner with both conventional and organic farmers in key growing regions to drive adoption of such practices.

“We recognize our biggest opportunity to drive positive impact for the planet lies within our own supply chain, and by being a catalyst to bring people together to drive broader adoption of regenerative ag practices,” says Jeff Harmening, chairman and CEO of General Mills. 

General Mills recognized the global food system contributes to climate change, with estimates indicating it accounts for roughly one-third of greenhouse gas (GHG) emissions and 70 percent of water consumption. The company said it will partner with key suppliers to drive regenerative practices across key crop ingredients and conduct on-farm training and education academies.

Danone North American, producer of Dannon yogurt, also announced a new soil health initiative to identify ways to help regenerate soils and enhance organic matter and soil fertility. Danone will work with participating growers, dairy farmer partners and third-party soil health experts on soil sampling, data collection and analysis, and sponsor soil health best practices field days.

Investment Capital on the Horizon

Sustainability May Not Be Enough				         Regenerative Agriculture is Gaining Ground and Paying DividendsSoil Wealth: Investing in Regenerative Agriculture Across Asset Classes also looked at where dollars flow from the investment community into agriculture, specifically in the sustainability and regenerative side, and to identify gaps in funding.

“We’re identifying where there isn’t enough capital to support some of these activities and how we might do that differently,” says LeZaks. “USDA is supporting our work because they clearly know the amount of money budgeted for the Environmental Quality Incentives Program and Conservation Stewardship Program isn’t enough.”

The report identified 127 U.S.-focused investable strategies with combined assets of $321.1 billion that integrate sustainable food and ag thematically or as criteria in the investment process.

On the farm side, regenerative farmer Mauck would like to see more incentives for farming practices that restore soil health and deliver public benefits beyond just food, fuel and fiber.  

“Our country is so worried about our roads and infrastructure, but we forget about our soils,” he says. “They’re starting to talk about carbon credits and those types of things. But as we do more research on organic matter and carbon sequestration, tracking key performance indicators, paying farmers for sinking carbon, and increasing land productivity is going to be more important than anything for the next generation. We’ve got to get things structured that way.”