Regeneration is the goal - but, how do we fund the transition?

Blog written by TFF’s writer & poet-in-residence: Peter Bickerton

“Regeneration” in agriculture is all the rage. But what does it mean? At its core, regeneration means people prospering alongside nature. Regeneration goes beyond the concepts of sustainability (which is all about doing “less bad”) towards something more transformational: “doing more good.” It means producing abundant food while also improving biodiversity and the health of our ecosystems and economies. But for farmers and businesses alike, though regenerative agriculture can be more profitable in the long run, tight margins mean it can be challenging to make the transition away from existing practices. That’s why for the Thought For Food Challenge 2022, TFF and Danone are seeking next gen solutions for our Topical Prize: The Business Case For Regeneration.

Socioeconomic concerns cannot be underestimated when it comes to building better food systems. Sure, we know our climate models show in unequivocal terms the severe threats of maintaining the status quo – but that doesn’t make it any easier for farmers to make a sudden switch to new ways.

“The key issue we’ve identified is financing,” says Philip Birker of Climate Farmers, a company on a mission to scale regenerative agriculture in Europe. “We have the community and the knowledge to help farmers transition, but, the fact is, it costs money to do so.”

To understand why, let’s start by taking a look at what regeneration means.

🌱 What is regenerative agriculture?

“Regeneration means respecting nature and giving back to it in a circular way,” says Fabricio Goulart, founder of Feitosa FoodTech in Brazil. “If you’re using something from nature, you also have to give back, at least as much. It’s like paying interest on what we take out.”

Regeneration positions farms as part of a well-functioning ecosystem, improving soil health and pollinator populations, as well as farmer lives and local communities. It might involve growing mixtures of crops and cover crops, while using more biological inputs and fewer synthetic pesticides.

Conventional modern agriculture has made great strides to increase agricultural production through optimization and efficiency, but, with these gains come the fact that our food system is now essentially dependent on inputs that put its very future at risk.

By far, the most common way of growing crops today is through ‘conventional’ agriculture.’ This is a term used to describe practices that typically rely on monocultures and agrochemical inputs. While we take a lot of grain, we leave little for biodiversity and ecosystems to thrive.

We’ve replaced meadows, once rich in flowers and insects, with sterile rows of fertiliser-hungry, pesticide-thirsty wheat and maize crops. Crops such as coffee and cacao, more naturally suited to shade, crowd together in plantations where there used to be forests.

Genetically-identical crops planted closely together are susceptible to pests and diseases, making use of pesticides necessary. In a negative feedback loop, soil health declines as microbes and soil dwelling animals suffer the oft-indiscriminate effects of chemical inputs – as do the pollinating insects we rely on to fertilise fruits and vegetables. Poorer soils require even more fertilisers as natural nutrient-cycling processes break down.

💡 Where where do we go from here?

Around 15 million out of over 500 million smallholder farmers worldwide today practise regenerative agriculture, building on centuries of experience. Traditional agriculture in Central America, for example, saw maize grown in combination with leafy squash plants and sprawling beans, rather than the vast monocultures we see today.

As legumes, the beans would naturally fix nitrogen from the air and replenish the fertility of soils. Using sturdy maize stalks as support for their tendrils, the broad squash leaves would suppress weeds by blocking light. The mixture of beans and corn mimics the biodiversity of natural ecosystems, and reduces the need for expensive inputs like fertilisers and herbicides.

Another good example of regeneration is the success of mixed cacao forests, where cacao trees thrive alongside their only pollinator, the shade-loving cacao midge. Grown amongst mixed fruit and nut trees, which provide extra income streams, cacao trees are more productive due to improved pollination.

In nature, symbiotic relationships exist beyond plant species. In fact, mixed agroforestry systems often include plants and animals, and are more resilient to the pests and diseases that blight monocultures. A well functioning ecosystem of pest-eating animals, and nutrient cycling microbes in markedly healthier soils, provides stiff natural competition.

There is a lot to gain from adopting mixed agroforestry systems and regenerative practices – and these approaches can be more profitable too. But, effort is required to make the transition. Since the industrial revolution, we have invested heavily in mechanised systems that make planting, tilling and harvesting easier. We have optimised seeds, machines, and supply chains for monocultures. Farmers therefore often require incentives to change their farm management practices.

👨🏽‍🌾 How do we help farmers transition to regenerative agriculture?

Among the challenges for farmers is developing another set of skills, such as soil, water and biodiversity management. Farmers are at the frontlines and need support with this. Agricultural extension services provided by governments and universities have played a role through the years in building farmer knowledge and capacities, but in today’s high-tech, digital era, their advice and approaches are often out-of-date.

“We are working a lot on regenerating farmland by supporting farmers and local communities in the transition towards regenerative agriculture,” says reNature co-founder Felipe Villela, who wants to help 2% of total farmland and farmers become regenerative by 2030 (fun fact: Felipe met his co-founder at a TFF Summit!).

Among their projects are regenerative coffee in Kenya, and cacao agroforestry in Peru.

“We work hand-in-hand with farmers to develop a transition strategy plan, offer technical assistance to implement it, and monitor impact indicators such as soil health, biodiversity, and farm economics. We use that data to guide decisions made on the farm.”

Brazil’s IZAgro took home the 2021 TFF Challenge Runner-Up Prize for their app which connects the country’s 4 million+ smallholder farmers with each other and to agronomists. They provide on-demand, independent knowledge and information about regenerative farming practices, a marketplace to buy sustainable inputs, and advice on how to measure outcomes that can reverse climate change by rebuilding soil organic matter and restoring degraded soil biodiversity – resulting in both carbon drawdown and improving the water cycles.

Climate Farmers share an outcome-based definition of regenerative agriculture that’s tailored to each individual farm. Among their offerings are a knowledge hub, where data and resources can be shared with the community, as well as a two-month pioneer training and support programme for farmers.

“We have the community and the knowledge to help farmers, but it costs money to do so,” says Climate Farmers co-founder Philippe Birker. “Farmers need support for three to five years while they are transitioning to regeneration. After that they don’t need extra support, and there are many studies that show regenerative agriculture can be more profitable, but those first years are crucial.”

🌀 How do we lessen the financial impact of transitioning to regeneration?

Thought For Food recently brought together leading start-ups and companies driving regenerative agriculture around the world – including Climate Farmers, reNature, Feitosa Foodtech and Danone, to discuss this very topic.

Here are some of the takeaways:

Political action, such as the EU’s green deal, promises support for regenerative agricultural practices through incentives, but the effects may be slow to reach the farmer when policies must first be enacted by governments and lawmakers. Steps in the right direction are taking place, such as the UK’s Sustainable Farming Incentive, but these sorts of policies are generally in their infancy and not yet universal.

“Large scale food corporations are definitely well set up to give farmers the support they need for the transition to regeneration,” Philippe suggests. “That can take different forms, like paying a premium for regenerative products at first, or a 0% loan.”

While tight margins mean that paying premiums can be challenging, some big companies are experimenting with this – for example, by developing certification programs that are consumer facing. Consumers who want to support regeneratively-grown products pay a premium, and this is passed through the supply chain back to the farmer.

When it comes to loans, Danone North America has created a new type of partnership to provide ‘slow money loans’ to farmer partners who can use them for expenses involved in transitioning to regenerative agriculture. This is part of the company’s commitment to a future of regeneration.

There is more in the offing, including proposals for a new $25 million dollar fund. But the $25 million dollar question is: how much money do farmers actually need, and how do large companies work directly with them?

“We have a transitional fund that we can use to fund regenerative agricultural practices, but we need to understand what is required to fund the transition, or what is the cost of the new practices,” says Anco van Shaik, Global Category Sourcing Director Plant Based Commodities and Feed Upstream at Danone. “But in many cases we are not directly talking to farmers.”

That’s where connecting people in the ecosystem – from farmers to processors and corporates to consumers – is key.

Climate Farmers work with farmers to understand their needs on an individual basis, understanding the different stakeholders involved and what regenerative practices would make sense in the specific context of their farms and lives.

“We see what that would cost. And based on that, we basically try to build a relationship between the farm and a company that is close to them that is willing to pay that transition,” says Philippe. “We call these companies “impact heroes.” We work with them together, and they help to finance part of the transition. But these are quite small social businesses, generally, who don’t have the deepest pockets.”

Perhaps there are synergies, there, to be had.

💜 Community is key

“Regeneration is measurable,” says Fabio Volkmann of Climate Farmers. “We can show the impact that these farmers have, and communicate this to the outside world, which is where community building is key. Everybody wants to work on climate protection, climate action, and we want to work together with people in society.”

Fabricio of Feitosa Foodtech, who brings together farmers with various industries to make use of the whole banana plant – from fruit to leaf, diversifying income from one farm – agrees.

“We have to become more connected. I cannot create shoes or a t-shirt. But I can recommend factories to use the banana fibres to create a new product. That’s my role, really. To help others to create new products using the entire plant or entire food and connect them in one chain. It’s about thinking holistically and outside of siloes. Growing together, working together, synergistically. Just like nature does.”

Do you have a creative solution that can make regeneration profitable for people and the planet? We would love to support you. Sign up for the #TFFChallenge2022 today!