- Generating a price premium is ideal, but a long way off for consumers who are overwhelmed with eco-labels and jargon.
- Consumer pressure on food companies to reduce their environmental impact, is giving regenerative farmers a market access edge.
- While ecosystem services payments (soil carbon etc) to farmers is a promising prospect, the core benefit to farmers remains the increased resilience of regenerative farming systems.
THIS ARTICLE, BY THE REGENERATIVE AGRICULTURE INITIATIVE (RAI) AT THE CENTER FOR BUSINESS AND THE ENVIRONMENT (CBEY) TEAM, is part of a fantastic series about key opportunities to accelerate regenerative agriculture in the United States. Well worth the read and big thanks to the Conservation Finance Network for this great contribution to the sector.
The drive for increased profitability in regenerative agriculture is an obvious focus for existing farmers and those considering a transition. This article explores the key levers that can impact this aim.
While price premiums for regeneratively farmed produce are a long way off at this stage with consumers confused by the 'regenerative' term. There is some hope on the horizon if the link between healthy soil and healthy food can be consistently proven and if consumers continue to demand food with minimal environmental footprints.
The other key strategy explored in this article is the possibility of paying farmers for ecosystem services such as increases in soil carbon, reductions in greenhouse gas emissions, improvements in water quality, and reductions in water quantity used. The article explores the testing phases underway with platforms such as ESMC, Nori and Indigo Carbon.
The strategies employed by big food brands General Mills, Danone and Pipeline Foods are also explored to show how food brands are seeking to reduce their environmental impacts and increase resilience in their supply chains. There are some early signs that technology could support farmer to consumer connection and segregation of regenerative produce in supply chains.
Finally the idea of creating markets for the new and more diversified crops produced in regenerative systems that are moving away from corn and soy monoculture is explored. With challenges abounding.
A fantastic article for every farmer to read to understand where they sit in the emerging marketplace for regeneratively farmed produce. Enjoy.
... this desire to minimize environmental harm is not feasible if it creates a financially unsustainable operation. Farming profitability is essential for affordable food production, long-term solvency, and accessible financing....
The prospect of positive financial returns is imperative to incentivize sometimes risky, wholesale change....
to drive a large-scale transition from conventional to regenerative agricultural practices, it is important for growers to retain or even enhance profitability during and after the transition. To help ensure this profitability, there are multiple interventions across the agricultural supply chain that could create attractive markets for regenerative products and/or reduce financial risk incurred by growers.
Consistent price premiums for regeneratively produced products could boost adoption of sustainable growing practices. Unfortunately, consumers rarely see this value in the price tag. Most consumers are unfamiliar with the term “regenerative” and many feel overwhelmed by the number of environmentally focused certifications on the market.
To guarantee demand, food companies can structure long-term agreements. Farmers can also capitalize on development of new, technology-enabled markets. The impact of these downstream interventions would be magnified by additional changes upstream: offering more widely accessible farmer training programs, increasing financial investment in regenerative farmers and land, and reforming crop insurance to incentivize regenerative practices