21 January 2022 |

Keep Cool Report #0003: Regenerative Agriculture

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2,152 words, ~ 7 min read

“The soil is the great connector of lives, the source and destination of all. It is the healer and resurrector, by which disease passes into health, age into youth, death into life. Without proper care for it we can have no community, because without proper care for it we can have no life.” – Wendell Berry

Report North Star

Shed light on regenerative agriculture’s ability to close the greenhouse gas (“GHG”) emissions gap by transitioning land use from a net contributor of emissions to a net emissions sink. 

What is Regenerative Agriculture? 

Regenerative agriculture is a holistic approach for raising crops and animals that rebuilds living biodiversity in soil, produces more nutrient-dense food and sequesters excess carbon underground.

Regenerative agricultural practices that support soil carbon sequestration include:

  • Diversifying crop rotations 
  • Planting cover crops (planted to cover soil rather than to be harvested), green manures, and perennials
  • Retaining crop residues to increase crop yields and potentially retain more carbon
  • Using fertilizers such as compost that don’t require GHG-emissions
  • Actively managing livestock grazing and/or transitioning to a land-use approach that combines crops and livestock 
  • Minimizing tillage and soil disturbance
  • Reducing the use of and need for synthetic chemicals 

Why it Matters 

Soil is a living membrane crucial for human and planetary health. Soil sustains and nourishes us, stores water, cycles nutrients and is the largest land-based carbon sink. Sadly, we are destroying this resource. Industrial agriculture releases about 25% of annual GHG emissions and has eroded the soil biota that cycle atmospheric carbon back into soil. 

Regenerative agriculture can restore soil health, rebuilding the organic matter in soil that sequesters carbon and provides us nutritious food. Therefore, regenerative agriculture represents a massive opportunity to support human health, reduce the threat of climate change, all while improving farmers’ financial wellbeing.

Every challenge, an opportunity

Here are the climate challenge areas in which regenerative agriculture can have outsized impact. (to go deeper on these climate tech challenge areas, checkout our content overview) 

1. GHG Capture and Storage 

The Opportunity: Degraded farm soils are some of the best soils on the planet for sequestering carbon: they are already the product of highly managed farms (just managed in the wrong way), are accessible, and have the capacity to act as a drawdown mechanism for a lot of carbon if their management is comprehensively changed.

2. Food, Agriculture, and Land Use

The Opportunity: Transitioning to regenerative agriculture practices will generate healthier soil with larger and more nutritious crop output. It will also allow us to preserve the Earth’s topsoil, which is currently diminishing at ~36 billion tons / year. For perspective, the world could run out of topsoil in as little as 60 years if current rates continue.

The Players

Consumer Products

Established, Fortune 500 players who have committed to transition to regenerative agriculture practices:

Up and coming players:

Tools (Software and Hardware)

  • Nutrien: Provides crop inputs, services and support for growers to improve sustainability and boost profitability 💰
  • ReGrow: Digital platform for monitoring, reporting, and scenario planning
  • Benson Hill: Data analytics for a range of crop varieties
  • Soil Heroes: Compensating farmers and connecting them to businesses to make the transition towards regenerative agriculture
  • Trace Genomics: Employing machine learning in soil sciences 💻🌱
  • Vence: Livestock management system
  • Indigo Agriculture: Regenerative farming practices + a carbon credit marketplace
  • OpenTeam: Suite of tools for farmers to improve soil health
  • TruTerra: Platform to help farmers advance sustainability goals and food companies to measure progress
  • Yard Stick: Hand-held soil probe to measure carbon soil levels onsite.

Farm and Farmers

Educators and Foundations

  • Kiss the Ground: Awareness focused media as well as training, mentorship, soil testing, and scholarships for transitioning farmers 📣
  • Intertribal Agriculture Council: Council that promotes conservation and development of regenerative agricultural resources 
  • Rodale Institute: Research, farmer training, and education, e.g. virtual courses 📚
  • The Carbon Underground: Research and awareness on the science of soil’s relationship to climate change
  • Farmers Footprint: Coalition of farmers, educators, scientists, and business leaders championing regenerative agricultural practices
  • Regeneration International: Promoting the transition to regenerative farming through networks of scientists, farmers, policy and business leaders, etc. 🤝
  • Quivira Coalition: Building soil, biodiversity, and resilience through land and water programs, as well as offering education for new farmers 
  • No Till On The Plains: Educating and building networks for regenerative agricultural production systems
  • The Land Institute: Developing alternative agricultural practices focused on perennial grain crops and polyculture farming solutions
  • Soil Health Institute: Enhancing the vitality and productivity of soil

Certifications

Financing + Funders

  • Steward: Equipping regenerative farms with the capital they need to grow 📈
  • Agriculture Capital: Directing capital to produce better food at scale 💸
  • Black Farmer Fund: Fund for Black food systems entrepreneurs 
  • The Perennial Fund: Supporting financial plans for farmers transitioning to regenerative agriculture systems and practices 💪 
  • ReHarvest Partners: Capital and strategic partnerships for the transition to a more regenerative agricultural production system
  • RePlant Capital: Funds focused on U.S. farmers’ transition to regenerative agriculture
  • Clear Frontier: Investor in farmland and partner to farming teams developing more sustainable crop portfolios
  • Maine Harvest Credit Union: Lending institution focused on better local food systems

Where It’s Headed 

Commercial-rate investors will invest more heavily in farmland assets, especially those converting to regenerative management. Climate-friendly agricultural practices not only produce food, but could mitigate nearly 170 GtCO2e (gigatonnes of equivalent carbon dioxide), generating significant income from carbon offsets and other sources (Soil Wealth 2019 Report). As such, they represent a nascent, attractive asset class that investors will increasingly tap into and around which new financing players will emerge.

Data and tech will be central to regenerative ag’s success. Farm management software is hot 🥵. Grand View Research projects the market will scale to $4.2 billion by 2025. The same report predicts an expansion rate of 16.7% CAGR over the forecast period. As farmers adopt regenerative practices and buyers’ concerns over sustainability increase, technology and software will be central to ensuring farmers can measure their impact and management of the land.

Collaboration and open source. Farmers switching to regenerative agriculture practices will find that collaborating and sharing data will allow them to scale impact and mutually benefit. See for instance Regen network and OpenTeam’s collaboration; they are building a farmer-driven platform built to support farmers around the world with the best possible knowledge to improve soil health.

The success of regenerative systems will shift KPIs for agricultural output. Crop yields are often touted as the reason why we can’t scale regenerative systems. However yields are not the problem; ~40% of the current global harvest is wasted each year. Regenerative agriculture will shift emphasis away from optimizing for yield/acre. The performance metrics of the future will look more like “crop per drop” or “nutrient use efficiency.” 

Land ownership will transition. The USDA estimates that 70% of U.S. farmland will change hands in the next 20 years. As land increases in value, current farmers consider retirement, and the next generation hesitates to carry on rural traditions, farm owners are selling their farmland at a record clip. As we look to a new generation who are open to the principles of regenerative agriculture, we need to address their ability to access land either through ownership or long-term leases. More on this in the “Challenges” section.

Less consumer shame. Love burgers? Same 🍔. Regenerative grazing practices will challenge the notion that regardless of how it is raised, beef is bad for the planet. 

Regenerative Mindset. Leading players in the regenerative agriculture space see the conversation around soils and food systems as a catalyst for and a gateway to larger conversations around the intersection of human health and ecology. Look for the regenerative movement to expand far beyond agriculture in the future. Initiatives like Project Biome take a community approach that spans more than just soil, (e.g. including regenerating water and air).

Opportunities for Action 

Build a regenerative agriculture consumer brand. Whole Foods identified regenerative agriculture as the #1 food trend in 2020. Alternatively, join forces with an existing operation and work with regenerative farmers to scale production and distribution of regenerative organic products. 

Incorporate indigenous knowledge into regenerative agricultural practices. Regenerative practices are often rooted in traditional indigenous wisdom that have been passed down and refined for centuries. Interested in learning more? You can, courtesy of the Intertribal Agriculture Council who offers programs and technical assistance on exactly these subjects.  

Finance. Farmers who successfully incorporate regenerative agriculture into their operations see higher profitability. Explore innovative financing methods that can generate profit while scaling regenerative agriculture and benefiting farmers. This study identified 70 investable regenerative food and agriculture strategies that already have $47.5 billion in assets under management. 

Influence. Modifying or overhauling the farm bill — legislation that’s passed every ~five years in the U.S. and has a tremendous impact on farming practices — is necessary to ensure we produce adequate, nutritious, and sustainable food without bankrupting farmers or taxpayers in the process. Nixing harmful subsidies or other financial incentives needs to be a priority for policymakers, leaders, and citizens alike. For a great example of government-led change, see Iowa’s cover crop incentive program.

Explore regenerative ocean farming. Pioneered by Greenwave, regenerative ocean farming grows a mix of seaweeds and shellfish while sequestering carbon and rebuilding reef ecosystems. With a low barrier to entry, Greenwave claims anyone with 20 acres, a boat, and $20-50K can start their own farm 👀. 

Curate a marketplace of regenerative agriculture products. Educate consumers and help brands sell while generating revenue via affiliate marketing. Plus, building a platform and capturing consumer attention could eventually allow you to introduce your own products, too.  

Oh and in case you haven’t…  🙃  Access climate tech trends and business ideas with 5-minute reports.Subscribe for free

Obstacles

Policy 🌽. Federal crop insurance programs are one of the biggest barriers to transitioning to a regenerative system. Corn, for example, currently receives more than one-third of all crop subsidies in the U.S., with about 40% going toward ethanol production and another 40% toward producing animal feed. Its predominance has unintended and negative effects on clean water, international trade, obesity, and of course, soil health. This existing structure, coupled with a lack of support for farmers and ranchers who would otherwise work to diversify their systems makes transition extremely difficult.

Policy (Part II). This new study, the most comprehensive ever conducted on how pesticides affect soil health, sheds light on how regulatory agencies like the EPA assess (or fail to assess) the risks posed by the nearly 850 pesticide ingredients approved for use in the U.S. We need to trigger immediate and substantive changes to privilege soil health over profit before regenerative practices can truly thrive. 

Lack of trusted technical assistance. Technical service providers (like the Natural Resources Conservation Service) are able to create a strong set of parameters to define the transition to regenerative agriculture within their offices. However, digital and remote resources to help farmers actually transition are lacking. Further, each transition is truly unique. From farm to farm, the optimal scenario is having people on the ground who understand each landscape, crop portfolio, and community.

Land ownership. Non-operating landowners control 41% of U.S. farmland. And this percentage will likely increase, as large investment firms and individual investors alike look to diversify their portfolios with farmland (see platforms like AcreTrader). This can be problematic. For instance, farmers report that they will gladly transition to cover crops on their own owned acres, but not necessarily on rented acres if the land owners are less educated on the benefits. Asymmetries of ownership and education can thus stall the adoption of regenerative agriculture.

Semantics and Consensus: Lack of consensus around definitions, metrics, expected outcomes, certifications and analytical frameworks for regenerative agriculture leaves the sector vulnerable to reputational risk, consumer confusion, and oversimplification. Profit-minded players could co-opt the term regenerative into stamps at the storefront that do little to advance holistic regenerative practices on farms, or in the worst-case scenario, actually have negative environmental impacts. What’s needed instead is nuanced, community-driven consensus with input from all stakeholders. 

For an even more comprehensive deep dive see Guidelight Strategies’ report outlining the barriers preventing US farmers from adopting regenerative agriculture practices.

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