An Economic Model for Post-Industrial Agriculture
It’s the end of an era. Yield-maximization is no longer the sole driver of economic success in production agriculture.
Industrial agribusiness since the 1950’s has revolved around cheap food – maximizing the productivity of seed and livestock genetics, fertilizer and pesticides; leveraging efficiencies in technology, handling and processing. Using ‘carrots and sticks’, regulators and markets are breaking this model apart right now, and its traditional profit margin potential.
In addition to yield and price, farmland return on investment (ROI) calculations now include:
New and growing government payments;
New and growing taxes on greenhouse gas (GHG) emissions;
Market restriction/penetration events leading to price spreads;
Credit payments toward biodiversity and low carbon intensity; and
Professional fees for regenerative practice adoption knowledge-transfer.
For each of the five new revenue streams identified above, below are explanations and case studies showing how farm economics will continue shifting in the years to come.
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