Modeling Regenerating Farmland
The Modern Acre Co-op is a group of dedicated agriculture enthusiasts with professional expertise in tech, finance, farming, marketing, and more.
Here is Part 1 of 2 reports that will highlight this week’s Modern Acre podcast, from a Co-op members call that took place back in April, 2023. Next Monday’s issue of Prairie Routes Research will analyze the transformation of farmland operating returns and investment horizons when regenerative practice adoption is deployed successfully.
Today let’s revisit the fast-growing field of MRV – measuring, reporting, and validating ecological outcomes. From carbon removal to biodiversity, the critical first step towards marketing beneficial environmental outcomes is proving them.
Defining Regenerative
Circa 2017-2018, the term ‘regenerative agriculture’ started to gain traction. But it wasn’t very well understood or defined until recently. Today, there are multiple benchmarks for determining various entities’ place on the regenerating spectrum.
Qualification for government reimbursements under the On Farm Climate Action Fund (OFCAF) and similar funding programs available around the world.
EU regulations like The Nature Restoration Law passed last week, and others that will limit market access.
Certification under third-party audited regimes like Land to Market, Regenerative Organic, and Regenified.
Inclusion as a stop on a regenerative farm tour.
Ability to merchandise bulk commodity grain, that is subject to possible rejection based on pesticide residues and heavy metals.
The last one isn’t exactly ‘regenerative’, but it is what bulk commodity traders are working on right now. An important principle supporting new practice adoption is meeting everyone where they’re at.
The current context of the international grain trade is that some companies have a vested interest in pesticides and fertilizers, economic ties to oil and gas, and a culture of secrecy. Producing lab test results to maintain market access could be the thin edge of the wedge that ultimately leads to field-level data capture and emissions reporting via trading documents.
Aggregating Data
So, now that there are models to work off of, and collection systems, what needs to happen to market and sell regenerative farm data? The biggest hurdle facing monetization today is the ill-defined consumer; a close second is digital finance.
We know that sales at farmers markets and certified organic demand have been experiencing double-digit growth for more than a decade, and that this has driven some amount of fraud… but that’s not the point here. Whether the value proposition is legitimate or not, these two sectors have identified consumer demand segments, and supplied differentiated products to them from specific farms.
Consumer demand for regenerative agriculture at this stage is still unquantifiable. It could help put more regenerative products in front of consumers if the primary ingredients are sold off farms at the same price as commodity grain.
Regenerative farmers can be paid in new ways – for supplying production reports, for hosting farm tours, and in consulting. Their crop input expenses steadily decline, substantially, meaning resilient new segregated value chains can be built without a market price premium paid on the grain.
Turning to digital finance, blockchain has emerged as the platform mechanism for transactions related to ecological outcomes on farmland. One of the biggest lessons to come from the commoditization of certified organic grain trading is that a paper-based, pdf-attachment system is insufficient to preserve the integrity of branded products.
Thankfully, government and industry are starting to categorize data in similar buckets. They don’t match perfectly today, but Canada’s OFCAF designed reimbursable expenses, application forms and third-party approvals that are close enough for brands and their supply chain partners to work with.
Once the modeling is complete, the technologies to transfer validated, data-supported, qualified claims will be relatively straightforward to implement. Technology exists to standardize efficiencies and scale communications and commerce, and today it feels very close at hand.