Farmers and nature restoration: it takes a village!
In a recent post, we highlighted how farmers could benefit from the recently passed Nature Restoration law.
Many thoughtful comments reminded us: in addition to capital to finance the transition, farmers need a support system to guide them through daily decisions. Ecological and financial data can be hard to interpret and act upon. We identified four key support mechanisms to enable the transition:
🧠 Knowledge networks: Peer-to-peer learning networks and expert advisory services are crucial. The French initiative "Pour une Agriculture du Vivant", Brazilian Associação Rede ILPF, global-scale Regeneration International and PepsiCo's knowledge-sharing program are great examples.
🛰️ Tech-enabled decision support: Farmers need real-time data and predictive models to make informed decisions. Our job is to use technology to translate cryptic scientific data into actionable insights and help farmers contextualize the information. For example, what does a 20% increase in water-holding capacity mean for your cocoa field? Is it good? Bad? Can it be improved? Should it? How? Our natural capital management platform Landler currently addresses that by showing benchmark data and providing contextual insights. Other great solutions include: NatureMetrics, Regrow Ag, Space4Good, Global Canopy, Biome Makers Inc., Farmforce Agrology, a Public Benefit Corporation and others.
💰Financial bridging: The short-term economic hit of transitioning can be severe. We need financial products tailored to this challenge. Our approach involves companies investing in nature "uplift units" generated by farmers, often with partial upfront payments and the remainder tied to measured outcomes. However, it's crucial to understand that these investments carry risks. External factors like extreme weather can impact results even when farmers do everything right. Our answer to that is full transparency on the state of natural capital at any point in time, acknowledging that permanence can never be guaranteed. Which brings us to our last point, by no means less important:
☔ Risk mitigation strategies: Given these inherent risks, how can we provide a safety net for farmers transitioning to regenerative practices and companies financing it?
1. Pre-finance the transition. Corporate programs such as Cargill's RegenConnect, developed in partnership with Regrow Ag, are great examples.
2. Transition funds that pool investments to dilute risk, for example IDH Farmfit Fund
3. Approaches similar to ETFs that spread risk across multiple projects.
These mechanisms aim to provide farmers with comprehensive support to make informed decisions and successfully transition to nature-positive practices, while realistically addressing the complexities and risks involved.
What other support systems do you think farmers need? Add your ideas to the comments below!