The farm must go on!

Farms that sequester carbon deliver better economic performance

The Coronavirus crisis is profoundly disrupting our lives, our habits and our priorities. Beyond the uncertainty and hardship, it also forces us to consider what kind of world we want to shape after COVID-19. Surely we want it to be more resilient, more sustainable and healthier?

It is with this in mind that we share with you some encouraging news from the world of agriculture and food, to which we are dedicated.

Our commitment to regenerative and agroecological agriculture is based on two convictions:

1. A large-scale transition towards regenerative agriculture will only happen if it improves farmers’ profitability at the same time
2. You can only manage what you measure…

This is why our last few months have been devoted to the development of an analytical tool which links agricultural practices to their economic and climatic impact. We call it mySoilCapital — because a farmer’s soil is their capital. For the first farmers who have tested it, it is proving to be a highly innovative, relevant and robust tool to help them improve their economic performance and to address environmental challenges at the same time. In addition, mySoilCapital allows farmers to benchmark themselves against other farmers in their region and to identify the most appropriate levers for improvement on their farm.

As of today, around fifty farmers in France and Belgium have enrolled their farm for an analysis of their performance in the 2018–2019 season. Although it is too early to draw definitive conclusions, these are some initial observations that we can share at this stage.

In a nutshell:

1. The average farm experiences a shortfall of 30,000 euros a year (gross profit), compared to their best local peers.
2. The most economically efficient farms also have the best greenhouse gas performance.
3. It is possible to be net sequestering greenhouse gases on the vast majority of the crops analysed.

So far, what we have seen is that the average farm has a shortfall of some 30,000 euros per year in gross profit, compared to those with the best yields per euro invested. This analysis focuses on the cost of production per tonne of yield, including all inputs, mechanisation activities and their depreciation, as well as the farmer’s working time. In this analysis, which covers more than 25 crops, 80% of these savings are achievable on wheat, potato and sugar beet. Encouragingly, farms with the lowest production costs per tonne generally achieved better yields.

It also seems that the farms with the best economic performance have the best greenhouse gas (GHG) balance. The chart in the margin of this post illustrates this trend. The GHG analysis is based on the methodology of the Cool Farm Tool, developed by academics at the likes of the Universities of Wageningen in the Netherlands, Cambridge, Oxford and East Anglia in the UK and GFZ, the German Research Centre for Geosciences. Supported by organizations including AB InBev, Danone, Heineken, Mars, Nestlé and Unilever, the Cool Farm Tool enjoys strong scientific validity and consensus in the agri-food sector.

Finally, our analysis appears to confirm that it is possible to be net sequestering greenhouse gases on the vast majority of crops we have looked at, including potatoes and sugar beet, which generally consume a significant amount of synthetic fertilizer and whose soil preparation can be very intensive. The key factors are the use of cover crops and the reduction or elimination of tillage over several years, allowing a significant return of soil microbiology, and thus carbon, provided this microbiology is nourished appropriately.

If this analysis is confirmed, it means that carbon positive value chains can offer better financial prospects for farmers, in addition to the new income that carbon sequestration in soils could bring in the near future from crop buyers or other polluters.

Soil Capital has completed a feasibility study to assess if it is possible to design a GHG reduction and sequestration project involving European farmers. After an independent auditing process, including feedback and improvement, ECOCERT Expert Consulting confirmed that the contents of our feasibility study are adherent to the principles outlined in ISO 14064–2 (2019) of the International Organization for Standardization. This gives new credibility to agri-food companies seeking to offer products with a positive environmental impact or to organisations seeking to offset their emissions by supporting local initiatives.

All around the world, people right now have a much heightened awareness of how dependent we all are on farmers remaining resilient and productive in the face of adversity. If the early findings coming from our farm diagnostic tool hold true, farmers can start offering meaningful solutions to one of our other great threats — climate change — while making themselves more financially robust at the same time. Surely this offers one source of hope for the future.

#farms #farming #agriculture #climatesolutions #regenerativeagriculture

About Soil Capital

Soil Capital is a firm of independent agronomists and financial professionals seeking to improve the economic and environmental performance of farms at the same time. Active internationally, Soil Capital’s mission is to transition one million hectares to more profitable, regenerative agriculture by 2025.

To achieve this mission, Soil Capital is building a Community of independent agronomists to support the transition of farms to regenerative agriculture and improve their profitability at the same time. Soil Capital provides a package of support to agronomists who join our Community. This is constantly developing and includes technical knowledge and training from international experts, decision-support tools and access to new markets.

www.soilcapital.com