Regenerative agriculture has gained increasing attention in recent years as a holistic approach to food production that focuses on soil health, biodiversity, and ecosystem resilience. With rising consumer demand for sustainably produced food, some see investment opportunities in the regenerative agriculture space. However, there are still many open questions around measuring the impacts of regenerative practices and building viable business models. This article reviews the current state of investing in regenerative agriculture in America, including the potential benefits and risks, key players, and challenges that need to be addressed.
Regenerative agriculture aims to improve soil and ecosystem health
Regenerative agriculture refers to farming practices that prioritize soil health, water management, and biodiversity. This includes techniques like no-till farming, cover cropping, rotational grazing by livestock, and reduction of chemical inputs. The goals are to increase soil organic matter, sequester carbon, improve water retention, and promote biodiversity on farms. Proponents argue regenerative agriculture can mitigate climate change through carbon sequestration while also making farms more resilient. However, metrics and measurement of regenerative agriculture’s impacts are still developing. More research is needed to quantify the potential benefits to soil, yields, and the environment.
Investor interest is growing, but business models remain uncertain
Various startups, investors, and food companies are exploring opportunities in the regenerative agriculture space. For example, Indigo Agriculture works with farmers to implement regenerative practices and has raised over $850 million. Food companies like General Mills and Danone are partnering with farmers to source ingredients grown regeneratively. However, questions remain around developing profitable business models, scaling practices, and quantifying the value proposition. Paying farmers for ecosystem services like carbon sequestration may enhance profitability, but measurement and verification challenges persist. More work is needed to develop robust regenerative agriculture value chains.
Transitioning to regenerative practices requires farmer buy-in and support
For regenerative agriculture to scale, farmer adoption is critical. Transitioning to new practices can entail risks and learning curves for farmers. Extensive education, technical support, and demonstration of long-term benefits are needed to drive adoption. Some companies are providing direct payments, training, and guarantees to farmers for transitioning. Public policy also has a role to play in providing incentives. Government programs that share costs, connect farmers to resources, develop metrics, and create market infrastructure can accelerate farmer adoption.
Partnerships across private, public, and civil society sectors are emerging
Due to the complex challenges involved, partnerships between private companies, government agencies, non-profits, and farmers are emerging to advance regenerative agriculture. For example, Land O’Lakes SUSTAIN program convenes actors across dairy supply chains to implement practices on farms. Non-profits like the Savory Institute offer farmer training programs using holistic grazing practices. Collaboration can provide technical expertise while also raising awareness of regenerative agriculture’s potential among consumers and policymakers. Multi-stakeholder partnerships have potential to drive broader systems change.
Investing in regenerative agriculture offers opportunities to improve soil health and farm sustainability, but quantifying benefits, developing viable business models, and driving farmer adoption remain key challenges needing further work by both private and public sector actors.