Regenerative Farming (III): Guide to conversion

In our first article, we set the basis to understand what regenerative farming means and explore its sweet and sour aspects. In the second one, we cover the CAP policies from the green revolution to the current sustainable revolution. In this article, we give 9 pieces of advice learned during our research process to help farmers in their conversion to a regenerative agricultural model.

The conversion: How to?

Primary sector is not only about large corporations, it’s also about medium and small businesses. In the Spanish context, the majority of farms belong to medium or small farmers whose family economy depends on their profitability (Mesa, Romera, Daniel, 2022). In Spain, 67% of farmers are more than 55 years old (Torija, 2022), and sooner than later generational handover will happen. These facts lead to two thoughts: first, the agricultural sector, as any other business, must be profitable to sustain businesses and familiar economies, and secondly, change management policies are key to empowering younger generations of farmers to transition to regenerative farming, a new agricultural model that envisions circularity, long-term, sustainable and social goals. There is no straightforward or unique solution to convert into this new model, each farmer should evaluate which is the best option to run their own farms. However, below are some pieces of advice to guide in this transition.

1. Change from short term to long term soil strategies.

As stated in previous articles (Bagué, Berthelot, 2022), conventional farming progressively degenerates the quality and nutrients of the soil. In the worst case scenario leading to desertification. Regenerative farmers consider the soil as an asset that must be taken care of. Regenerating the soil and returning it to a fertile and nutritious natural state requires at least three to four years. A drop in production and revenue is expected during this initial period, and looking for ways to make this starting phase profitable is crucial (Can Font Organic, 2019). Producers should understand that regenerating the soil leads to an increase in the quality and healthiness of their products, among other benefits stated in our first article of this series, but this is not directly translated into an increase in the productivity rate. A long-term investment, from 5 to 10 years is needed to see the full impact of regenerative agriculture on the soil.

2. Explore new green finances: sequestering carbon and European fundings.

Matching or exceeding benefits through regenerative farming models needs time, meanwhile, farmers should find ways to sustain their economies. Bellow, we expose two novel ways to get extra financing during this transition:

• Get benefits from sequestering carbon into the soil: One of the goals of regenerative agriculture is to capture carbon as a way to enrich the soil composition, and by doing that regenerative farmers can generate carbon credits. These carbon credits can be sold in the stock market (i.e. Carbon credits [link below]) and purchased by industries and companies who use them to offset their CO2 emissions and accomplish Net Zero objectives requested by European regulations.
• Apply to NextGenerationEU fundings: In July 2020, after the COVID-10 pandemic, the EU launched the Next Generation fundings to help the economies of the European member states to be greener, digital, healthier, resilient, and equal. In Spain, these funds are supported through PERTEs (“Proyectos Estratégicos para la Recuperación y Transformación Económica”). In this artícle, we cover two of them, directly related to the primary sector.

The agroalimentary PERTE is a specific mechanism focused on helping the agroalimentary sector in 3 lines of work:

• 400 million € to improve the productive processes, increase their competitiveness, sustainability, and traceability
• 454,35 million € to increase the digitalization of all actors within the primary sector supply chain.
• 148,56 million € to support research and innovation

The digitalization of the water cycle PERTE is another mechanism to improve water management and reduce water losses during its lifecycle. Water reuse and back to nature are terms included in it. 200 million € from 3.060 million will be invested in digitalizing irrigation systems.

Farmers and producers, independently of their size, can benefit from PERTEs funds, when transitioning to regenerative agricultural models. However, it is recommended to look for specialized agencies that can deal with all administrative and official paperwork.

3. Increase the gross margin of products sold

Farming cooperatives are a way for farmers to join forces when selling their products in the stock market, however, these prices are set by the stock markets, sometimes, before the production is done. On the other hand, large retailers set their own prices guided by consumer demand and competitors’ pressure. These situations, among others, can lead to farmers’ incomes not always matching or surpassing the farmers’ cost of production, putting them in a risky situation that makes them vulnerable and dependent on subsidies to be profitable. Farmers who are able to manage a fair price of their products are the ones who ensure a profitable outcome from their productions. Regenerative agriculture allows for increasing the quality and nutritional value of the product, which means that products can be sold at a higher price, and hence increase their gross margin. In addition, it helps to minimize the costs related to the dependency on chemical pesticides, fuel, and fertilizers.

4. Trace the end-to-end lifecycle of products and establish trust relationships between different actors: farmers, vendors, and consumers.

In order to sell a product at a higher price, consumers should be aware of the health benefits and nutritional value of the regenerative product they are going to purchase. Traceability technologies, like blockchain, can provide transparency and visibility of all the value chain actors and processes. For example, consumers can track the origin of the food and know the story behind a product or a producer, can assure that the product is safe for consumption and compliant with Farm to Fork EU policies, or can be aware of the energy or waste impact due to their production or transport processes.

Traceability is not only beneficial for farmers who are selling directly to consumers raw products (i.e. olives, almonds) or processed ones (i.e. olive oil, cheese), but also for farmers who decide to sell their products to retailers. Because it facilitates retailers to better differentiate the qualities of the regenerative products from another assortment, establish a fair price per product sold to their consumers, and hence a fair price can also be agreed upon with the producers. Traceability also helps to establish a trusting relationship between vendors and farmers, as both actors can agree on a common code of conduct guided by environmental and social values, and show openly that they are compliant. It makes the relationship more resilient, as strategies and goals are shared.

5. Evaluate the best sales channels for the product

The act of selling is as necessary as the act of producing in any field. It also applies to the primary sector. Hence, defining a good sales strategy and evaluating the best sales channels to ensure that farmers’ productions meet sales demand is critical. Some options can be:

• Sell to retailers able to showcase the value of regenerative products and who have the willingness to negotiate the final price in a fair trade mode. This choice is feasible commonly when farmers can ensure a bigger amount of production for retailers.
• Explore direct sales to consumers (either at the farm site or at a delocalized farm shop). It can represent an advantage as final prices can be controlled by producers.
• Use online platforms that carry on sales and last mile logistics, from producers to consumers (e.g. CrowdFarming start-up in Spain). It allows reducing the intermediaries who erode the gross margin of the products sold by producers
• Establish partnerships with restaurants and other local institutions. It can represent an opportunity to sell local products and reinforce the idea of being climate-positive.

6. Understanding what guides demand and avoiding food waste

Every year one-third of produced food for human consumption is lost or wasted globally, which means spoilage of 1.3 billion tons per year, worth 1 trillion Euros. Of those, 40% of losses come from production and processing phases whereas the rest results from retailers and consumers (World Food Programme, 2020).

• When producing fresh and ultra-fresh products, matching consumption and production is even more important. Using platforms that allow sharing real-time data to balance production and demand helps to minimize waste due to overproduction. Online platforms like TooGoodToGo, help farmers to sell the surplus production that otherwise would be wasted.
• Do not cultivate the same as the neighbor or what the agrochemical industry can propose. Understand, instead, the consumer needs and adjust productions (products and quantities) to them. Also, evaluate external competitors that are able to produce the same sustainable products in huge quantities using new sustainable models and intensive agriculture (e.g. large-scale vertical farming).
• Reinforce digitalization. Demand planning software allows for capturing seasonal patterns, demand volatility, or disruption risks (external factors) that affect productions. Capture point of sales data, and use AI technologies and advanced analytics with this data, allow predicting better the demand behaviors. It will maximize production and benefits, and minimize lost sales due to shortages.
• Ensure a regular income source, mixing products with stable demand and seasonal products, and products with long and short spoilage rates.

7. Change from linear to circular models. Integrate livestock.

In conventional farming crops and animal rotation should be integrated to maximize soil potential. Close-by fields can easily be integrated into the (artificial) rotational strategy using movable barriers to separate crops and animals for pre-defined periods of time. The work consists in managing the land between resting periods and grazing periods. The soil needs approximately 70 days of rest between each grazing period to allow the plants to regenerate correctly. This technique is commonly known as Voisin Rational grazing. Animals are also a source of natural fertilizer, which decreases the dependency on external fertilizers, and helps to oxygenate the soil reducing the methane emissions and CO2 emissions when feeding free. It also avoids feeding them with products previously grown, produced, and transported using non-renewable energies and avoids minimizing the space within the farm to stock their food. Animals are very important to establishing circularity. It is ideal to have some on the farm (e.g. sheep). However, it is not mandatory as a farmer can always purchase manure (natural waste) from other farms.

8. Land use: delocalized fields and/or increase the yield per square meter.

In some areas there is a lot of pressure for other uses of land: making it difficult to get more land to manage animals in good conditions and accomplish PAC regulations (ie. manage nitrates correctly). However, renting fields in the area and managing delocalized fields can also work as long as the right infrastructure accompanies the process (e.g. if sheep are to graze far from the main farm, infrastructure to carry water will be needed). In case no more land can be afforded, establishing a circular approach, like integrating animals, can also increase the yield per square meter. And avoiding monoculture and diversifying crops allows for increased resilience.

9. Efficiently use of natural resources (energy, water) and specialized machinery.

Water is a scarce resource, in Spain approximately 80.5% of the water consumed is used for irrigation and agricultural uses, followed by the water supply to the urban cycle, which represents around 15.5%. Regenerative agriculture advocates for efficient use of natural resources such as water and energy, and consequently can benefit from the cost optimization derived. Using soil Keyline design or permanent green covers are great examples to preserve water in the soil, irrigate better all the surfaces, and maintain soil temperature. Permanent green covers at the same time favor biodiversity: nourish the soil without removing nutrients for the plants or trees to be sold, attract insects or predators that kill pests, and allow to feed animals reducing the dependency on fuel. Integrate livestock, promoting the use of solar collection systems, and making an in-house production of phytosanitary products are also examples to reduce the external energy dependence and diminish fuel consumption and hence the CO2 levels emitted to the atmosphere. Finally, when converting to regenerative agriculture new machinery is needed (i.e.direct sowing machine-tractor) and farmers should find ways to share specialized machinery to share costs.

References :

Berthelot, A., Bagué, A. (2023). Regenerative Farming (I): The sweet and sour of this new agricultural approach. Available at: URL link

Mesa, Romera, Daniel (2022) ¿Macrogranjas? Solo el 2,4% de las explotaciones españolas llega a 7.200 cerdos. Available at: URL link

Torija (2022) El campo envejece: la edad media de los agricultores es de 61 años y casi un 67% tiene más de 55. Available at: URL link

Can Font Organic (2019). Regenerative Agriculture on European Commission (English subtitles) / Agricultura Regenerativa. Available at: URL link

Carbon credits.com: Available at: URL link

European Union. NextGenerationEU. Available at: URL link

Gobierno de España. Plan de Recuperación, Transformación y Resiliencia.

PERTE Agroalimentario. Available at: URL link

Gobierno de España. Plan de Recuperación, Transformación y Resiliencia.

PERTE Agroalimentario. Available at: URL link

World Food Programme (2020). 5 facts about food waste and hunger. Available at: URL link

Ministerio para la transición ecológica y reto demográfico. Available at: URL link

Font, F. (2021) “Arrelats a la terra”. Editorial: Tigre de Paper (Bages)

CrowdFarming start-up. Available at: URL link