Systemic Investing for Regenerative Agriculture
This is the first article in a series to present insights from our Regenerative Food & Agriculture Prototype in the Midwest region, USA. You may read Part 2 here.
Place: Midwest, United States
System Type: Food System
Challenge: Transforming a key real-economy system in the United States
Partners: New Capitalism Project Lab
If you have reached this article, you likely don’t need a detailed explanation of the negative externalities of the industrial food system, so here is a quick baseline refresher of the problem.
Regenerative agriculture has long been hailed as a remedy to these issues as it has the ability to improve soil health, increase plant and vegetation diversity, and preserve living root systems in soil. Regenerative practices can minimise or even eliminate reliance on synthetic inputs. Restoring land use using regenerative principles can also support biodiversity and carbon sequestration.
This is why we are excited to explore how to catalyse the uptake of regenerative agriculture by reimagining how to finance the transition.
Why the Midwest?
The Midwest region of the United States offers an exciting opportunity to pilot systemic investing for regenerative transitions. It is the world’s largest soy and corn belt (representing over 75% of the region’s arable land), making a large-scale transition impactful for both climate and social outcomes.
In addition, there is a constellation of organisations in the region supporting ecological agricultural practices, providing potential collaboration opportunities. The region also offers substantial agricultural data (Indiana is a good example; more on that here), which matters because having consistent and accurate agricultural data is crucial in demonstrating the potential of regenerative agriculture and paving the way for better financing options.
Finally, a significant number of farmers already practice no-till farming and cover cropping, both of which are integral regenerative agriculture practices.
What is Regenerative Agriculture?
“Regeneration means putting life at the centre of every action and decision.”
- Paul Hawken on Regeneration: Ending the Climate Crisis in One Generation, 2021
Our work is focused on deep transformational change — not simply ‘do less harm’ but actively regenerate so that landscapes can restore their ecological functions. A regenerative food production system nurtures and restores soil health, protects water resources and biodiversity, and can also enhance a farm’s resilience to climate change.
Regenerative agricultural systems operate on a changing set of principles that are applied uniquely depending on the land and production contexts in which it is situated. Some of these principles are:
- Fostering diversity of plants and animals
- Renewing soil health, eliminating bare soil and avoiding tillage
- Planting cover crops and perennials
- Encouraging water percolation into the soil
- Integrating livestock
What is our role?
TransCap Initiative is primarily involved in designing a systemic finance strategy and funding vehicle for the agricultural transition in the Midwest region, USA. TCI will also work across a spectrum of other “non-investable” levers representing public goods and, therefore, still require “investment”, such as policy and technical assistance. The purpose of such “nesting” is to ensure that the portfolio of real-economy assets is well aligned with a broader set of system interventions, all designed for their collective, synergistic ability to generate transformative dynamics.
What will happen in our prototype?
Over the next 12 months, we will conduct a systems diagnosis through desk research and stakeholder interviews. Specifically, the learning questions for this prototype might include the following:
- What are the key enablers and barriers to the adoption of regenerative practices?
- What are the ways in which capital needs to flow to support the transition to regenerative agriculture (and how is that different from today)?
- How might we create a financing ‘blueprint’ for regenerative agriculture at the regional level?
- How might we create a systemic financing vehicle in a context where multiple stakeholders have diverse interests and often divergent political views and agendas?
- The goal is to create a joined-up approach across the system to accelerate action on the ground by determining where and how capital needs to flow to tip a system towards a desired state.
This project is a part of the New Capitalism Project Lab, a field-building effort that supports communities of leaders in the development of nascent, transformative, and collaborative ideas that put a shared vision for a better economic system into action. The New Capitalism Project is hosted by the Global Impact Investing Network (GIIN), which has played a key role in conceptualising and launching this endeavour.
If you want to learn more, reach out to Ivana Gazibar and Andre Ticoulat.
