Soil degradation is a major agricultural issue that is putting global food security at risk and creating hidden expenses in agriculture, as experts shared during a webinar presented by crop input and seed company Syngenta on Soil Health Day (Dec. 5).
Nearly 40% of the world’s lands are degraded now, according to the United Nations. This comes as “a growing body of research showing that all classes of crop protection chemicals ... adversely affect all major taxa of soil organisms,” according to the Organic Farming Research Foundation.
When working at the University of Boulder Colorado, Jason Neff, soil and climate innovation principal scientist at ag input company Syngenta, studied the cost of soil degradation on the agriculture system, using U.S. data on how much organic matter (i.e., nitrogen and phosphorus) was in natural systems vs the current agricultural production system.
“It turns out that the difference between what [current systems were] and what it could be amounted to about $500 million per year in expenses that are just going out the door because you do not have that native fertility. And so that was a real eye opener for us in terms of thinking about these hidden costs, and the ways that we can actually try to address this,” Neff elaborated.
Can tying soil health to crop insurance improve farming practices?
The farm safety network – whether it’s crop insurance or government support – leaves little room for U.S. farmers to test out regenerative agriculture or adopt greener farming practices, as shared in a recent CIBO Technologies webinar.
We are at the beginning of figuring out how do we price in resilience into markets that are mostly right now focused on optimizing or maximizing production.
Dan Kane, director of science at Mad Agriculture
One way to promote better soil health practices is by tying soil health to crop insurance, Dan Kane, director of science at Mad Agriculture, said on the panel. During his master’s studies at Michigan State University, Kane explored the connection between soil health in the Midwest and how farms fared against extreme and moderate droughts.
“What we ended up finding was that across the U.S., counties that had soils with higher organic matter tended to fare better in moderate and extreme drought conditions. So, if you’re thinking about basically the ‘I’ states — Illinois, Indiana, Iowa — they under really extreme drought conditions saw lower yield losses. ... They had fewer crop insurance liabilities as well,” Kane elaborated.
He added, “It’s not just about [carbon] sequestration into the soil but also about the co-benefit of resilience. So, I think we are at the beginning of figuring out how do we price in resilience into markets that are mostly right now focused on optimizing or maximizing production.”
Demonstrating the investment opportunity in soil health
Convincing investors and institutional sources of capital – like pension funds – in investing in soil health is less about sharing a feel-good story and more about demonstrating the economic value that can be unlocked from sustainable farming practices, the panel explained.
Fractal Agriculture is a passive ag financer that offers loans through an owner-operator model, where it takes a partial stake in the land. Fractal Agriculture then charges an annual premium on the farmer’s loan, which farmers can reduce by performing certain soil health practices.
These soil health practices are not only helping farmers save on their loans, but they are also seeing better performance, Emma Fuller, co-founder of Fractal Agriculture, noted in the panel.
“Pensions [and] big institutional sources of capital, they require track records. They require to see this deployed. And so, it’s actually less of a ‘let me tell you a story about the number of earthworms’ and way more about you can just look at our portfolio. We are outperforming traditional farmland alternatives, and you want to be in farmland because it is a diversifier, because it is lower risk. It reduces volatility,” she elaborated.
