Enhancing soil health and biodiversity is critical for ensuring food security for future generations. Transitioning towards more sustainable agricultural practices like organic or regenerative agriculture seems to be the most viable solution that can make it possible.
On the other hand, chemical-based agriculture, which is predominantly practiced across the globe has its own disadvantages – Chemical residues on the produce, soil and water contamination, biodiversity loss, GHG emissions, etc. But over the years, chemical-based agriculture has made a lot of difference in providing the world with sufficient food by improving farmers’ productivity and food affordability for consumers. So transitioning toward organic or regenerative agriculture is not an easy task.
Challenges in transition
• Short-term yield loss
• Certification costs (for organic)
• Organizing the smallholders
• Lack of expertise in yield optimization
• Lack of access to the right buyers
Rather than expecting the farmers to change their mindset to adopt the organic/regenerative practices, the business model approach of incentivising the farmers can make the adoption feasible.
Business Model Approach
The business model approach starts with core target consumers. The growing trend of consumers seeking healthy and planet-friendly foods provides an opportunity for the Agri/food companies to promote and sell regenerative products. Consumer health and/or taste can be the core differentiating attributes that can help regenerative products to be competitive in the market. Further adding value to these products that can improve the convenience of consumption also provides an excellent market opportunity.
An aligned distribution strategy is critical for regenerative products to reach the target consumers, who can rightly perceive the value of such products and are willing to pay a premium price. Also, environmental sustainability is the outcome of such a business model, which can help in brand building of the business further supporting the adoption
Such business models can help incentivise the farmers to follow regenerative practices by providing better prices for their produce.
Also, there is an opportunity for the farmers to gain alternate income through carbon trading. Carbon in the atmosphere can be sequestered into the soil by following sustainable agricultural practices like organic or regenerative agriculture. This provides an opportunity for the farmers by selling their carbon credits to companies that aim to achieve net-zero emissions. For many (e.g.: Oil and gas majors, transport, etc.), it will be necessary to use carbon credits to offset emissions they can’t get rid of by other means.
If you are curious to understand more about Regenerative Agriculture, Carbon farming, or designing a business model, you might be interested to access the following courses on this platform: