Valuation of regenerative agriculture management
How do we value the ecosystems services that regenerative agriculture management contributes? How do we account the cost of ecosystem damages that present mainstream agriculture contributes? Some thoughts from Jerry Hatfield:
From the Regenerative Agriculture Podcast with Jerry Hatfield:
John: And because we can’t see into it very well, we struggle to understand how to value it. What is the true value of biology? And I think this is a particularly challenging question in the context of agriculture because our agricultural economics are screwed up. We have an agribusiness ecosystem that has developed in which our crops have generally become commodities, operating on very low margins, combined with the challenge that we have historically externalized many of our costs. We have externalized the environmental pollution that has been caused by some of the toxins and pesticides that we’ve used—fertilizers, nitrates in water, etc.
So, when we look at all these factors from a macro perspective, what is the value of regenerative agriculture? What’s the cost of it? And what’s the return?
Jerry: I’ve often given talks to people who’ve asked the value of carbon, and I tell them it’s priceless. But they don’t want to accept that answer.
I think we’re at the point in agriculture where we need to move away from just talking about agriculture and begin to think about agroecology. How does agriculture fit into the ecological system? What’s the value of its different ecosystem services? What is the impact of agriculture on water quality, on water quantity? What’s the impact on the biological services that we see within the soil? What’s the impact on the biological activity we see associated with that agricultural field? How do we even look at that landscape from a different perspective? So, I think that when we start looking at that context of agriculture, then we can really have a fruitful discussion about the value of regenerative agriculture.
In regenerative agriculture, as we improve carbon, we improve water. And we also improve nutrient cycling within the soil. And not only nitrogen, but phosphorus and potassium and all the micronutrients. All of those pieces are now linked together, and those things pay me dividends.
As an example, take a silt-loam soil with 2 percent organic matter in it, and assume five-foot-tall corn in the middle of August in the Midwest. This is using water at its maximum rate. That plant has about eight days of available water before it begins to be stressed.
That’s not very much. But if there’s 4 percent organic matter, the plant can go for thirteen days without water. You’ve got five more days of available water for that plant to perform to its optimum, without stress. The probability of getting rainfall during a five-day period across the Midwest is still pretty good. My point is that this is one of the ways regenerative agriculture produces value.
The other thing we see is that when we enhance nutrient cycling, we have a greener plant—a more photosynthetically efficient plant—so that more carbohydrates go into that plant. This not only improves grain production—it also continues to feed that root system so that it becomes more effective all the time.
That’s where yield stability comes from. We will become less affected by the weather variation that is going on—the longer periods of time between rainfall events.
You’ll always have parts of a field that are low yielding. The high-yielding parts of that field are always really good soils. The low-yielding parts are always those really poor soils that have low water availability and low nutrient availability.