Farms which sequester carbon perform better financially
Regenerative and ecological agriculture is based on two convictions:
- That a massive transition towards regenerative agriculture will only be possible if farms become more profitable at the same time
- And you can only improve what you can measure
Soil Capital has therefore developed a diagnostic tool for analysing farming practices in relation to their impact on profitability and the environment. The tool is called mySoilCapital because soil is a farmer’s capital.
The first farmers who tested the system found it to be a highly innovative, insightful and robust decision-making tool for improving their financial performance while meeting environmental challenges. Amongst other features, mySoilCapital lets farmers compare themselves to other farmers in the region, and to identify the most relevant actions for their farms.
To date, around fifty farms from Hauts-de-France and Wallonia have signed up for an analysis of their farms for the 2018-2019 season. Even though it is too early to draw any definitive conclusions, here are some initial observations which we can share at this stage.
In a nutshell:
- The average farm is registering a 30,000 euro per year shortfall (EBITDA) compared with their leading group
- The farms with the best financial performance are also the ones with the best greenhouse gas performance
- It is possible to sequester greenhouse gases in the vast majority of crops analysed
To date, we have been able to observe that the average farm is reporting a 30,000 euro per year shortfall compared with those with the best per ton production costs. This analysis includes all variables: mechanisation and amortisation, as well as working hours for farmers. According to this analysis, which covers twenty-five crops, 80% of these savings can be made on wheat, potatoes and sugar beets. Encouragingly, farms with the lowest per ton production costs have generally achieved better yields.
It also seems that the farms with the best financial performance are also the ones with the best greenhouse gas performance. The graph alongside this post shows this trend. The analysis is rooted in the Cool Farm Tool methodology, developed by the universities of Wageningen in the Netherlands, Cambridge, Oxford and East-Anglia in the UK, and GFZ, the German research centre for Geosciences. Supported by organisations including AB InBev, Danone, Heineken, Mars, Nestlé and Unilever, the Cool Farm Tool has been extensively tested by scientists and is widely recognised throughout the agri-food sector.
Finally, our analysis would seem to show that it is possible to sequester greenhouse gases in the vast majority of crops analysed, including potatoes and beets, crops which generally consume a large quantity of artificial fertilisers and for which intensive tillage may be required. Key factors are the use of cover crops and the reduction or elimination of tillage over several years, enabling a significant return of micro-organisms in the soil, and therefore of carbon. “If the results of this analysis are confirmed”, explains Macha Bertrand, Business Partnerships Manager for Soil Capital, “it would mean crops and farming practices which offer better CO2 performance could also offer better financial returns for farmers, on top of new income which carbon sequestration could provide in the near future.”
Soil Capital carried out a feasibility study to assess the possibility of designing a project involving European farmers to reduce and sequester greenhouse gases. Following an independent audit process, including feedback and improvements, ECOCERT Expert Consulting confirmed that the content of our study complies with the principles set out in the ISO 14064–2 (2019) standard. That gives extra credibility to agri-food businesses that want to offer products with a positive environmental impact or organisations that want to offset their emissions by supporting local initiatives.
About Soil Capital
Soil Capital is a company of independent agronomists and finance professionals who are trying to find ways of improving the financial and environmental performance of farms at the same time. Active in several countries, Soil Capital has set itself the target of supporting farmers in transitioning one million hectares towards more profitable and regenerative farming practices by 2025.
To achieve this ambition, Soil Capital is putting in place a community of independent agronomists to support farms in their transition towards more regenerative and profitable agriculture. Soil Capital provides support services for agronomists in the community. These services include sharing technical expertise, training modules led by international agro-ecological leaders, decision-making tools and support in accessing new markets.