89 Jeroen Klompe on building a fair farmers first marketplace

An interview with Jeroen Klompe, co-founder of Klompe Landbouw and Soil Heroes, on why everything starts with biodiversity above and below ground.

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Learn how one of the most advanced regenerative farmers in the Netherlands is setting up a fair farmers first marketplace to connect farmers with buyers of ecosystem services.  It is not just about carbon removal, but also biodiversity and water storage. It might not be the most sexy part of regenerative agriculture but it is absolutely crucial. How do we pay farmers for all the other services they provide, beyond the food, fibres and oils they (hopefully using regenerative practices) produce for us?

More about this episode on:
https://investinginregenerativeagriculture.com/2020/08/11/jeroen-klompe/.

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Transcript

Koen van Seijen: 0:19

Why everything starts with biodiversity above and below ground and how one of the most advanced regenerative farmers in the Netherlands is setting up a fair farmers first marketplace to connect farmers with buyers of ecosystem services. Not just carbon removal, but biodiversity and water storage as well. It might not be the most sexy part of regenerative agriculture, but it's absolutely crucial. How do we pay farmers for all the other services they provide beyond the food, the fibers and the oil they, hopefully using regenerative practices, produced for us? Welcome to another episode of"Investing in Regenerative

Agriculture: 0:55

Investing as if the Planet Mattered", a podcast show where I talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Why am I focused on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land grow our food and what we eat. And it's time that we as investors, big and small, and consumers start paying much more attention to the dirt slash soil underneath our feet. In March last year, we launched our membership community to make it easy for fans to support our work. And so many of you have joined as a member, we've launched different types of

benefits: 1:38

exclusive content, Q&A webinars with former guests, ask me anything sessions plus so much more to come in the future. For more information on the different tiers, benefits and how to become a member, check gumroad.com/investinregenag or find the link below. Thank you. Welcome to another interview of"Investing in Regenerative Agriculture" today with Jeroen Klompe we are live. We haven't done too many interviews live actually in this series or in any of the podcasts I'm very happy to do that, because it always adds a bit, especially after locked down to be able to not do this through a laptop. Jeroen Klompe is the co founder of Klompe Landbouw, Klompe Agriculture and Soil Heroes and he's building with the team, a farmers first fair-chain model to connect buyers of ecosystem services directly with farmers. They have the slogan "don't compensate but regenerate" and full disclosure, I'm an advisor to Soil Heroes and I'm very much looking forward - we've been talking about this interview, I think for the last three, four years - I'm very much looking forward to learn more fair chain, farmers first, compensate, don't compensate but regenerate. So welcome Jeroen.

Jeroen Klompe: 2:46

Thanks, Koen.

Koen van Seijen: 2:47

And we're here at your farm so we're going to hear some probably some background noises of large machinery etc. which is very suitable because obviously we're not in the studio. I know a bit of your background story. But I think it's absolutely fascinating to unpack that a bit. How did you end up running this farm just south of Rotterdam in the Netherlands just situated a bit? It's raining outside, we're in July 2020? How did you end up running this farm? How did you end up on soil?

Jeroen Klompe: 3:13

It's actually, it's a family business. So I'm a fourth generation farmer at the moment. And the fifth generation is ready to step in in a couple of years. My background is in farm land management, farm land investment and I was always busy with building business models on and around farmers. How can we make the best out of a plot which is available. And then you are going to look in different way to soils. And you can look at it for let's, let's build houses on ii but you can also grow very beautiful food on it. And that was the starting point that we were going to start with working with soil. And I'm working with soil now for 25 years now that I've had a normal job for seven months. And then I became an entrepreneur and I still am an entrepreneur.

Koen van Seijen: 4:06

And you took over the farm, you bought actually the family farm we're here like I said, just as a Rotterdam. Can you describe a bit the dimension what should as we are in audio people cannot see where we are. What should we imagine when we talk about the family farm you're running at the moment. For Dutch circumstances it's not a small farm and not a very big farm. We are operating at this moment on 350 hectares and they are in a circle of let's say 10 - 12 kilometers around the center, or home. It's mostly divided into blocks of 40 hectares. We are running a very diverse crop rotation. I think it's 60-65% at this moment is in full transition to regenerate farming. And the rest is still conventional but sustainable. And on the regenerative side we have already fields which are in transition for eight years now.

John Kempf: 5:06

And so let's say 8, 9, 10 years ago, was there one trigger, was it a process? What was the trigger to say let's look different at soil because you've been farming, you've been in farming but you didn't have this super focus on soil life.

Jeroen Klompe: 5:25

No, no, no. It actually started all with potatoes.

Koen van Seijen: 5:28

That's probably a first in this podcast that somebody says that, okay, explain.

Jeroen Klompe: 5:32

We were growing potatoes is one of the best crops on this farm. And I had a vision to build a vertical short supply chain, where we could deliver potatoes to families on a very short way cutting out the middleman, and the big goal was that the children on the table would ask their mommies "Oh Mom, can I get some extra potatoes because they are so extremely tasteful". That was my vision because if it's tasteful, if it's full of nutrients, people are going to buy again, and we can make a sustainable business model on it.

Koen van Seijen: 6:06

Really demand driven.

Jeroen Klompe: 6:07

Yes, yes. Instead of calling the opposite, being called, was my goal. And to achieve this, we're studying how a winery works. They have their own marketing, they have their own packing facilities, etc. So what are the ingredients to do this, and then we learned, oh, you need to have a very good variety, you need to have very good soil, and you have to feed those plants on a very right way. And it sounds easy, but it is complicated. So in the end conclusion, it's all about building soil. If you have a healthy soil, you can grow healthy plants, and healthy plants provide you with healthy foods. And what we've learned in last years, if you have a healthy food with a lot of nutrients, it's extremely tasteful. So that was the starting point 10 years ago to start building soils. And therefore we needed to invest in our soils, because you have the cooperation between the organic matter, between the soil biology and the nutrients and they have to go working together. So we have to accelerate this whole system in this process. And that was not an easy way.

Koen van Seijen: 7:21

You remember what was the first thing you did, like when you came to the realization it's about soil life, I have to invest in my soils, or in our soils, what was the first step? Because there are 5 million books, 10 million videos...

Jeroen Klompe: 7:36

Just the low hanging fruit, our organic matter level was low. So we think, oh, we have to add compost, because then we have a higher organic matter level, and then it will flow and it will go working. No.

Koen van Seijen: 7:51

You add a compost, but it didn't work.

Jeroen Klompe: 7:53

It didn't work, then we will think "oh, our soils are compacted."

Koen van Seijen: 7:57

Which is a huge issue here in the Netherlands.

Jeroen Klompe: 7:59

Huge issue. So we were going to de-campact the soils. So we invested in CTF farming and all the kind of

Koen van Seijen: 8:05

What is CTF farming? thing.

Jeroen Klompe: 8:06

So that all our crops are growing in unridden soil. So we're not compacting it.

Koen van Seijen: 8:11

So you're always driving basically in the same lanes. So every year, you only farm in between the lanes, and you never drive on the fields that you're farming.

Jeroen Klompe: 8:21

And then we were for example examining the amount of food for the plants in the soil. Oh it was too low, so we add extra nutrients to it. Still not working. And then we learned through all our journeys around the world - and my wife she's an environmental scientist so she knows also a little bit about how ecosystem service works of how ecosystems service systems work - we need soil biology!

Koen van Seijen: 8:43

You need life in the soil.

Jeroen Klompe: 8:45

We need more life in the soil.

Koen van Seijen: 8:46

And I'm imagining she probably was saying that for a long time, and maybe you were buying your fancy equipment and driving in the same lanes...

Jeroen Klompe: 8:54

I was not listening to that.

Koen van Seijen: 8:56

Life, life, life. Biodiversity.

Jeroen Klompe: 8:58

I thought it can all be solved with investing in a lot of machinery, but that's not true. It's about investing in a lot of employees in the soil and it's called earthworms, bacteria and fungus nowadays. So what's the - because there's a lot there and I'm pretty sure we're gonna have your wife Melanie on the podcast at some point as well to really dive deep into that - so let me ask one question on that, what's the weirdest thing you've done to build life in your soil? Something you 15 years ago or 10 years ago, you thought I would never. The weirdest thing...

Koen van Seijen: 9:28

Or the most surporising maybe.

Jeroen Klompe: 9:29

The most surprising thing is that we have started making our own mother cultures and bio fertilizers on our farm to accelerate the biology in the soil. And that we could do that on our farm, on a low cost base by just multiplying fungi and bacteria from a very old forest and it's just multiplying, multiplying, multiplying, and then adding the right nutrients to that and then fermenting this with compost extractions in it with the monoculture in it, with milk with yeast, etc. That's such a beautiful process, which is the 30 or 60 days process, and you can do that on your farm and you can use it for plant resilience or you can use it for increasing your biomass or you can make your own inoculants for the compost or the solid manure. That Amazing.

Koen van Seijen: 10:20

So the fact that you could do that on the farm, he didn't have to buy a lot of fancy equipment, but you needed to learn how to do that. And just, I mean, I think many of you have maybe seen it on very small farms but this is a massive 350 hectare farm, meaning you're doing this on a large scale. It's still small, it's not a factory, but it's definitely not a few pans and pots.

Jeroen Klompe: 10:41

It's a small bre ery within our farm. And I alw ys explained on the right way you have to listen to nat re because nature has all the olutions for us. But we have lost connection with nature in t e last 15-50 years. And just how does nature solve those pro lems? What are the companion cro

Koen van Seijen: 10:59

What is it biodiversity lane, just for s of a cash crop with a cer ain disease? How can they hel each other that's all a way of hinking. And it's just by add ng those very strategic fun i in your bio fertilizer, you can make the plants more res lient and diseases won't att ck your crops. And it's the sam with what Melanie has done wit 800 kilometers of bio iversity lanes, just int oducing our natural enemies in ur farms by combining nature and modern farming, there is bal nce again and we don't have roblems with aphids anymore. people that?

Jeroen Klompe: 11:38

We have written a computer program that we can calculate what is the most efficient part of the field where we can farm a cash crop. We are farming on that part, and all the inefficient parts...

Koen van Seijen: 11:51

All the edges, all the parts that you turn with a tractor or combine but you don't really want to farm there. You're farming there in many European countries because you got subsidies for every extra square meter you squeeze out but you actually figured out it's not efficient to farm, not effective at all.. And you planted something else.

Jeroen Klompe: 12:09

Yes. And so we gave that back to nature. So we were sowing flower mixes, grass mixes.

Koen van Seijen: 12:14

You didn't give it back. In a sense, it's not that you just left it and let's see what comes up. No, you very deliberately planted a mix of flowers, biodiversity, plants, that provided a home.

Jeroen Klompe: 12:25

Yes, that attracts bees, that attracts all the natural enemies of all the insects etc.

Koen van Seijen: 12:30

On the island here, there are 800 kilometers of biodiversity edges. And what has been the impact on say the fields nearby?

Jeroen Klompe: 12:39

It's extremely good for pollination. So all the crops we were growing which depend on pollination, the yield has increased.

Koen van Seijen: 12:48

More than the yield you took away from not planting there, because that's obviously the next question. Well you plant a certain lain, in a few, let's say, alongside the field, maybe one or two meters wide or one meter wide, you lose that. It wasn't the most effective piece anyway. But it also increased the yield of the the cash crop zone.

Jeroen Klompe: 13:07

Yeah, there was a leverage effect. From the moment we started with the biodiversity lanes and the field margins, we have stopped using insecticides immediately. And what we've learned is that they can fly 100 meters into the fields and do their job. So if you have a field of 200 meters wide, you need on both sides, you need biodiversity edge.

Koen van Seijen: 13:32

And coming back to the biofertilizer. If you had to name one example, what has been the impact on the soil? What have you noticed over the last years for your main cash crops as an example. Did you have to irrigate less? Did you see better growth? What has been- apart from the fact that it's fun to make much cheaper than buying a lot of bio fertilizer - what has been the impact on the farming?

Jeroen Klompe: 13:54

What we are seeing after a couple of years that water holding capacity is increasing. So in dry periods, there is much more water available for plants. So irrigation is going down, we can see that the depth of the roots is much deeper. We can see that the plants are stronger, they have a natural smile, because they have more access to other micronutrients.

Koen van Seijen: 14:17

So the fields feel better.

Jeroen Klompe: 14:19

Yes, yes.

Koen van Seijen: 14:19

It's funny because John Kempf always has the most advanced farmers. They walk into a field and they sense, they feel, they see something is off or something is going well. You said these fields where you've been applying the right type of biofertilizer, homemade, they sense, they seem, they feel better than others, they're smiling.

Jeroen Klompe: 14:37

Yes, yes. The plants are stronger, they have bigger stems, and they have a natural color shining finish on their leaves.

Koen van Seijen: 14:46

They seem healthy.

Jeroen Klompe: 14:47

Yeah, they seem healthy. So water holding capacities is going well, plant resilience is better, less irrigation, a little bit higher yields and we can see after eight years that the cost price is going down because we are rebuilding the battery of soils.

Koen van Seijen: 15:02

And this sounds all amazing. You have your farm here and actually I'm gonna, let's stay with the brewery for a second because we actually have discussed one of the companies you're a part of in a previous podcast, I will definitely link in below which is Tomasu with Bert, the Soy Sauce brewery. I think it is an example of your quest for searching for direct to consumer, or directorer to consumer, you've done many things, we've talked about the potatos before, I know you've done others experiments not all successful some yes, some not. How did from the farmer perspective - and then we'll switch to the ecosystem services- how did the soy sauce happened? Because we heard the version of the soy sauce company how they found you. But how did that happen? And why is it so interesting from a farm perspective to be in soy, in grain and in taste? Because that came back there very strongly, to think of that obviously. What was the origin story from your side with the soy sauce company?

Jeroen Klompe: 15:51

Yes, I was searching for new and as I'm always searching for new business models on soil to have a higher financial impact. And therefore, there was the upcoming movement of the green proteins. And we wanted to have more diversity in our crop rotation so we started growing legumes, which are a nitrogen fixer for soil. So it's good for the nitrogen balance of the farm. And we started with kidney beans, brown beans and white beans. And on a natural flow they're okay, the soybeans also, because it's a product which is used on a large scale, so I was looking if we can make some plant based dairy from that, or it was just a trial.

Koen van Seijen: 16:35

How many years ago was this?

Jeroen Klompe: 16:36

Six years ago, I guess.

Koen van Seijen: 16:38

Before the whole movement really took off. I mean, it was going, plant based milks didn't take over the supermarket yet.

Jeroen Klompe: 16:47

No, not yet. So because soybeans have a lot of possibilities to provide products with it. So you can make milk of it, you can make sources of it, you can make tofu of it, lots of products.

John Kempf: 17:00

And fermentates, yeah. We'll come back to fermentation.

Jeroen Klompe: 17:02

Yes. And we also saw a movement that was a big appetite for ancient grains and gluten free grains. So therefore, I went into a miller, can you help me with milling my products, and maybe we can connect to some customers. And that was the connection point where a strange baker visited the miller also, and they said"What do you want is not mainstream yet, it's very nice, and I don't know it yet but..."

Koen van Seijen: 17:33

I know someone.

Jeroen Klompe: 17:34

"...two weeks ago, there was also a lunatic who wants to do something with grains and soy beans, etc. maybe you can call each other."

Koen van Seijen: 17:41

Luckily, he made the connection.

Jeroen Klompe: 17:42

Yes. And that was at this same place where we make also our plans for the whole Soil Heroes company. That in two hours, we decided to go working together and we have a successful brewery at the moment.

Koen van Seijen: 17:55

And focused purely, because the whole soil part wasn't part of the origin story, purely on taste. That was their quest, taste, taste, taste. And then they discovered the nutrient part, the soil part, the farmer part, which I think highlights something very important, you need a market for your products, that buy enough. So you cannot go, I mean, you cannot go with your potatoes and your onions to the farmers market. It needs to buy enough and for a good margin.

Jeroen Klompe: 18:22

It's all about scarcity and it's all about de-commoditizing your products.

Koen van Seijen: 18:28

Which is a perfect bridge, because you've worked for probably eight years in creating these markets for your products, your physical products that come from the farm that turned into french fries, that turn into soy sauce, etc. What was the moment, if you remember if it was a moment, but that you started thinking "okay, these ecosystem services, not a nice name, but they sound interesting, are there other markets that we as farmers, that are on this journey because you have been on a journey, should explore?"

Jeroen Klompe: 18:56

Yes, it affects that we all are stuck in a system with commoditized food, where it's all about the cost price.

Koen van Seijen: 19:05

And not about the quality, and not about the

Jeroen Klompe: 19:06

And not about quality, and not about the taste.

Koen van Seijen: 19:07

They're niche, by definition. taste. And we also depend on the, we are in the highest end of the commodities but it's still a commodity. So if you want to step out of the system, you have to build business models. So you can focus on the niche markets, we've done with

Jeroen Klompe: 19:21

They are niche by definition and it takes seven the potato, we've done with oy sauce, etc. etc. But then the niche markets ar in development and if you want to have... years to build up a company. So, what we learned during our journeys around the world and during our practices for soil improvement, that if you are changing your mind and you will start building soil again that you are also going to provide a lot of beautiful things nature gave us so water holding capacity, carbon sequestration, biodiversity, stopping of erosion. Now bio based products, a lot of beautiful things soil can deliver us.

Koen van Seijen: 20:04

Which are not food.

Jeroen Klompe: 20:05

Which are not food. And then just by reading the newspapers, what are the big problems of humanity, we have a carbon problem, we have a sweet water problem, we have big problems with land degradation, we have big problems with erosion with dust winds, etc. all around the world. So I was just thinking on a very easy way, if soil can deliver us such beautiful things, which is called ager, and we can see that there is a big growing extremely money absorbing problem. If we can connect those things, then the services soil is delivering, what we call ecosystem services now, has value. So if we can build a cycle of soil improvement for extreme good food, which you can sell in a vertical supply chain, with high nutrients, and a beautiful taste, and at the same time, you can deliver ecosystem services in the way of water holding, in the way of stopping erosion, in the way of carbon sequestration, or biodiversity - they are four big ones at the moment - and you can sell them, you have extra income as a farmer to invest again in your soils. So and then we have a positive spiral upwards.

John Kempf: 21:25

That's what you mentioned, you came to the realization I need to invest in my soils, but there was no market, no marketplace and no money willing to say "Okay, Jeroen great, you're going to store a lot of carbon and store a lot of water, restore a lot of biodiversity. Let me pay you for that." You're very close to Rotterdam, very close to an enormous harbor that has an enormous environmental footprint, but about eight years ago, there was nobody able to say "Okay, I can pay you for those services, I can pay for the beauty, I can pay you for the erosion, that's not happening". And you decided to start that market. What was that click? Because he could have stayed here on the farm, continued your regenerative practices, waited for somebody else to come and say, Okay, I can sit at the kitchen table. And I can be the one selling for you those services, what was the switch to the entrepreneur saying "I will ...

Jeroen Klompe: 22:20

It was a repeating process of voices in my head and in my body and from my heart, which was saying, this whole system is possible to realize, we can build soil, we can restore all the degraded farmland in the world by just using very natural practices, and then we can deliver such beautiful things. So soil is a problem, but can be a huge solution. And all the dots were continuously connecting in my head. And that gave me the evidence and the trust in myself that we can do this and we can, we can help other farmers with such a system. So we can empower the farmers bottom up with a beautiful system, that they are stronger in the market. And that other farmers can also build business models on their soil.

Koen van Seijen: 23:11

Which is very different from: I can see this opportunity, I know a few of the recipes now, what works what doesn't work, and I'm just going to expand my farm to 3000 hectores and be fine. No, I'm going to help other farmers, partner with other farms, empower other farms, you just said. Why that empowerment?

Jeroen Klompe: 23:32

Because in the essence, I am a farmer. I'm the son of a farming family. And if I drive around, I can see every farmer stucked in a system, he's not happy in the system, he has to deal with the demands of the retail, etc. etc. And there are such more opportunities for them. And there is a big task of the farmers in the future to restore Mother Earth. And we can do that. So let's do that all together, because then the

Koen van Seijen: 23:59

So let's unpack that. What is this system? What impact is much, much bigger. And fortunately, I had the vision of that system in my head that if we can build a system which can monitor what is happening in the soil, and if we can put it through a system where we can calculate the quantity of ecosystem services, then we are also able to monetize it, and then we can hopefully start a market. is Soil Heroes at the moment, we're talking in the middle of 2020. And we'll talk about the vision as well. But what, I'm a farmer somewhere in in Ireland, somewhere in Germany, somewhere in the UK, somewhere in France. And of course I love the vision. What could Soil Heros be to me, I have 50 hectares and I'm making my first steps but I would love to go faster. What could Soil Heroes be to me?

Jeroen Klompe: 24:50

Soil Heroes is in the essence a platform where the platform can help a farmer giving him access to consumers or buyer, companies or governments or nonprofit etc. who have the willingness to pay for ecosystem services. And this platform is connecting those two parties on a very open and transparent way to make a peer to peer deal. We can help the farmer with a recipe book, how to accelerate the soil improvements, and then we have a protocol of the steps he has to measure in his soil, starting with timestamps zero, so it's the beginning. And then he starts farming, we start the whole measuring and monitoring process. All those data is going into our models, in our calculation system. And then the quantity of ecosystem services, and we're focusing in this moment on water, biodiversity and carbon.

Koen van Seijen: 25:43

Why those three? Because we've done the interview with Nori, which is purely carbon focused. Other people, it seems to be that everybody's going crazy for carbon. Why those three?

Jeroen Klompe: 25:56

Very good question. If you start improving the quality of soil, if you start building soils, you are not delivering, you're not only sequestering carbon. You need to improve your biodiversity, you need to improve the water holding capacity. So it's not about carbon only. It's about the whole approach of all the ecosystems services. And there are I think 12 or 14 different ecosystem services.

Koen van Seijen: 26:22

So you're saying we're only focusing on three, but they're actually another 11 that we could use in the future.

Jeroen Klompe: 26:27

Yes, and they all have a big value. It's called the natural capital of society. You cannot say oh I only do carbon sequestration...

Koen van Seijen: 26:34

No then you put a machine on your land to suck the carbon.

Jeroen Klompe: 26:37

Yes. And therefore, the whole vision of accelerating the soil improvement, then it's also about a basket of ecosystem services.

Koen van Seijen: 26:46

So I can as a customer, sorry so I'm not the farm now, farmer, I will come back to that but I'm a customer that wants to buy, because I'm buying the basket. I'm not buying the water because I'm a big fan of water, no I'm buying the full package. Because otherwise you might create incentives for the farmer to only focus on, to more focus on the biodiversity but you want the full package. Okay, so as a farmer, I know that sounds amazing. You can connect me, or you through the Soil Heroes marketplace I can connect with buyers. You mentioned the monitoring. So it's not model based, but it's what's really happening in my soils, on my soils, around my soils. How do you monitor that?

Jeroen Klompe: 27:28

Let's make one thing clear, we are not able to simulate all the things which are happening. We are working with the best universities at the moment to build models of what we think is happening in the soil and what is measurable.

Koen van Seijen: 27:45

So based on what I can easily, cheaply measure and what we can imagine based on the best models, again, fed by more measurements to figure out okay, we think we probably are pretty sure that the biodiversity increased by x and the water capacity. And then the next year you measure again and your models become...

Jeroen Klompe: 28:04

Yes. If we can see an improvement, we are adding ecosystem services. And just by calculating the reliability of what we are doing, and that's able that we do, we can make it transparent.

Koen van Seijen: 28:17

So you're saying this basket has a reliability?

Jeroen Klompe: 28:21

Of 80% and then we sell the 80%. So that gives also question to other carbon in the market, we say...

Koen van Seijen: 28:28

How sure are you?

Jeroen Klompe: 28:29

How sure are you. So we want to build a very open and transparent system, which is based on trust, and by being vulnerable in that we can make it open and that people are checking it. It's also a possibility, it's not anonymous, and customer is connected to a farmer and a farmer needs to deliver. Because the consumer or the company is calculating with the offset of his carbon, he is going to use it in his annual report. So it's about real things happening. It's not paperwork.

Koen van Seijen: 29:03

And does that mean there? Maybe you're not there yet. But in terms of there's trust, there is commitment, has to be friendly, obviously to use for the farmer, as a customer - I'm switching back to the customer - when I'm going to buy these baskets, do I need to put down a long term commitment because I can imagine for the farmer, he or she would like to keep going is that a couple of years that I need like an offtake agreement? Or can I buy ones? Or is that still in the process of figuring out, because obviously you're building this as we speak so there's...

Jeroen Klompe: 29:34

Our vision is that we are not, there is a lot of compensating your carbon emissions and we are not in a company we strongly believe in a regenerative economy. So building soils again, and therefore we are selling the baskets. And by selling a basket of ecosystem services, you are restoring a certain amount of hectares.

Koen van Seijen: 29:54

It always come down to...

Jeroen Klompe: 29:55

... to hectares. The carbon part needs to be stored for at least 10 years. But they are annual deals, but we are building long term relationships.

Koen van Seijen: 30:09

And where are you now in terms of Soil Heros, we're July 2020. As all startups everything changes every two minutes. What is your current status and let's say, then we'll go, what would you like to be at the end of the year?

Jeroen Klompe: 30:25

Yeah, the beautiful thing is that our charcoal drawing, which is made a couple of years ago, based on a large piece of paper is still there, it hasn't changed a lot, the core is 100% still there. At this moment, we have built what we have launched an MVP minimum viable product where we can connect an onboard a farmer, where we can connect to a buyer and onboard the buyer, and do on a minimum set of data, do the calculations.

Koen van Seijen: 30:54

For the basket.

Jeroen Klompe: 30:55

Yeah, and do a transaction.

Koen van Seijen: 30:57

For those three ecosystem services, obviously, not for the 14 or 12, but for the three core ones, okay.

Jeroen Klompe: 31:02

The three core ones. And there's also one thing what we were focusing on a basket, because in the end, we think, if we do this the right way, the carbon problem is there temporary. So if we did it on a large scale, we can solve the carbon problem, by doing it all together. But in the end, it will be about sweet water and it will be about nutrients.

Koen van Seijen: 31:25

And even if the carbon, I mean that's I love the argument because even if the carbon problem tomorrow morning would go away, the issue with a lot of the sector of regenerative agriculture and food is that we would sort of lose the only argument we had. Like has to be carbon, carbon, carbon, carbon, carbon, but actually carbon is a small part of a much bigger story that if tomorrow carbon dissapears as a problem, or dissapears as an overflow, because we're filling up the bathtub, doesn't mean we shouldn't transition away from coal, etc. But even if that would be fixed tomorrow morning, we'd still be in a lot of trouble on the nutrient side, on the sweet water, drinking water, on health care, on a lot, biodiversity, a lot of other things.

Jeroen Klompe: 32:06

Starting with biodiversity, biodiversity gave us nutrients.

Koen van Seijen: 32:09

They gave you, the your biodiversity in your soil give your soils back.

Jeroen Klompe: 32:12

Yes, that's that's all about. And carbon is just a side effect.

Koen van Seijen: 32:16

Because it went up. Because that was interesting, you said I have put a lot of compost, didn't change anything, but life back in the soil and you're storing carbon.

Jeroen Klompe: 32:26

Nature is a holistic system with all the small ingredients and if you put one thing out there is unbalanced, and it's not working very good anymore.

Koen van Seijen: 32:37

So you're now at the MVP, you're able to connect.

Jeroen Klompe: 32:40

We are beyong MVP at the moment.

Koen van Seijen: 32:41

Like the first customer or the first farmer with the first customer. Is that something that by the end of the year, you would love to have a few of those?

Jeroen Klompe: 32:48

We are at this moment, we want to connect two front runners, front runner farmers on the regenerative side who have a clear vision who wants to build soil wants to build vertical supply, want to build business models, who also wants to be an inspiring source for other farmers. So because what we are doing is not visible on a short term base on a long term basis it's extremely visible, because you see the worms, you can see the bacteria, you can see life in soil, you can see all the insects and the birds, etc. that's on the long term. But in the short term, it's not visible. Therefore we need places where you can be inspired and see. So we want to onboard those farmers.

Koen van Seijen: 33:28

In Europe? Geography wise, where are you looking for if people want to?

Jeroen Klompe: 33:32

The ambition can be big with the we must be realistic. And that we are focusing on Europe at the moment because we are able to build the models for those soil types, those climate circumstances and this kind of land use. And it's easy to translate it to Africa or Australia. But it takes time and you need a team to build.

Koen van Seijen: 33:53

So you are looking for a number of front runner farmers and I can imagine a number of front runner companies, buyers, NGOs, non-profit, whatever, whoever wants to buy the baskets.

Jeroen Klompe: 34:04

Yes, who wants to change their business into a business for good, purpose driven companies and not profit for a purpose but profit through purpose.

Koen van Seijen: 34:16

And that means you're looking for food companies or in the food space that also want to change their ingredients, change their farm grades? Or are you looking for the harbor of Rotterdam that wants to regenerate and not compensate? Or both?

Jeroen Klompe: 34:27

Yes. If we want to inspire a bigger community we are focusing on different sectors, it can be fashion, it can be natural cosmetics and home and health care, it can be food, but it can be also companies who have a connection with their natural sources from the earth. So making a tree, furniture, paper, or something like that who have a connection.

John Kempf: 34:55

Launching customers and launching faremrs. That's the phase you're now in which is very exciting.

Jeroen Klompe: 35:00

It's extremely exciting, but then in the end, we can hopefully bring back nature to the balance sheet because we have lost the connection.

Koen van Seijen: 35:09

And was interesting when you mentioned it's not visible or not tangible, obviously very different from all the short supply chain work you've done because it was very tangible because you making the products from the potato, you are still making the soy sauce, etc. Why - because it's not a very sexy subject ecosystem services, marketplaces, I mean just the word already - what convinced or what triggered you? I mean, you saw it for your own farm, you see it for others. Why focus on the market of something so intangible or so not visible? I love to ask the question, to see your way of thinking of to see two ways of thinking of guests, because I'm very interested in the ITN framework. So the importance, tractability solvability and neglect thickness. Meaning is a very important problem to, like what would happen if we'd fix this? Would the world be a lot better or not? Important? Is it solvable? Is it doable? And can we track that sort of? And is it mostly ignored? And I think somehow it is ecosystem services, at least to me, but obviously, you're building your company in that, it ticks all the boxes, like it's huge if we can pay farmers for, if there's a market anything, I would love to hear a bit more on that. It's doable, because we see it all around the world that despite all odds, actually farmers are doing this. And it seems mostly neglected because people talk a lot about carbon, there's some offset, but it's a small market and very opaque. What do you see, let's say tackle the most, do you see that there's a market for these baskets? Because at the end of the day, it's just like your potatoes, you need to have somebody buying these. We can have all the farmers in world, I think finding the farmers is not going to be the trickiest part. What needs the market? It needs the customers to buy these baskets. What has been your experience over the last years there in terms of demand, interest, understanding of complexity, baskets, thinking? It's a very long question.

Jeroen Klompe: 37:03

Yes. The first thing is it solvable. Yes, it's solvable. We can solve a lot of problems and we can solve. We don't have a food problem, we have a nutrient problem and we have a distribution problem. So it's already proven that we can grow very healthy food in the desert. So if the world population is growing so fast, we are still able to feed them, maybe we have to eat a little bit less meat, because a lot of the crops which were growing in the moment is for cattle feed. That problem is done.

Koen van Seijen: 37:34

Doesn't mean it's easy. Turning around the farm, in this current system, anywhere in the world is difficult, but it is possible.

Jeroen Klompe: 37:40

It's possible.

Koen van Seijen: 37:42

Okay, so important. Is it important? We talked about that. It's fundamental even if we take out the carbon part. Is it neglected? Like are a lot of people focusing and working on this?

Jeroen Klompe: 37:53

Not yet. But you see, if you look at the awareness of the last two years, in all the news, at the moment, about biodiversity, for example, about very good research papers that biodiversity must be part of the business models, otherwise we don't have a produce any more in the future.

Koen van Seijen: 38:14

So it's not a nice-to-have, it's absolutely key-to-have. If you don't have biodiversity above and in your soil...

Jeroen Klompe: 38:21

We are all connected, it all start with nature from the earth. And if we, as a collective decide to continue destroying it, that's also a decision. But then we know it's going to end somewhere in the future. And there is a growing group of consumers and companies who feel and see the vision that we have to do something back for all the things we took from the earth to restore and make the whole economic systems more imbalanced. And they see that also as a new way, a new license to produce for the future.

Koen van Seijen: 38:59

Meaning that to answer the question of there is interest, there is potential demand, there is the demand side of these basket of ecosystem services, are not just one carbon, I want water...

Jeroen Klompe: 39:11

It's growing.

Koen van Seijen: 39:12

You see, it's changed over the last year since you've been diving very deep into this obviously.

Jeroen Klompe: 39:17

Yes. It's the front runners where we are focusing on at this moment. But they see that they can bind their community of their buyers by doing good, by doing something back, by implementing it in their whole business model by being carbon or planet neutral or maybe planet positive. And if you see the other movement in the true cost accounting, which we totally have forgotten in the last 20 years. It's still there!

Koen van Seijen: 39:47

We just kept taking, like a bank account.

Jeroen Klompe: 39:49

It's a common problems. And there is a growing group also of activists and shareholders and investors who are going to ask questions. The public media is going to ask questions. And we need to prepare ourselves as companies, as consumers to have the answers for that. And there is a big opportunity in those markets. And if you calculate the value of this market it's huge but we're still in the beginning. So we have to imagine if we are five years further on the road, what's happening then?

Koen van Seijen: 40:16

What would happen then in your vision? Five years down the line, so '25?

Jeroen Klompe: 40:20

It will be normal to talk about bringing back nature on your balance sheet. And it can be an asset so because it has a value, then you can put it on the balance sheet and there's no out of pocket money anymore.

Koen van Seijen: 40:34

It's not a nice-to-have, it's a key-to-have. Especially I mean, I always say, especially in food, but actually in food, fiber, oils, every fashion, almost everything we wear, eat, breathe, comes out of the soil at a very deep or slightly more up. And we completely lost that connection.

Jeroen Klompe: 40:52

And there's also a social imbalance.

Koen van Seijen: 40:55

Countryside, city...

Jeroen Klompe: 40:56

Yes you're solving that problem also.

Koen van Seijen: 40:59

And so you're in that process, if we would talk in a year from now, let's say 12 months later, we'll probably be able to talk about a number of these deals. The first front runner farmers connected to the first front runner companies, brands, etc. And we'll be seeing some of those exciting ones, we'll definitely check on that.

Jeroen Klompe: 41:18

We have more data then and therefor we also have the Soil Heros Foundation, which is run by Melanie, that we can tell what has happened on those farms, we can tell the deals we've made, and hopefully that's a big source of inspiration that this new industry, nature inclusive industry is going to evolve. And now we're talking about big.

Koen van Seijen: 41:43

Yeah, I know big picture. But I think if we're such at the beginning, if we don't dream big, then yeah, we're, we're doomed anyway. So to end with a few questions that I like to ask in general, and I know you have some thoughts a out this. So you're for now l t's say for a few years no l

Jeroen Klompe: 41:59

Now what we see is that transition finance is a nger the co-founder of Soil H roes, they run by themselves, b t you're in charge of a $1 b llion investment fund. And you c me a bit from the world of i vesting, so I'm expecting some i teresting answers, what would y u, how would you put that m ney to work? hot topic at the moment, because you have to help farmers to go through the starting phase, because there is a little bit unawareness, things go wrong, the market is not there fully, etc. etc. you have to build soils a little bit first, before you can deliver the ecosystem serve so there is a startup phase in building soil. So there are if we can run a 1 billion investment fund, I said, there could be...

Koen van Seijen: 42:46

Could be farmland, it could be anything else, if you want to invest it all in soy sauce, that's also possible.

Jeroen Klompe: 42:51

There are there a few big gaps at the moment where we can focus on, it's about spreading the risk also, but it's not one thing it's about, you can invest in the real assets in degraded farmlands, restoring it, make it available for farmers to grow or expand their farms. It's a very good thing to invest in. And it's a big problem also. The other thing is, we can help accelerating the ecosystem service market by investing in soil impact bonds. So it's performance agreements that you are going to deliver those amount of ecosystem service, but you get paid in advance. That's also a way of transition finance for farmers.

Koen van Seijen: 43:33

But that means because they're not there yet.

Jeroen Klompe: 43:35

They're not there yet.

Koen van Seijen: 43:36

You probably would invest in actually setting up the first outcome-based payment scheme.

Jeroen Klompe: 43:40

Yes, that's not so complicated.

Koen van Seijen: 43:44

But still it's not that you can decide tomorrow, okay, I have 200 million, I want to invest them all in these outcome-based products, because they're not there, you have to develop them, but it's an investment.

Jeroen Klompe: 43:52

Yes. If we have an investment fund, so it's about building business models, also, because then the value of your money is going to increase. The other thing is just helping them with transition loans in a very creative way. I have my vision about it, not just a normal loan but it can be very creative one that you have, that your noses are in the same direction, not from a banking perspective.

Koen van Seijen: 44:17

Partnering with farmers, skin in the game.

Jeroen Klompe: 44:19

Yes. And the fourth big thing is we have a food system at the moment but by helping companies who wants to build a different way of making food and therefore they need the products from the land. It's an extremely interesting growing area where it's about nutrients in the end, where it's about taste in the end, and related to what's happening at the moment where we have a food system where we fill the people and not feed to people and that market opportunities huge. And by building those rather small vertical supply chains.

Koen van Seijen: 45:04

Which is interesting because you have quite a bit of experience with that and most of them didn't work out that well, but if you did. So you would definitely invest in more, some of that investment fund would be put into let's say the next generation food companies that are building food as medicine, nutrient density.

Jeroen Klompe: 45:24

Definitely.

Koen van Seijen: 45:24

Because let's say the taste of the soy sauce is asking for more of those. And are there any products or not products, but let's say "Oh, I would love... this is a product category I would focus on." Would it be grains? Would it be potatoes? Would it be livestock? Is there anything that if somebody would be building a company will be, I mean it all has to be rebuilt. But at this moment, we what excites you?

Jeroen Klompe: 45:50

What excites me at the most at this moment is the crops a farmer needs to grow to improve the quality of soil, but which have the lowest profitability?

Koen van Seijen: 46:00

Not the first time this comes on the podcast, that's very interesting. Yeah. So they're basically buying the whole rotation, but not the cash. Like how can you...?

Jeroen Klompe: 46:08

For example, now for me growing wheat, but we are not earning money on it, because we need the wheat to increase the quality of soil. So it's a rest crop.

Koen van Seijen: 46:18

It's an investment, it's a loss, it's only costing money.

Jeroen Klompe: 46:22

If we can make this group more profitable by connecting it to very interesting business models, then we are not dependent anymore on those very big cash crops, which are extremely intensive, negative, intense for the soil. That's... it's all about balancing.

John Kempf: 46:42

Figuring out how to make sure you can sell the full rotation and all the crops that normally would either would go to animal feed, or would just be cut in and plowed into the soil.

Jeroen Klompe: 46:52

Yes. So if we can grow super grain, with the highest nutrient content, and that you can recover very quickly after, because the proteins are so good, after a hospital visit or something. Maybe it's so good that you don't need to go to the hospital anymore. And yet...

Koen van Seijen: 47:10

Okay, so we take your investor hat away, unfortunately, but you have the magic power to change one thing in the agriculture and food system industry overnight. So there's one... if one thing you would change, would it be everybody has a nutrient density meter, would it be everybody's focused on taste, or all farmers are counting rainwater? What would be your magic, you have one shot, you can ask for two, but what is your one shot?

Jeroen Klompe: 47:34

If we have a nutrient passport with all the food we are growing and providing.

Koen van Seijen: 47:40

We meaning the farmer or the consumer, or as society?

Jeroen Klompe: 47:43

As a society, better, because that brings us the awareness and then in the end, we all know that the health care costs are rising enormously fast. And in the end, it will be all about nutrients.

Koen van Seijen: 47:55

When did you realize that?

Jeroen Klompe: 47:58

That's not such a long period ago, it's about really... It's a process, but reading a book, talking to

Koen van Seijen: 48:03

It's a process. people who are busy on this, for example, Dan Barber, who has his vision about the connection between taste and nutrients. It's also about growing some ancient grains and see that they won't become sick. So there has been an evolution of the seed where the seeds are not so strong anymore, that they can protect themselves against fungi and bacteria. And when you look at an ancient grains of six or seven hundred years ago, they are still green on the field! And what excites you about that? Because it the yield is a whole different, but there's a whole different framework...

Jeroen Klompe: 48:43

This means more that nature had the possibility...

Koen van Seijen: 48:46

... to grow a grain that doesn't get sick.

Jeroen Klompe: 48:48

Yes.

Koen van Seijen: 48:49

And we lost it.

Jeroen Klompe: 48:50

Yes.

Koen van Seijen: 48:51

And just to bring it full circle, I mentioned that the intro a fair model, a fair chain model, what you're building with Soil Heros. What is fair about the model? And why that specifically because he very consciously put that in the slogan.

Jeroen Klompe: 49:08

The fairness is that it's open and transparent.

Koen van Seijen: 49:11

Which is something that the agriculture world is not. So you want to de-commodify the ecosystem service market.

Jeroen Klompe: 49:17

Also. You have a peer to peer deal. And we are only we are a service company to that just for a fee. And so the market is going to develop and the farmers get paid for it. And by building a short supply chain in the niche market, you are able to divide your food dollar or euro in your supply chain on an equal basis. So because I strongly believe if you have a system of a farmer, which is very talented in growing foods, then you have the processor and the marketeer, and if you can work together in your own talented to build this supply chain from farmland to consumer, and you decide "oh, we depend on each talent" we can also share entrepreneurship door on a fair way.

Koen van Seijen: 50:06

Instead of the brands taking most of the, or the supermarkets. And if there would be one thing you believe to be true about agriculture, or regenerative agriculture as well that others don't, what would that be? This question is definitely inspired by John Kempf, who usually asks it in a slightly different way. What do you believe - I have an idea - but what do you believe to be true about regenerative agriculture that others don't?

Jeroen Klompe: 50:30

I strongly believe that it is working. It's a system in balance, which is working and which is improving itself.

Koen van Seijen: 50:37

And by answering that you use are saying that most people still don't or don't believe that it's possible and working?

Jeroen Klompe: 50:46

There is a big hesitancy because we are in a world where we have been grown up and educated in a more industrialized cost, price driven way of farming.

Koen van Seijen: 50:57

Even when you bring your neighbors, other farmers to your farm, you show what has changed, what is happening, because you can show it very nicely as you have some fields that have been in this transition for eight years, some recently joined the family and are much shorter. Is it still difficult? Because to see, because you can touch you can feel you can taste...

Jeroen Klompe: 51:18

If you have two mountains and there was a big valley in between, you have to have the guts to step from this side to the other side. And there's a lot of social influence around it, influence of the whole industry around us.

Koen van Seijen: 51:36

And you're saying that paying for ecosystem services, however unsexy that might sound, could help more farmers to take the jump.

Jeroen Klompe: 51:45

Absolutely. Because in the end, if you are getting empowered, bottom up with extra money, extra business models, most extra income, every farmer wants to have an extra income. And they are all working with the biggest biggest assets, that's soil. And you don't want to spoil that, you don't want to destroy that. But you are forced to do that because you're in the cost-price driven system. Every farmer wants to step out.

Koen van Seijen: 52:13

But is blocked so far most of them.

Jeroen Klompe: 52:15

Yes. And it can be by by banks, it can be by your long term contracts, it can be by...

Koen van Seijen: 52:21

Agronomists, your neighbors.

Jeroen Klompe: 52:23

Yes.

Koen van Seijen: 52:24

With that I don't think we could have wished for a better end of the interview. Thank you so much Jeroen. I don't think it's the last time we'll be talking about this. I'm looking forward. And I wish you all good luck of closing the first or enabling the first contracts to flow through the system and the first money to flow to the farmers and first baskets.

Jeroen Klompe: 52:45

We have signed the first contracts this week so we are very happy and looking forward in a positive way to the six months, next six months.

Koen van Seijen: 52:54

Thanks a lot.

Jeroen Klompe: 52:54

Thanks a lot.

Koen van Seijen: 52:56

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