Ask Me Anything Webinar Recording - October 13th

The forth Ask Me Anything webinar was an opportunity for the Investing in Regenerative Agriculture and Food community to come together and ask Koen van Seijen and everyone else on the call their burning questions regarding building a regenerative food system and the video course we launched in last months (https://investinginregenerativeagriculture.com/video-course/).

Find the topics discussed and the links on:
https://investinginregenerativeagriculture.com/ama-webinar-10-13-2020.

----------------------------------------------------------

Welcome to Investing in Regenerative Agriculture and Food.
Join our Gumroad community, discover the tiers and benefits here: www.gumroad.com/investinginregenag.
Other ways to support our work:
- Share the podcast
- Give a 5-star rating
- Or buy us a coffee… or a meal!
www.Ko-fi.com/regenerativeagriculture.

-----------------------------------------------------------

For feedback, ideas, suggestions please contact us through Twitter @KoenvanSeijen, or get in touch through the website www.investinginregenerativeagriculture.com.

Join our newsletter on www.eepurl.com/cxU33P. 

The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Support the show (https://www.gumroad.com/investinginregenag)

Find out more about our Generation-Re investment syndicate:
https://gen-re.land/

Thank you to our Field Builders Circle for supporting us. Learn more here

Transcript

SPEAKER_09 0:01

and we're live. So welcome to, I think, the third or the fourth Ask Me Anything webinar. Definitely the first one of this quarter. We're in October, which I cannot imagine. This year just disappeared. But a very interesting time, obviously, for regenerative agriculture and food. So I'm so happy to have you all here. And I'm very curious about questions. I hope, as we had last time as well, that the rest of the audience will help to answer them because, obviously, I have a great to interview many people doesn't mean I know a lot or everything. People often assume that basically, where can I find funding for that? Or how do I do that? And often I just point to the interviews we did because the experts are definitely in this case on the ground. So to start with a short presentation on, and I will share my screen, just a bit of background of where we are, what we're doing and how. So I will open that. And that also means that I cannot, allow people in anymore. So that's going to be interesting for a few minutes. So there might be some angry people. Anyway, welcome to the Ask Me Anything webinar of today, the 13th of October. I'm the host of the podcast Investing in Regenerative Agriculture and Food, where I have the great pleasure to interview anybody from farmers on the ground to fund managers to large asset managers, scientists, nutrient density researchers, and everything in the middle. If you are not listening, you can definitely find them in your podcast app. basically searching for investing in regenerative agriculture. We chose a very inspirational name, but very lucky looking back because it's very easy to find. They were one of the few, if you type that. If you type that, we have done over 100 interviews now in the last four years. I think it's October, actually. Yeah, so it's exactly four years ago that I started recording these conversations and an incredible amount of fun and, of course, luck to interview so many interesting people. Always asking that question, how to put money to work, how to get it back, and how to regenerate soils with that money at scale regenerating people local communities and ecosystems and I think we have been on a nice run especially this year and also last year since it's been growing the interest and the wave just keeps growing if you haven't been listening definitely find us here or on YouTube we have quite a few interviews on YouTube but of course your favorite podcast app you should be able to find this the reason we're here or the reason why we decided to do another Ask Me Any is definitely around the course. No worries if you haven't looked at it, but we've launched a video course on investing in regenerative agriculture and food. Basically, you can find it on Gumroad. This is the short link, which is not so easy to remember, but I will also put it in the show notes where we try to share our lessons learned, what have we learned after interviewing more than 100 people and does more than 100 hours of audio of how to put money to work in this sector and basically sharing some of the frameworks we've been using on selecting things, et cetera. Definitely check it out if you're interested. It's pay what you think it's worth. And it's completely found on YouTube and via Gumroad. What is regenerative agriculture? A lot of people ask that constantly. I wouldn't say constantly, but definitely ask that. And it's a very tricky one because there's not a very good definition, meaning that this definition I took somewhere from the website. Obviously, if you put it in and you find it, but it's, as my friend, even Soloviev would say, it's more a continuum than, well, there the presentation goes. It's more a continuum than it is a destination. If you talk to a farmer, I don't think he or she will ever say, I'm a regenerative farmer because I'm done with this journey. No, they are applying regenerative practices. And I think that distinguishing is extremely important. And you can apply a lot more practices or a lot less, but it doesn't mean that there is a rule. It's not a binary system. You are a regenerative farmer or you're not. What is important to see is the difference between extractive, which is most of the farming we're currently doing sustainable which is some of the farming we're doing and regenerative which is a very small subset of sustainable but it's definitely focused on regenerating soils regenerating sea actually you see some some examples in oceans as well and it's going beyond sustainable how do we repair what um what has gone what we have destroyed over the past millennia in many cases 12 000 years so it's a nice arrow that i definitely took from ethan um and there's a lot underneath there he wrote a great um article on it which i will share in the show notes as well, and basically focus on these different practices of regenerative agriculture. There are many, but they all come down to covering the soil, using complex rotations in place and time, no or very limited tilling. There's a lot of discussion on that. And soil disturbing and the integration of animals. And obviously there's a lot of discussion on that as well. But you see that many of these practices, they come from permaculture, they come from other places, and they boil down to three, four, five practices or three, four, I wouldn't say rules, but definitely if you talk to a farmer applying regenerative practices in Costa Rica or in the Netherlands, they will come down to these things. This is a very, very busy slide. Don't try to read it, but definitely have a look at the article. Even he wrote in 2011, so almost 10 years ago where he basically, this is a very nice map you can use. You can send to somebody to a farmer and ask, where do you stand on these different things? For instance, fuel, for instance, the source of inputs, for instance, your economic sustainability, for instance, your tillage. And it would, vary quite a bit. And also the second question, where would you like to go? So I would like to use this actually, we're going to use this more in the podcast as well. So if you want to learn more, look at the article, read some books. David Montgomery has a great book, Kiss the Ground has a Netflix movie out now. You probably have seen it or at least some discussion around it. The book is great as well. Dirt to Soil is a very interesting one. Richard Perkins on YouTube is a great small scale farmer. And there's actually a lot more. Judith Swartz just has a new book out, which I still have to read. But But have a look there and basically dive deeper. And obviously, if you want to follow the podcast, feel free as well. And with that, I'm going to stop sharing my screen, see how many people we have in the waiting room. So with that, just a short introduction into the world of regenerative agriculture and food, which is exploding. You see a lot of large companies coming into the space, which is always interesting. Very scary for many, I think, in this space as well, and very necessary from another side. I'm just going to bring in the two questions, and we actually have the two people, I think, even in the room if they want to ask them. So first going to bring up Joe Swart. If you're able to talk, you want to ask your question live or shall I put it in there? I will put it in the chat anyway. I will definitely share the slides. Yeah, I will share the slides afterwards. They're always the same, actually, and it doesn't change too much in the different asking anything ones. But anyway, Joe, I'll put your question in the chat. And if you want to unmute, you can ask it live.

SPEAKER_02 7:10

Great. So we are setting up a a regenerative agri-hub now in Kenya, bringing together, we're starting it off with three leading farmers, but we have about 30 farmers waiting in the wings and it's the first agri-hub of a whole chain. There's one plant from Mozambique and so on and so forth. So it's all about agglomerating product and also to shift the whole process of production towards regenerative stuff. What advice could you give or kind of insight could you give, Quinn, on just the investment strategy? What have you learned and what are the kind of common pitfalls? Thank you.

SPEAKER_09 7:59

Thank you for the question. It's a very broad one. And the city answer, it depends. In this case, it sounds like it's not a land-based investment. In this case, more a food company or processing-based. They're definitely... investors out there that have been financing this, for instance, in the coffee space and the chocolate space or the bean space to bring or to leave some of this added value in the country of origin where this is processed. I know that some other investors are starting to look at it. It's not an easy one, but I would definitely look I wouldn't say the investors that are purely focused on region practices because they're not so many that are comfortable with processing or even comfortable with investing in Kenya. I would look more at the impact investing space in Kenya and definitely add, obviously, the regenerative practices to the deck and to the pitch, but mostly pitch it as an interesting processing investment, an interesting added value investment that more of the money stays locally. I know, for instance, a very well-known impact investor, Goodwill, that Vincent for sure knows, is up to their third fund now, mostly technology, has done a lot of MFIs like microfinance and a lot of fintech, and have recently made their first agriculture investment. In Nigeria, actually a tomato processing plant because Nigeria is one of the biggest tomato producers in Africa and also one of the biggest importers of tomato products. So they invested in a company that's making tomato products in Nigeria and does replacing import. So you start seeing that some of these investors start to look at agriculture and food, but I also know from inside there that it was a very long process to get these FinTech investors and to get the company comfortable with each other and actually make that investment. I think it took way longer than they normally would take, but they're very happy about their first food and agriculture investment. So I would look more at the impact investment space, the funds that are active in East Africa that are maybe comfortable already with some agriculture and are interested in that. And the region part I think is in this case, a nice add-on, but I think you would find a very hard time finding an investor that is comfortable with processing, comfortable with, in this case, Nairobi and comfortable with the region part or that's specifically looking for that because I wouldn't know anybody immediately. Although many of these impact funds I know are starting to be more conscious about soil, but it's a journey and many are not there yet, I would say.

UNKNOWN 10:29

Okay.

SPEAKER_09 10:29

Sorry, not a very easy answer.

SPEAKER_02 10:32

Thank you very much. You're quite right.

SPEAKER_09 10:34

And then we have another question from Marlise, which is a very, very deep question, which you can spend quite a bit of time on, but I will put it in the chat if I get it right. but you can also ask it or basically I think it's about land ownership but if you want to elaborate a bit on it Marlise then please go

SPEAKER_01 10:59

I will elaborate I'm not sure if people are familiar with the 1-2-3 business model you've had lots of interviews with them on the podcast and last time with the Ask Me Anything I saw people from 1-2-3 it's an organization and they do a wonderful stuff where they go and buy a degraded plantation. It's one of their business models, but I'm going to focus on this specific example where they have funds of an investor and they buy degraded land in South America of a plantation and regenerate it to life. And then the plantation is seen as the nucleus. So it's a healthy plant. they employ local people and then the surrounding economy also benefits obviously because they need nurseries and seedlings and there's jobs. So my question is twofold. When I looked at the business model, I thought it was very interesting and that it was a for-profit plantation. And then I thought two things. Well, it's money from outside. They go in, they buy a piece of land. Yes, they provide employment, but then they have a profitable company and they sell it to, well, not the local community because they can't buy it, but to another big one percenter. So my question was, how do they see the local community actually benefit from it? And then this is not my question, but it's the follow up is I'm working with a pilot program of smallholder farmers to convert them in South America, to convert them to agroforestry. So I don't want to ask them, obviously, to sell their land. But I was thinking, if we have this pilot of like 100 farmers and I don't know how many hectares, say 2,000 hectares, would it then be a good thing or a bad thing to have a one-two-three plantation in the region? Would it be competing with the smallholder farmers because they lack the scale or would it actually be beneficial because of the big plantation in the neighborhood it will draw, I don't know, oh, you will have a bigger market or, yeah, I'm trying to figure out if it makes sense to have a big plantation there for the surrounding community and how do they see it in the long run that the plantation itself actually benefits the local community?

SPEAKER_09 13:39

Yeah. It's a very, very good question. I think it touches upon a big elephant in the room in many of the, I wouldn't say the earlier models, maybe I mentioned that in a but the models of buying land, regenerating it and selling it because you improve the quality. In this case, it's a shame that Lenny isn't one of the employees of 123 who signed up, but he's not on the call, but I can definitely ask what they think of that. But the ownership structure is absolutely crucial. Like who owns the land? Why can somebody from outside come in, buy, regenerate and sell, and obviously profit from that. And in this case, their big German pension funds. And I think the answer lies in what happens at the sale and how, what happens there and in what kind of, in this case is in the land buying funds and structures, what happens after. In some cases they're setting up, they have 10 years and that's the traditional way of doing many of these things. But many others are starting to look at evergreen structures. So they never sell, or they're actually, the profits are based on basically what comes off the land and obviously that could be slightly less and you still benefit from sort of internal metric that your land is increasing in price but you're not selling and we've had a number of discussions on this actually on the podcast twice with Thomas Ripple who is in Germany very active of basically buying land and getting it off the market and never selling it again it will be hold by a foundation and basically it's cannot be speculatively used anymore in the very busy with that and buying farms and farmland and getting it off the market. In the US, it's a huge problem because of transition of generations. A lot of farmers are old, like actually in Europe as well. And if they sell to a speculator, then obviously the pressure on the next generation that comes on the farm is enormous because they have to pay back this enormous fee that they have to borrow somewhere from a bank, et cetera. So it's an enormous question on land ownership. What do we find fair or not? The first wave of these structures are buying and selling it at some point, farmland LP. I mean, there are a number of these. And I think they're essential for the sector because we get to a certain scale that we can start doing agroforestry at thousands and thousands of hectares. But I don't think it's the optimal model. I'm very interested in this case in transition finance. Like how do you partner with current landowners and help them through the transition or investing in their transition? But even there, there's a big question on, okay, how do they actually get ownership of that land? Shouldn't it be hold by collective shouldn't be developed by the common good. And there, we as society, we have a very big question to answer. Like, why can somebody own land? And why can somebody else only rent it? And that's something we have to figure out. And it's, I don't know the answer to your second question. Is it good to have a big plantation or not? Run by one, two, three, that hopefully is going to be as regenerative as possible. A lot of these structures function as a sort of hub and spokes, meaning they set up a foundation demonstration site, obviously quite big in many cases, but they work with local farmers as well and try to incorporate their cacao, et cetera, to increase the quality and basically get to a bigger scale. But it's a tension. It's a tension between coming in from outside with a lot of money, because 123 raised a lot of money, and put a lot of money to work, and at the same time buying very, very degraded plantations that have been run down by previous owners and come back to life, which is a good thing, but could it be better or not? that's the question it's not an easy one and land ownership will run through the regenerative space for as long as we haven't figured out what to do there because many of land has been stolen has been taken has been contracts forced I mean if you go into the history of land ownership it's not a pretty one and you're going to find a lot of especially indigenous peoples that have been moved off the land off their lands and they've managed for centuries and for millennia and somebody came in got a contract and took it so it's it's very very very difficult especially if a lot of money comes from outside even if you try to do it the most sustainable regenerative socially acceptable possible you're still probably stepping on toes and probably a discussion needs to be held there

SPEAKER_01 18:03

thank you thank you from what I'm gathering now is I'm just going to look at and cherry pick like okay so they're doing a regenerative farm and they're making a lot of money let's do that with our farmers

SPEAKER_09 18:16

I think that the good thing is they I mean, to regenerate large pieces of land, we need money. And if you are able to raise that from pension funds, first of all, the money didn't go anywhere else, being put to work to plant, hopefully as regenerative system as much as possible, but you don't get away from the ownership structure discussion. At some point it comes up and you have to deal with it. I see some,

SPEAKER_04 18:44

obviously some answers in the chat as well, which is great. Thank you for that. And I will definitely put all of these in the show notes as well.

SPEAKER_09 18:56

Can you put a link to the plantation purchasing organization that you mentioned? I think it's 123 Marta, but I'm not sure. Let me know if that is. Yeah, so thank you, Jeffrey, for putting it in. We interviewed Olivier, who is the COO, and Richard, who is the founder, Richard Falken, relatively recent. And they raised quite a bit of money from German pension funds and have been on an investment spree. So I want to open it up to other questions. We have an open field. So please either put them in the chat and or unmute yourself if you're the first, otherwise it's going to be a bit of a chaos. There we go. Philip, you're the first. I could see you.

SPEAKER_07 19:43

Hi, Koen. Thanks a lot for the show. A very specific question is what's the economic incentive for a farmer to transition transition to regenerative. I listen to all your podcasts on the transition. Very interesting. However, there's a lot of questions. The way I see it is that when a farmer starts a transition to regenerative, probably they're going to have to sacrifice productivity. They're going to have a lower yield in their production. So that's a that would be a negative and a lot of people even in the for the going to get certified organic has that problem because you have three years of calculated three years to become certified and at the same time you're sacrificing yield so anyway the only the only long story short the only way I see that the farmer can get an economic benefit from that is that we somebody we help them be able to sell their produce directly to the consumer.

SPEAKER_09 21:35

Do you have a specific crop in mind in this case of your question or is it a general one?

SPEAKER_07 21:41

Just general, general.

SPEAKER_09 21:44

Yeah, because there's, oh, sorry, go

SPEAKER_07 21:47

ahead. Okay, so that's the only way I see that they can get an economic advantage, which can kind of counter the lower productivity they're gonna have for some years before the regenerative benefits kick in. Yeah, I think it's- Take out the middle man, like- I think that's

SPEAKER_09 22:05

a good thing in general, but I mean, it depends a bit, like if you look at a grain farmer like Benedict, we did the transition finance series with selling directly for him would be very difficult because you don't go with a few tons of grain to a farmer's market. I think in terms of returned or in terms of financial incentives, it really depends where you look. If you look at, for instance, almond crops or certain grain crops, the incentive is absolutely there to apply more regenerative practices. If you look at, for instance, the gap in price between non-organic grains and organic grains in the US, for instance, where there's a huge shortage, it definitely makes sense to transition. It takes a number of years, so you need finance, or it depends on your bank account, but it any need finance to get through those three years. Obviously, it depends how your land is treated. If you have already been very selective with spraying and doing a lot of conventional but very specific agriculture practices, maybe your lag time is less. In many cases, there is a yield gap and the J curve goes down. The question is how far and how deep, and that really depends on the land. So that's very difficult to say. If the land has been severely degraded, it could take five to 10 years. If the land has been in an open case state, it could take a few years. What we now see is that for many farmers, it's a combination of things. It's definitely the input costs which are rising, the yields which are slowly going down in many places or actually faster going down. So it's sort of a necessity if those two lines didn't already meet, they might meet in two or three or five years and it's a necessity to start changing and especially on the input side to reduce those costs. And if you look now at Again, grain, for example, or almonds. Jonathan Lundgren just published a study or is publishing a study and is doing a webinar, I think next week, on almond systems in the US and how much more profitable farmers are that are using regenerative practices. He did the same on grain a few years ago, 2018, which is one of the few studies looking at profitability and saw that they greatly outperformed the non-regenerative practices using farmers and also had way less pests, et cetera. So it really, I think it's a game around inputs, costs, and obviously getting higher prices for, if you can, getting higher prices for your produce. And in this case, I see funds being set up in the US that are specifically looking at grain. Why? Because they're subject. So they buy conventional land. They help that land through the three years of transition to organic. The prices of organic of grain are somewhere between 100 or 200% compared to the conventional one. And they are seeing that with very advanced regenerative practices, they can get to the same yield. They can close the yield gap between conventional and organic, meaning you get more or less the same yield. In drought years, you get much better yield than your non-organic neighbors, and you get a much better price, and your input costs are also lower. Your manual might be more. You might have some other extra costs. But from, let's say, an economic perspective, certain crops are definitely already there in terms of the gap. But it's really, you have to search. You have to find. It could be that certain grain crops are in certain places are not yet there. But if you can get good offtake agreements, which wasn't the conclusion of the transition finance series. Like transition finance is great, but more important is to get good offtake agreements, even long-term offtake agreements, to actually get some security in those years where you're applying more cover crops, where you're really going all in with regenerative practices, because there might be some shocks and the margins are so thin that it's very difficult. So Benedict is working on that. I hope to be able to share some updates soon. And then it's much easier to get transition finance. But you see, for instance, In organic, the Rabobank in the U.S. is experimenting with organic loans to help farmers through those three years. Why? Because they have more costs. They don't have the premium yet, but their soil is in shock. So there's a very interesting investment case to close that gap or to bridge that gap. But it's going to be specific on crops because almonds are very different compared to olives, very different compared to grapes, very different compared to grain, and very different compared to potatoes. I see some answers also, or some people. Thank you, Amin, to answer that. I will probably put the interview with Jonathan Lindgren where we talked about profitability in the show notes. And I have the link of the webinar somewhere where he's presenting the new study they did on almonds to see the profitability difference between regenerative ones. And they basically looked at the neighbors. So they had the same soil type, the same climate, everything the same. accept their practices to see what was the profitability or what is the profitability difference. And it is quite large. At least I've seen the announcement.

SPEAKER_04 27:00

I haven't read the report yet. I hope that helps. I

SPEAKER_09 27:08

see impact bonds, very interesting. This is a bond-like question. Like if you know that in three, four, five years, you'll be, or your yield will be comparable or at least very close to, and you can get access to a much more interesting market. In this case, the organic market in many places is very interesting. That is a finance question. Can you help a large group of farmers through that transition? That's what Pipeline Foods is doing in the US. That's what players start to do because it's such a, I think it's 1% of the US farmland is certified organic. More than 6% of the sales is organic, which means there's a lot of import. And so there's a huge gap there to start supplying more. And in many countries, that's the case. It comes down to a finance question and obviously an operational question as well. Okay, who's next with a

SPEAKER_04 27:55

question? You can type it, you can unmute if you're quick enough. just going

SPEAKER_07 28:07

back to what you were saying about the transition a lot of the farmers there won't transition straight away because they haven't got finances behind them and that's a big thing and a lot of people will stagger that transition over five years

SPEAKER_09 28:23

yeah of

SPEAKER_07 28:24

course it's that shock that's going to affect it

SPEAKER_09 28:28

definitely I think the I wouldn't want to argue that anybody should take finance if you can do it slowly and more secure. Definitely don't shock the system too much because you might be in for a surprise. Many of the first generation, almost farmers using regenerative practices, they've been forced to because they lost their corporate number of times or they reached the end of their bank account and they couldn't buy inputs anymore. I wouldn't suggest that that's the best case. We know the stories. And it's great that they did, but they could have also tipped over and basically lost the farm. So I would definitely, I mean, cautious and context-specific transition is key. And hopefully in the future, many farmers obviously get their finance through local banks. And what we really hope with climate bonds and green bonds is that local banks can raise capital, cheaper capital, if you are applying regenerative practices, like as a farmer, that your interest rate or your payments are different if you are applying regenerative practices. And that would be very, very interesting. They just raised the first green bond and the climate bond initiative, certified green bond for an agriculture company in Brazil, Rizoma, which we interviewed, which was greatly oversubscribed, 25 million, to apply these practices. So it is happening. The market is starting to move, but these are still very small, like very small incidents almost in the space where you see this happening. And many farmers have to do it, unfortunately, by themselves because their local bank doesn't know what they're talking about if they say soil practices.

SPEAKER_07 30:04

Most commercial banks won't even look at

SPEAKER_09 30:08

them. No. Already organic is for many way too difficult. It's unfortunate, but there's going to be a huge role for banks here. I have no doubt.

UNKNOWN 30:20

Okay.

SPEAKER_00 30:21

Can we have something?

SPEAKER_09 30:23

Yeah, we had Robert first who raised his hand because he figured out the system in Zoom to raise your hand, which is great. Then we'll go to you, Finn. Robert, please go ahead. You have to unmute. We cannot hear you.

SPEAKER_04 30:37

We cannot hear you still, Robert. There we are.

SPEAKER_08 30:42

Yeah. Okay. Sorry about that.

SPEAKER_09 30:44

So

SPEAKER_08 30:45

thanks for this. I'm in the process of setting up a feasibility study in Southwest Uganda to build a processing center for coffee, which is a very high grade there, but they have no processing facilities. And then I want to start this as a center of excellence. And I've visited the area. I've looked at the farming and stuff. And I think there's a... the possibility of improving their yields in many ways, not just from the coffee, but actually from growing other crops in between the coffee trees. These are all small farmers, usually around one to two hectares. There's 3,200 of them. They're in a co-op. And this is money, pin money for them to stop them actually going into the rainforest to hunt for food. So this is very important in terms of protecting in the area. But I'm just wondering if anybody here, or you might have some advice as to what type of crops, you know, I'm thinking garlic, I'm thinking herbs and medicinal herbs and spices that could be good cash crops that would grow in between the coffee trees in this highland area that's rich in volcanic soil. So that's a bit of a mouthful. And also- Very specific, yeah. Anybody who knows any funding structures, I mean, applied to the- Irish government's AADP, which is for a grant, which is pending at the moment. Maybe there's other countries that we can link with in this type of thing, other EU countries that have similar foreign affairs grants. Happy to talk about that and link with people and do great projects with other people in other countries like I hear somebody from Kenya on this call. It would be nice to connect afterwards.

SPEAKER_09 32:39

Yeah, absolutely.

SPEAKER_08 32:39

I think...

SPEAKER_09 32:42

To unpack the two questions, to start with the second one, I would definitely look to make it easier, financeable. We come back to something we've discussed before, is to get good offtake agreements, meaning get the bean-to-bar or the coffee place, the bean-to-cup movement. And there are actually buyers now that start to ask for higher quality and higher quantity as well, but get a better price for it. And that actually also answers the question somebody asked in the chat. What's a good approach? an argument to persuade farmers is to pay for quality. And that could mean very different things in very different regions or crops. In this case, coffee, there is a market, not as easily accessible as we want to sometimes, but there's definitely a market for higher quality. And so that would make everything a lot easier, obviously, if there are interesting offtake agreements there or at least interest, et cetera. In terms of companion crops or cash crops, I would ask to the experts like Pretaterra or ReNature, the ones that are building this syntropic agroforestry systems around the world, like what makes sense where and why. And in this case, it's a super context specific question that I really don't know if garlic makes sense or not. So I wouldn't go there, but there are people out there that are building these systems and very complex, but also focused on cash crops and companion crops and crops that make sense together, both because of the soil, but also because of the local context of what is sellable and what obviously more resilient in the system. So I would look for the right consultants there that can help with those systems. And then we go to

SPEAKER_08 34:22

Feni. If

SPEAKER_09 34:26

anybody else, please put in the chat if you have any suggestions for Robert.

SPEAKER_00 34:32

Yes, thanks. So I'm at the beginning of my journey to build a solution for transitioning farmers to region X. And I'm wondering, I mean, a lot is happening, of course, already. So in my exploration, I'm wondering if you have an idea, you guys, what kind of solutions do we need or need more of to transition and farmers really at scale.

SPEAKER_09 35:24

We can spend a few hours on that, Fanny. Thinking about it, what we focus on in the podcast, I think that's the best answer I can give at least, is our two main or three main things. One is definitely nutrient density. So it comes back to the quality discussion. Can we show that connection between healthy soil, healthy produce, healthy gut system and healthy people and thus healthy ecosystems? And that would probably get away of a whole superfood discussion. But there is a discussion that we can have on food as medicine and I think there's a lot to discover there. A lot of very ugly things like we did with Zach Bush, but a lot of very interesting things if we start looking at food as much more than just fuel. And there are some very interesting research pieces and very practical research pieces actually of farmers coming out that this carrot is not the same as that carrot. The organic carrots you find in the supermarket or one actually grown in very healthy soil are not the same thing. They might look the same. They might have the same color. But if you look under the hood, if you look what they actually have, And I think that could unlock a huge amount of consumer demand. Like if we start to actually treat food as medicine, we're not there yet. We still need a lot of moving parts. But as one of the big funders in this space said to me not so long ago that we're literally in terms of diet, in terms of understanding what food does to us and what the connection is to soil and us, we're in the stone age. Like we have very, very, very little understanding. You just have to open a diet book to see like how far we are from truly understanding understanding that system and truly understanding our gut system, honestly. So that's definitely a huge piece, like that could unlock so much. Maybe not in the coffee space, maybe not in some certain specific places, but I think if we start seeing what's actually healthy for us and what's not, that could help. Second piece is landscape size. Like how do we get this discussion from a farm to farm level to a full ecosystem, a watershed? How do we scale it in terms of hectares and acres a lot more? And what kind of technology technology do we need for that to figure out what to plant where and why it's something i hope to do a series on next year i just keep saying it so hopefully happens um to really dive deep into that question common land is releasing a big piece with kpmg i think in a week or two uh no in a week actually and on the returns on a landscape size restoration project in spain so there's a lot happening there and but still there's not enough discussion not enough doing like we need to get this to an island scale to a river system scale to a watershed to an ecosystem because farm by farm we're just simply not getting the network effects we need and then payments ecosystems payments for farmers like how do we pay farmers not just for the food but for the services which is very difficult not easy a lot of moving parts but a lot happening as well especially now around carbon and then the fourth theme we at least focus on is transition finance to finance the above three and that's what we try really really try to keep it too but it's not easy because there's so much happening in this space so I hope that that's of answers we we go deep in deeper into that also in the in the course of

SPEAKER_00 38:32

this yeah great thanks

SPEAKER_09 38:35

and we try to answer the question by what's what's fast like what in the next 15 years can really tip the scale and and why now uh because many other things obviously need to happen around land ownership etc that we we've discussed as well but there are much slower processes so we we decide to include it sometimes but not fully focus on that i see a lot of questions in the chat which i will get to and i see your room as well waving so we go to your and then I'll go to the chat.

SPEAKER_03 39:00

Good. Thank you, Sarah, for the discussion and answers. As you know, I'm very much interested in how we're able to create the measurement or what tools there are today for measurement verification that create transparency. We speak about so many stakeholders now, you know, the finance and consumers and brands and so on. So what measures there is today and how can we create transparency, which I think will eventually will which will actually help to scale, connected to the previous question, we're able to do it in a good way. Obviously, consumer aiming for more of the products and so on, but there is an issue of transparency and there is an issue of also credibility to the certification scheme and all of that that we see on the ground. So interested very much in this area.

SPEAKER_09 39:50

Yeah, me too. I'm scheduled to do an update interview tomorrow. I'm scheduled. I scheduled it. So let's hope it happens tomorrow with Greg Schumacher of Teak Origin who is definitely on the transparency side quite let's say forward thinking and advanced and they do a lot of this research in supermarkets like what's actually in your food in your grapes in your tomatoes etc etc so I'm very much looking forward to checking with him on that like what has happened since the last time we talked which has been a year I think a year plus and he's been by far the most listened episode we ever made I'm also scheduled to do one with Ben Kittredge the founder of the Bionutrient Food Association who really looks at that soil connection as well and has made a device, which I don't have here, but I bought it, to basically measure the nutrient density of food. The big thing missing there is the context. Like I can measure a tomato, which is great. I can do an apple. But if I don't know, I mean, I get a number of numbers, but if I don't know the context, what these numbers actually mean and how an apple could be or should be or this type of apple, then we sort of get lost in the numbers. So we are really at that stage stone age phase but I hope in the next months to do at least to get from some of the people working at the absolute cutting edge of this field to get an update where we are what's missing and how many years are we from measuring this stuff in the supermarket or actually getting a label and seeing because if you look at a label and it says tomato it could mean anything it could be organic which obviously has to be certified there but it doesn't say anything about energy and density and we're really really early there, but that transparency is going to be revolutionary. Like it would, I wouldn't say change the food sector overnight, but it would be a huge shift if we start discussing quality per hectare or quantity of nutrients and start looking at what do you need versus what do I need? Because we have a different gut system and personalized medicine, which a lot of people talk about, but they never talk about the food side of things is going to be very interesting and local become very interesting because maybe your gut flora mimics the flora of the soil nearby. and thus you're much more able to absorb certain things or not, and seasonal, et cetera, et cetera, et cetera. So it's one of the topics I need to dive deeper into, and the short answer is we're not there yet, but we're coming.

SPEAKER_03 42:10

And if I may say, you're looking on the early gray, which is then consumer, but maybe the drivers initially would be the government subsidiary VPN or financial programs of the banks. We spoke about the quality of the land that is improving and so on. Maybe there would be, because consumer, next time? I think

SPEAKER_09 42:30

food companies. My guess is that they're going to be food as medicine companies, very hip maybe at the beginning, very super food focused, but actually with qualitative data underneath that are going to dive into that and show maybe baby food brand. I interviewed one recently that are only using biodynamic products for partly that reason. They might not be able to show it yet and measure it yet, but they have made that choice and they see different nutrients and they see different things and They promote it as that. And maybe new parents are the first to jump on this or maybe athletes or maybe people at risk. I mean, we're obviously talking about healthcare a lot these days. So I would look there at some niches and maybe people that are in the hospital and with certain, I mean, they did some research in the Netherlands, actually, I think in the North, where they saw that people, they don't know why, but getting local food in the hospitals was shorting their hospital days, which is very interesting from an insurance perspective. Like those things, look for those smaller examples and smaller studies. And that might be the beginning of this piece. I see that Jeffrey has a question. Go ahead, Jeffrey. Thank you. Yeah,

SPEAKER_06 43:39

I just wanted to follow up on the point of the food companies and the role of food companies, because I think that a lot of the discussion is how do we grow the food, so on really the agricultural side of it. But I think it's really important to remember that the structure of the farms, particularly monocultures, are there because the buyer wants large quantities. So I'm wondering, you know, from a small farmer perspective, and I think, Malie, if I'm pronouncing your name correctly, that you were asking about smallholder farmers and how they can participate in this. I think one of the big questions is who's buying the hundred different varieties of food and spices and herbs that are being produced off of a regenerative farm. And it's not just one product. It's not just one commodity. And so I think this marketing aspect I'm just wondering if there's a... if the conversation has gotten to how to incorporate more food companies. I mean, you mentioned the superfoods and things like that. It's definitely necessary. I'm just wondering if there are food companies that are actively participating in this so far.

SPEAKER_09 44:55

It's a great question. It's sort of the bundling, unbundling and the bundling. I think it's a question that we've actually had. I don't remember if Lenny talked about it. One, two, three. On this... on one of the Ask Me Anything webinars. It's something they struggle with because you can only make your agroforestry system so complex that at some point you have too many species and thus you have only a few kilos of everything and thus you cannot sell it. So there's a tension there with complexity of what you would like to do and what you can actually sell in right enough quantities to make sense for your market. And there I think you're going to see a bundling of farmers getting together, starting some processing together and you get sort of this unbundling and bundling that you constantly see in every sector happening and I think we need to be careful there and keep asking those questions like how complex do you want to have it and what can you actually sell and what are cash crops and what not and I know these discussions are happening in agroforestry I know that Earthworm Foundation in Indonesia actually set up a processing company to process everything that comes out of some of their pilot forests which we're obviously scheduled to do a podcast about which is not happening yet but they see that as local processing comes into that decentralized but you have a certain, you need a certain scale, um, to, to process the garlic or to process if you want to process that. And that's, that's a tension that many of these, what you see many of these advanced farmers that are using regenerative practices, they start, start at some point in the processing company for them, their friends, their neighbors, because they have this, some kind of heirloom weed that fits perfectly in their rotation, but nobody wants to buy it. And so they actually figure out how to process it themselves. And they're actually very interesting, um, mini processing units coming on the market that are like the mini grinders. And there are interesting things happening there, but there is a tension between scale and economies of scale obviously exist. And so it's not an easy one. And we'd love to have 25 species in our agroforestry system, but if you can only sell two of them, you're probably gonna end up focusing a bit more on that. So it's a tension there as we scale this from a few hectares to thousands of hectares. And I know it's a tension. the large hyperversity players like 123 are working on like what can we do more than just the cacao in terms of quality what's very interesting is you have a lot of these very high-end ones like in terms of cacao bean to bar like super specific almost like wine like we really focus on a certain year etc but what's interesting is that the big players that are buying a lot of cacao are starting to look not for that type of quality but just below that like they want higher end cacao and they're willing to pay for that as well so in some crop you can see that the market is starting to shift or a reasonable amount of the market is starting to shift towards quality. And that makes the system possible. That makes it possible to focus on quality. And so focus on those crops where there is a premium on quality and it could be certain protein levels. It could be a lot of farmers are incorporating certain species into their rotation in North America. Why? Because there is the artisanal beer movement that is looking for certain things in their beers and is willing to pay for that. And it might be one piece of your rotation, but it might makes the whole thing worth it. So it's a puzzle and you would love to do it more complex than probably you can find buyers for at the moment. And that's what everybody's going through. And with that, I would like to use a few more minutes to actually answer some questions or try to answer some questions in the chat. We go back a bit. I saw Deirdre asking, is there a European bank that might grandfather finance to all European countries for these transitions? We had actually Triodos Bank on the podcast that admitted immediately that they're quite comfortable with organic, but not at all comfortable with regenerative transitions yet, but they're super interested to follow and actually have a regenerative money center now that has a website as well, which they didn't have when we interviewed them. So there are banks looking at it. I know some German banks are looking at it, but it's still, they need 20, 30 years of data in some cases. So they need to be comfortable with these transitions and need to say, okay, you're going to take your grain farm from this, from A to B, and I know the premium, and I know you have an offtake agreement lined up, and so I can finance it because the newest things here in terms of transition finance are not going to come from banks. They're going to come from funds, private individuals, crowdfunding, crowdinvesting platforms, super interesting. A lot is happening there they're going to come from all of us trying to finance these transitions. And then when we have the data, the big money hopefully will come. But we should definitely plan for that to make sure that we can basically tap into the larger money sources, which are green bonds, which are banks, which are insurance companies, etc. Regenerative ag bond investment opportunities. Peter, great question. I know one, which was five times oversubscribed. So the short answer, at least from my side, but please correct me if I'm wrong, there isn't too much there yet. There's a lot of sustainable or renewable energy, obviously, happening on the bond market. And the fact that Rhizoma managed to do the first one now, I think is a great moment. And I hope there will be many more that really put this type of money to work. So far, there was one which was fully filled with Brazilian investors. And I know some investors tried to get in from outside and it wasn't possible.

SPEAKER_04 50:15

Another question, global impact investment space interact. That's a very interesting question.

SPEAKER_09 50:24

what is the role going to be of the EU versus the state versus the regions? Don't forget the regions in Europe, very important. I think it's going to be, that's where the pain is felt. I mean, there were massive floods in Northern Italy, massive droughts in the Netherlands. I think this is going to be in many cases tied to regional approaches and maybe connected to some European money or some state money, but don't expect regeneration to be on any of the, let's say, to-do lists of that. There's obviously a lot of interesting, work happening in brussels with the farm to fork etc but it could also be easily hijacked by some other forces and so i think it's going to be in many cases regional um that feel the pain of the floods of droughts etc that are going to act on this and and get involved and hopefully move things i see an answer from joe thank you very much and for fanny which is great We need help to the public to understand the benefits. That's going to be an enormous task to all of us because we've been trained to think that all food is the same, if it's called the same. And we've been, I mean, somebody said on the podcast once, organic taught us a great job of looking at the label. Now we need to look beyond. That's a massive, we need a lot of smart marketing and communication folks to do that. Islanders can be done through small local gardens, thank you. What's this nutrient density do? It's the Bionutrient Food Association and it's called the Bionutrient Food Meter, but I will definitely put it in the show notes as I will copy this, Jeffrey, I will copy this question. What are some of the best examples, that's already a plural, of successful watershed scale regenerative projects? Yeah, not too many is the short answer, Charles. So I would definitely look at Commonland who's doing a number of these or a number of their spinoffs actually. There is WWF, the Sustainable Landscape Finance Lab where I interviewed Paul Chatterton, came out with an interesting research recently. So there's some work around this. I mean, we've interviewed a few people. I will put them in the show notes, but there are very, very few people looking at landscape size, unfortunately. I think this has grown be one of the big discussions we need to have. How do we get permaculture to a landscape scale? How do we get regenerate practices to thousands and thousands of vectors and how to figure out what to do where and why? So there are not too many examples, at least not that I know that are extremely successful. Kuhn, you did a great interview. Thank you very much, Vincent. With the perennial fund, do you think that could work in Europe as well? Absolutely, yes. And I hope many people will start perennial funds, plural, because I think we needed that kind of skin in the game transition finance for a lot of crops and a lot of regions. Again, there, I think we're going to see a lot of, let's say, experts that are really good at helping transition farmers starting to also offer finance for those farmers. Because in many cases, the business model for the consultants at the moment in the space, is selling their time to farmers that are living on very small margins. So that's not a very easy business. But if you can also offer the finance and maybe the offtake agreements, which is something a perennial fund together with Pipeline Foods does, then you have a very interesting package. And again, coming back to how do we help farmers in that transition, a very interesting package, both finance, access to knowledge, which a lot of these consultants have, and access to markets. And then you have a winning combination. One of the three is not enough. I think all three are key. And I hope to see many, many, many perennial funds They're closing their round in the US, which is very small, unfortunately, but they're closing, which is great. And I hope to have them back soon to share some updates, but they should be hitting the ground running soon. And hopefully we're going to learn a lot from that. But this kind of skin in the game, really partnering with the farmer, when the farmer is making money, you're making money. When the farmer is not, you're not. And helping him or her through that transition, I think is going to be crucial, especially in this phase

SPEAKER_04 54:28

where there's no easy access to other types of finance. Ah, great, Jeroen. I would absolutely love more info on that. I think they spawn off the company, if I remember correctly, but I don't remember the details. I answered that one. Alan.

SPEAKER_09 54:55

Definitely many farmers are opening up for tours, et cetera, other income streams. I mean, tourism is a bit tricky, but for instance, office spaces, I mean, there are many, many options to obviously use the land in different ways and basically stack business models on top of each other. What's the best way to connect to farmers? Go and have coffee and learn and listen. Mike, that would be my advice in any circumstances, go and listen because there's so much to learn there. Should regenerative be marketed? That's an endless discussion. I don't want to open Glenn, but there's definitely a lot of work being done on regenerative organic at the moment by Patagonia, Dr. Bronner's and their partners in Rodale. I don't know yet. I haven't figured out my opinion on should we label this in the label fatigue we have. I think in some products, it makes sense. And in some cases, it gives the confidence to the market. In many others, it might not and may distract. They're doing very interesting work. And I hope to have Elisabeth, who's running it, on the podcast soon. But I also know a lot of people are very scared of other labels and other yes and no questions, like you are or you're not regenerative. And it's a journey and not a destination. And

SPEAKER_04 56:10

those kind of things are tricky. I think I'm gonna wrap it up because we're already two minutes over and I wanna make sure,

SPEAKER_09 56:22

can you address the interface between certification, labeling, branding? That's one for another time. I will try to add something there, Amin, but I think we're not going to make it now. So unless there are any burning last questions, I would love to wrap it up. And thank you so much for your time. And for anybody that's still here after more than an hour, I will put as much as I can in the show notes, which probably should be out by tomorrow, the day after tomorrow. And obviously also the recording, which feel free to share and share it wide. And if If you have any questions, you can go to the website where we put all the podcasts. And obviously, you can find out the course we did on YouTube and also via Gumroad. If you want to know more, find us on Twitter, Instagram, or reach me. I think you all have my email address. Thank you so much. Have a great evening, day, wherever you are. And see you soon.

SPEAKER_02 57:23

Thanks, Colin.

UNKNOWN 57:25

Bye.

SPEAKER_07 57:27

Thank you, Kun. Very good.