Investing in Regenerative Agriculture and Food
Investing in Regenerative Agriculture and Food
312 Maarten van Dam – How to fund the transition of the first pioneers in regenerative agriculture
A conversation with Maarten van Dam, founder of Schevichoven Regenerative farm, about numbers when transitioning from conventional to regenerative agriculture and keeping records on inputs, prices, and machinery. Maarten is keeping a lot of records of their pioneering farm transitioning from a mono dairy farm to a diverse agroforestry system.
Remember the Dutch farming protests? What do we miss when we talk about the transition from conventional to regenerative? We miss numbers numbers numbers. Many of the pioneers- rightfully so- didn’t keep good records, on inputs, prices, machinery and, of course, hours. Nobody tracks hours in agriculture. What does it cost per hectare, and what off-take do you need? With a minimum of 50K euro per hectare in the Netherlands, you can transition in about 7 years to a diverse perennial agroforestry system, only counting wholesale prices, counting all your hours, and paying a fair wage. Of course, at Schevichoven they are only in year 4, so all of that has to be proven. But what does it mean for the rest of the 50.000 farmers in the Netherlands? What are the types of regen systems they can apply? We need about 150 billion to transition them. It sounds like a lot, but is doable.
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Remember the Dutch farmers protests? What do we miss? When we talk about the transition of conventional even though I really don't like the term, maybe we should use high input to high knowledge or monoland to land full of life. Anyway, we miss numbers, numbers and numbers. Many of the pioneers rightfully so, because they were and are super busy didn't keep good records on inputs, prices, machinery, investments and, of course, hours. Nobody tracks hours and time in ag. Our guest of today is changing that and keeping a lot of records in the pioneering farm from a mono-dairy farm to a diverse agroforestry system. What does it cost per hectare and how long and what kind of offtake do you need? And they found with a minimum of 50k euro per hectare in the Netherlands, you can transition in about seven years to a diverse perennial agroforestry system, only counting wholesale prices, offtake and counting all your hours and paying a fair wage. Of course, they're only in year four and a lot of this model still has to be proven. But what does it mean for the rest of the 50,000 farmers in the Netherlands? What other types of regen systems can they apply? And we need about 150 billion to transition them. That sounds like a lot of money, but also sounds very doable. So let's find out in an episode where we share very openly a lot of numbers.
Speaker 1:This is the Investing in Regenerative Agriculture and Food podcast Investing as if the planet mattered, where we 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 my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume, 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. To make it easy for fans to support our work, we launched our membership community and so many of you have joined us as a member. Thank you. If our work created value for you and if you have the means and only if you have the means consider joining us. Find out more on gumroadcom slash investing in RegenEgg. That is, gumroadcom slash investing in RegenEgg or find the link below Welcome to another episode today with Maarten van Dam, who is a farmer, investor and entrepreneur in the regenerative food and agriculture system and a true pioneer.
Speaker 1:We're sitting here inside with a beautiful view outside, which we're going to describe because the weather is not our friend in terms of being outside in the spring slash summer day. Today. It's a beautiful place. We've walked it, actually, with Matthijs of Wilderland just before, so if you want to hear a lot of the, the birds, the bees, the, the biodiversity, definitely listen to that one. It might be out at this stage already or a bit later, but you can hear the outside, but now it's raining a bit too much to do that, so we're in a very comfortable chair.
Speaker 1:Marta, thank you so much for being here. We never really connected, sat down and talked. I'm very happy we're doing that now, even though we've been in similar circles and nearby circles for a long time, and so I'm very curious about your story because I don't know too much about it actually and how you rolled into the regen space. So I'm going to start with a personal question. We always like to ask is what brings or what makes it that you spend most of your awake hours and minutes thinking about regeneration and regenerative food and agriculture systems? How come the region is such a big part of your life.
Speaker 2:Well, thank you, and it was about time to connect a bit more. An interesting question, and I think it started in my youth, born and raised in Rotterdam but always being taken to a farm we as a family were highly connected with in Zeeland, the southern part of Holland, a big arable farm, 1,500 hectares, and there, I think, must be some seeds planted, which later on came back, so to say, and said well, I always wanted to be a farmer and then from, let's say, say, more the conventional farming turned into more the regenerative part of it, and and that like I liked it even more.
Speaker 1:And it's interesting that some people have that click like I always wanted to be a farmer and you remember what that was like. What was being a farmer to you, or what was the thing that really triggered you? Was it the machines? Was it the? The growing things? Was it the view? Was it what was being a farmer to you, or what was the thing that really triggered you? Was it the machines? Was it the growing things? Was it the view? Was it what was the?
Speaker 2:the trigger, all of the above, but I think first of all it started with the machines, so the big tractors. I spent hours and hours and hours sitting next to the real farmer just driving around, uh, falling asleep, while I was six, seven, eight years, I don't know, maybe a bit younger. So I think it started with the machines, and then also, especially in Zeeland, with the views, because there's no horizon there, or the horizon is very, very far away. So, and then later on it became, I think, more about how tangible it is. It's so for real. If you're talking about business, then farming, with getting your hands dirty, is actually the most. Yeah, for real business you can think of.
Speaker 1:And how did, let's say, the regenerative side of things come into the picture? How did that notion of agriculture can be a part of the solution, not just a smaller part of the problem? And all of those phrases we now take for granted, or at least we at least talk about, we didn't not so long ago, like, how did that path happen for you?
Speaker 2:we didn't not so long ago like how did that path happen for you? Well, for me it took a while, because first I started studied, or in groningen, business administration, and then I went to central east europe. My only objective was earning money, finding out if I was capable of earning some money. So I had a lot of failures but, lucky me, a bit more successes as well. Then I remembered that farming was actually the thing I was really really enthusiastic about. So then I set up quite a few farms in Ukraine, mozambique, kenya, poland and still connected with farming in Netherlands as well.
Speaker 2:And then after a few years I came with the idea well, is it really good what I'm doing? Is it also for next generations still good the way I'm farming now? And the other thing, I must be honest, it was also very hard to earn some decent money from it. So the farming in a conventional way has some margin squeeze and I didn't like that very much. And then the story becomes a bit corny. Then I became father of three daughters. So then you tend to look a bit further than yourself and say, well, I must play a role in keeping my enthusiasm about farming and then thinking about next generations as well, and then you can call it regenerative farming or nature inclusive or whatever, and I did find out what that could be.
Speaker 1:And then what do you do when that realization comes of? I want to look further. I want to focus on the farming piece. Where do you go? What were were there? Documentaries, books, trigger points, visits you've had like I'm not saying light bulb moments, but where what were crucial pieces, where you saw there are other ways, or people are figuring out other ways to farm that might be fitting with the impact I'm looking for.
Speaker 2:Yeah. So for me it started with the usual suspects, like the books and the films we all know. So that's more or less setting the scene, I would say. And then you were together with my wife I need to mention my wife as well, because we know each other already from Rotterdam, so way back, and she has more or less the same thinking about farming and regenerative etc. So we both found out what kind of systems are there and what would be most connected to us. And then I was most connected to us, and then I was very lucky to be on the board of this big farm in Zeeland, so very active actually. So I had my own I wouldn't say pilot farm, because it's way too big, but their reality and the need to do something came nicely together and I was part of that, in in, in, in starting experiments and With non-blowing Etc etc. And and that was actually the start of a journey, and then it ends up in my own farm, where you're now Right unfortunately, let's.
Speaker 1:let's talk about where. Where are we? Schevenkoven, it's east of Utrecht in the Netherlands. It's sort of the center, more or less. Of course, it's an audio medium, so we're gonna make it as visual as possible because people might be walking, driving, cooking, painting, etc. If you describe, to describe this place where, what would you? What would you tell the listeners?
Speaker 2:Well, it's the. We think it's the center of the world, closely to it. It's a very old farm, so actually it's a farm already from the 1600s. It's a very old farm, so actually it's a farm already from the 1600s Beautiful house.
Speaker 2:by the way, it's a beautiful house, originally built as a hunting lodge, but there's always been some innovative thinking on this farm for the last 400 years. It's even in the name included. So Schevighoven. The word Schevig is the Dutch word for flas. That's in Dutch. I don't know what the English word is flex, yeah, flex. Yeah, it's like a henna flex. I'm not sure if that's.
Speaker 1:It's a fiber you can use for a lot of things.
Speaker 2:So back then already so, and then a lot of things happened here, and if we look at the farm now, it's a beautiful farm of 20 hectares, 10 buildings Some are more nice than others. My mother-in-law lives here as well, my parents. So now and then, and I with my family three daughters and my wife, and I with my family three daughters and my wife and then the system is what we call a regenerative permaculture. That we only started five, six years ago.
Speaker 1:Because you bought the farm Eight years ago. Yeah, before, Already with the idea like was it more buying the house and it's a nice place, or the 20 hectares around were already like, ooh, this could be interesting.
Speaker 2:A bit of both. So the first objective was living outside, but then we have some ideas about living with three generations having more activity at home instead of far and away?
Speaker 1:Yeah, because the danger is living outside, but seeing the house and the outside only in the weekends, if you have to always be commuting somewhere, which I think many around here. It's a beautiful area, but I think many of the nicer houses are empty during the day or not not. Quote-unquote productive I think productive is not the right word, but that's yeah, but it was like consciously, intentionally, to be more here as well, not just in the evening and weekend, exactly yeah, and that was more than a nice to have and, looking back, there was some logic in it and when you're right in the middle of it you think, well, it's happening.
Speaker 2:But the objective was indeed to have an active farm with active people and active connections and active in the agricultural space.
Speaker 1:Yeah, for sure. And then, where do you start? Because there are so many options. I mean, yeah, what was planted here? Like? If we imagine, when you bought it, what, what did it look like?
Speaker 2:uh, there were. Well, they were just removed, but there were 800 pigs and 80 cows, and then you have grass and corn and that's it, plain and simple. And and the family who lived here before was a really nice family with five children, but they couldn't find a way, how to, how to proceed with the farm. So they, they decided to set it and then then we came, lucky us, and then, after first having to do some renovations at the buildings, etc. Then we said, well, what kind of role do we want to play in this food and egg, in these healthy food systems? And then we started to look around and, lucky for us, we came.
Speaker 2:We spoke to a lot of people, but especially the talks with Taco Blom and Chef van Dongen, who are, for us, two really nice guys who spoke our language, so to say, they really give a bit more direction. What kind of systems are there and where to choose from? And actually what they said well, have a look at the soil First, start at the soil, what is the soil capable of? And then connect it with your motives. And then it needed to be a regenerative permaculture. That was just the outcome of looking at the soil, connecting with motives.
Speaker 1:When you say permaculture, I think most people know it from permaculture design courses as a design philosophy and a way of farming. I think it fits under the larger umbrella of agroecology, etc. But how do you describe it? What does it mean here?
Speaker 2:Yeah, so we narrowed it down, and when we talk about permaculture, it's permanent agriculture and actually what we say is well, we are growing perennials, that's it. And of course you have this way more complicated systems, but for us it starts with just working with perennials.
Speaker 1:Perennials, yes. Why did the soil tell you that? What was the reasoning here? I think in general, we need parallelization of agriculture, but what specifically spoke?
Speaker 2:So it is not the rich clay or sediments, it's more like sandy grounds, sandy soil, so to say poor soil, I would say, and combining with the motive that we really would like to showcase that these kind of systems can also be financially viable, then you don't want to compete with the more rich clay soils, you just want to make it work for this soil. And then we found out that it must be perennial, because perennials on these kinds of soils can perform actually quite well as a natural system. And then it grew on us and we also said well, we need to really look at it as business, because that's our objective. Because our objective, which is there, is that we would like to convince the 50,000 other farmers in the Netherlands and maybe even further, but let's concentrate on the 50,000. We want to create some sort of perspective, some sort of future for them. And we thought, well, the best way to do that is showcasing.
Speaker 1:And when that's your objective. You want a place where farmers come and see something they can relate to and that's far enough in the future that it makes sense, but close enough that it makes sense. Let's say, how do you do that? Because what we see outside here and we will describe it in a bit is a complex system, a lot of trees, obviously perennials, a lot of trees. It's very different from the neighbors and very different from what was here before. How do you make sure you can connect to the conventional curious, let's say.
Speaker 2:Yeah, that's hard work on the one hand. On the other hand, a bit with my background, having farmed in a conventional way, it gave me some sort of credibility. So the farmers said, well, let's give him the benefit of the doubt and listen to his story. And just, we invite a lot of people here. So I think we have about 3000 people visiting us every year and, lucky us, a lot of them are farmers. They're willing to invest some time to come and see and listen. And then it sounds a bit silly, I would say, but we tend to speak about the numbers quite soon with them, just talk about euros, kilograms, hours, interest rates, whatever, and and then it resonates easy with the worries and other things from the conventional farmers.
Speaker 1:And then you start talking, so let's describe what we see outside and what you have planted with the team. What are the systems you currently have in in the ground, on the ground, above the ground. Let's say what should we imagine if we walk around here, of course through audio. So close your eyes no, well, we um.
Speaker 2:So this regenerative permaculture of us is like in three, four, five layers. We we planted about 40 crops, 40 different crops, and per crop about two, three different varieties, so quite diverse. And it starts with the perennial herbs, then we have a big group of perennial vegetables, so multi-annual vegetables. We have a lot of berries which grew about till 150, two meters, the bushes, and then we have quite a few fruit trees. Is that the word? Yeah, I think so. Apples, pears, pau, pau. It's a bit pow pow, it's a bit off the beaten track, and then it ends in the walnut, chestnuts and all these kinds of higher trees. I would say, well, that was the objective. And then in the Netherlands every square meter is sort of bestemmed, sort of how do you call that?
Speaker 1:Regulated. It's regulated.
Speaker 2:So then you need to compromise with your neighbors government, municipalities, whatever and then it becomes a bit of a compromised system and that's what we see. So in fact it's quite low, so high trees are rarely here, because you have all these kinds of regulations.
Speaker 1:So there's regulation on the height of trees, for sure.
Speaker 2:So some areas they are not allowed to go up further than 1.5 meters. Some areas are not allowed to go up to more than 3.5, especially the 0.5. It's quite silly and you have areas where it can be 5.5 meters.
Speaker 1:crazy have you figured out why? Like what, what is? Who came?
Speaker 2:up with that rule, but is it? For view yeah the view. Some trees were not allowed to, that the roots would go deeper than I think, 30 centimeters or something. So then you're. It's also some sort of restriction. Before here there was some fields with corn, and corn can go up to, I think, 3.5 meters. So then it was decided okay, five meters it's pretty random it's what you have to play with those most of those rules just comply a bit, be a bit naughty, because I don't think nobody's going to check not really, and otherwise we will find a newspaper and say, well, I have a nice article.
Speaker 1:So I think but it's also your role as a pioneer, in that sense, to show the silliness of some of these rules, to show what is possible in this context. And where does it create this tension? Yeah, for sure.
Speaker 2:And then the funny thing is if later on people come from government and ministers and all these people who are making policies, and if you explain them a bit in a funny way, because that's easier to grasp, so wow, can't be true. Well, I'm sorry, but it is very much true. Took us 27 investigations before we even were allowed to start yeah, but you did.
Speaker 1:And then, talking about the number, like how do you because I don't think there are too many diverse agroforestry systems in the Netherlands or perennial systems in general you say we talk about the numbers pretty quickly how do you even model for this? Like, how do you for 40 different crops with all the different varieties, like how did that puzzle look like? How does it look like now? But let's say when you begun and designed it, how does a cash flow model work?
Speaker 2:We started with models, for good or for bad, I don't know.
Speaker 2:X kilos after X years X kilos trees per tree, and very precise. Then, with the model, we went to our biggest critics and we went to the biggest believers and said what can be true? And then in the end we say, well, this must be it. And the model said and we always make the joke Excel says because then it's not us but Excel that it would take seven years to go to a full-grown system, also on the financial side. Before that it became clear that it was quite an investment to start with. So we came with numbers and we are happy to share numbers because we think that's the only way to convince others that these might be the numbers and maybe it's just us, but people can learn from it. Yeah, we don't talk enough about numbers.
Speaker 2:Well, I agree, I fully agree. And if the numbers are good or bad, or right or wrong, but let's try to create some facts and figures. So we came to the number. First of all, that it would take an investment of 100,000 euros per hectare on top of the hectare itself.
Speaker 1:It's buying itself okay, Of which?
Speaker 2:half of it was to set it up and the other 50,000 to compensate for the loss-making first five years, for the loss making first five years.
Speaker 1:so half of it would be labor seedlings, losses, replanting, irrigation, irrigation the whole like prep, preparing the beds, etc. On a hector, yeah, and then the other is basically bridging the first five years before the system starts to produce.
Speaker 2:Yeah, so it starts with maximum loss, basically like no income like basically no income, except if you have wilder land.
Speaker 1:It's like something that comes in only the herbs, yeah, only the herbs are the first one, and maybe a bit in the vegetables as well. But yeah, maybe after two years with the herbs? Okay, but it's a financial question. So did that scare you, that number, when you first saw that?
Speaker 2:um, it was more like a fact of life. It's a financial question. So did that scare you, that number, when you first saw that? It was more like a fact of life. It's a big number because all in all, with 20 hectares, you say wow. So the hectares is 2 million and the other is also 2 million.
Speaker 1:So then you're talking about 4 million on a relatively small farm and then you start speaking about the other. Was it 50,000 other farmers? That becomes a lot of zeros very quickly. Yeah, yeah, yeah. And then you start speaking about the other. Was it 50,000 other farmers? That becomes a lot of zeros very quickly. Yeah, yeah, yeah yeah.
Speaker 2:So it was a bit of a yeah, a brutal number, I would say, but then you get used to it. So well, that must be it. And if you have some projections that in seven years you have a nice growth margin per hectare, you might have a growth margin.
Speaker 1:Yeah, because what are the numbers based on the sales of these crops and fruits and veggies, etc. Did you take market prices? How do you even model the sales side, I mean the investment side? Yeah, you probably can figure out some numbers of preparing etc. But then where does it go and for what kind of prices? Because, let's say, the the market side of things is not easy. Like, how did you, yeah, how did you do that side of the model?
Speaker 2:so keeping in mind that we really would like to be copy pasted by other farms, so it must be accessible for other cannot be your own, cannot be our only super niche nice shop and apples three times the normal price.
Speaker 2:So we really, we really rigid in that. So we are. We don't have any volunteers. We sell all our crops for wholesale, wholesale prices. We don't have any special subsidies. We put the price on capital three percent, we put the price on land of two percent. So we try to use the actual numbers. Well, what's actual?
Speaker 2:but realistic numbers we think back then, already four years ago, when the interest was negative in the Netherlands. But okay, let's have it. And and then we said, well, now all the farmers could do the same, there's nothing special to our system. And then it should end up with a 30,000 euros per hectare per year turnover and hopefully not more than 23,000 euros per hectare per year of costs After five to seven years. After five to seven years, and Actually after seven years, there is a, there is a, there's a runway. And because before the tree is a tree, yeah, and not dying with all the rain, quite a few trees are dying, but also there we have some building.
Speaker 1:Unforeseen replacements.
Speaker 2:So it should end up with a nice gross margin. Well, nice is subjective of 7,000 euros per hectare per year and people could say, well, that's not a lot on a 200,000, cash out 100,000 land, 100,000 others. But then say, well, ok, if you don't think that's a lot, please have a look at the normal arable farm. People are shocked.
Speaker 1:I think People are shocked. What's the?
Speaker 2:normal arable farm. Well, and then I play a bit with numbers because on average, which is a bit dangerous. But let's have it. An arable farm in the Netherlands has on average a €3,000 turnover Only three, so ten times less. €2,000 cost €1,000 gross margin, but from that €1,000 gross margin the farmer also has to live from it, so it's not really profit.
Speaker 1:It never includes the salary.
Speaker 2:No, and in our system the farmer has a decent income of 60,000 euros per year.
Speaker 1:And that's already included in the 23. Exactly.
Speaker 2:So if you think, well, 7,000 is not enough, so okay, perfect, that's your choice. But then arable farming is even worse. The only thing is that there are in our system. There are a lot of unknowns, so we need to build the proof points, and it takes seven years, and with normal arable farming it's the year after, right, yeah, but I always.
Speaker 2:I mean you have to bridge, yeah, we have to bridge farming it's the year after, right, so yeah, but I always I mean you have to bridge yeah, we have to bridge, but it's a finance question and we've seen that with renewable energy.
Speaker 1:We've seen that, like after the proof points are there, it becomes more bankable. It becomes like there there are whole different streams available. We're not there yet, but I feel and see and sense we can learn a lot from the early solar park developers or the roof developers, because they've been through the same with a different system, less complex, but there is offtake, there's this, there's cost, there's maintenance. So those puzzle pieces are the same, they're just very differently shaped. And so this was the model. And now, x years in, what's been the biggest surprise?
Speaker 2:model and now x years in. What's been the biggest surprise? Well, uh, we, we knew it was not linear, so we knew it was like ups and downs and many downs and few ups and whatever. So a few surprises positive surprises was that the, the, the natural system came back way sooner than we thought, like the soil, life, the organic materials, the biodiversity. We thought that would also take a few years, but actually it's just letting it go for the first one or two years and already you could see, well, this system is so robust in itself. Just let it go. So that was a nice observation. We made a mistake with the calculations because the planting in our model was like planting the 20 hectare in one go, one shot. And we did it lucky us in the end piece by piece and learned. We made all the mistakes in the first two hectares. Like all the mistakes you can.
Speaker 1:First two hectares, like all the mistakes you can think of what's the one that comes to mind, the biggest one.
Speaker 2:Well, the most funny one was that we hired a machine on a Tuesday to make the seeding beds. I would say so. It was hired on Tuesday. So on Tuesday we thought, well, let's start to work. But every farmer can tell you you need to work when it's ready, when the soil is ready, when the weather is good, and not when you hire this damn machine. And we just did it and all the things we did then. I think we still have the consequences of that because they didn't, and I think we still have the consequences of that because they didn't produce well and other things were like, especially in the perennial system.
Speaker 2:Especially in the perennial system.
Speaker 1:The planting and the preps and the timing and the weather. I mean in Arabo. I'm not saying it's, but you have another year and another year here. It's like it's going to be. It's there forever.
Speaker 2:Not forever, but for a long time. So making mistakes in the beginning, and the other thing is that not so funny, but too fast. So we said, well, let's put the system there to work In all the complexity, and then it's one go. And we came to think, well, well, you should build your complexity in the system in the years, take a bit more time what do you mean by that?
Speaker 1:practically? What does that mean?
Speaker 2:maybe just first start planting some trees and and later on a few more trees, so not having the whole system with the 40 crops and three varieties per crop and five layers in one go, maybe layer for layer, but that's a bit too much, because otherwise it's just too complex.
Speaker 1:It's too complex for maintenance or too complex for why is that an?
Speaker 2:issue? Well, because the soil needs a bit of time to, I would say, recover or get used to the roots, right. So in one go it leads up to a lot of unintentional consequences. For example, we really would like to have the white clover all over the place between all the things, and we just managed to do maybe half, and the other half is still grass, which is not very useful. There we are not really able to remove the grass anymore because the trees are there, and so then you're a bit stuck to grass where you don't want to have grass and are you now still?
Speaker 1:have you planted everything or are you still, and how are you doing it different? Like, what's the biggest difference from planting this year compared to five years ago, six years ago, when you started?
Speaker 2:Well, at the moment we only have planted seven half hectares, grown to 26. So we have access to 26 hectares. Only seven half have been planted, and 12, so almost a 4x.
Speaker 2:You still have to do three yeah yeah, but we will make a big jump this year, next year, but we start with a plot twist, which is 12 hectares and instead of planting right away or doing something, we just well, maybe we should first work for two years on improving the soil at the right level and only plant after that trees and berries and what have you. So we already started with the plot, but not with planting, but only with preparing the soil, which also postponed some of the cost side.
Speaker 2:As well. Yeah, and we think well. In the beginning, following the Excel sheet, we said, well, just be fast and start at day one. And then we came to mind well, take your time and you will make even quicker progress. So maybe you can still have the seven years time frame About two years later. Two years later, but then in year three to seven it grows faster and it becomes more like a full-grown system in four years instead of seven years.
Speaker 1:Which will be dramatically faster if you look at the Excel and if you look at the years, if you can shave off two years of a seven year cycle. That's crazy, but with good prep we've seen trees grow way faster than in other systems. And with the right pruning and with the right and all those and I don't think there were or are many people in, let's say, northwestern Europe that could help you plan this in the best possible way you probably have to figure out most of that yourself.
Speaker 2:Yeah, and we have great partners. They all know a piece, a piece of the total puzzle. But yeah, you have to find out yourself, especially for this place, with this soil, with our motives, et cetera, et cetera.
Speaker 1:This context, context and I think that's the best learning we we have. And now the market side of things like where are you in that cycle if you've been harvesting the herbs, obviously, and some, and the vegetables? Where are you in in the model and where you in reality on the market side of things in terms of fruits, etc yeah, and we are, and, and, because we are selling for wholesale prices, there is always a market. But how big do you need? Like whole also means a lot Like how small can you get?
Speaker 2:Yeah. So then you need to find the off-takers, the buyers, which are also able to buy just little volumes.
Speaker 1:Was that difficult?
Speaker 2:Yes and no. For us not so much because we tend to make a lot of noise and so also from my marketing material it helps to be connected a bit with this farm. So we found very quickly Boerschappen.
Speaker 1:Shout out to Stijn, sorry, shout out to Stijn, shout out to Stijnen.
Speaker 2:Shout out to Stijn yeah sorry, shout out to. Stijn, shout out to Stijn, really shout out to Stijn. And he started well, say we will just buy everything you produce, but that's a nice way of starting right In reality. Okay, then you still need to work a bit with that, and this year, next to Boerschappen, we are very proud to have Crisp on board.
Speaker 1:Online supermarket. Online supermarket.
Speaker 2:Netherlands and quite a big company already in five years, and they're also very flexible and understanding and know what can happen, because it's very hard for us to predict when and how much of something will be there, and they work really nicely with us and if the volumes are too small. We found three restaurants closely by. Actually, two of them are our neighbors that's really easy and one in Doornbuurt. And if we have only one box of something, we just call this the chef and say, well, chef, this is it, this is it, and he always says yes, so it's starting already to to bring in revenue, other revenues on on schedule, or is it?
Speaker 1:I mean, of course, on like per hectare, maybe because he planted less than what you thought yeah, so yes, we are, this year we will.
Speaker 2:We will end up with about 15,000 euros per hectare which is, we are halfway, halfway after how many years? The first four the first four seasons and the last two seasons. So not too bad, not too bad at all. Don't ask me about the costs, because the cost is a bit more complicated. Yeah, Probably you will ask me especially when I say don't ask me, we're going there.
Speaker 2:Yeah, sure, but well, the cost is you should be able to divide the cost over 20 hectares because we have a very nice team of six people, but that's, that's not six people for the seven half hectares. Now there's six people preparing 26, but they're already having full-time salaries so. So the cost is not not very much in line, but that has more to do with onboarding new hackers.
Speaker 1:And how have you been able to finance that?
Speaker 2:Well, we really would like to be out and visible, so we decided to have one third of the financing needs, about one and a half million, to organize with crowdfunding, and we managed to do so. So 700 crowdfunders on average, 2 000 euros per person.
Speaker 1:great ambassadors uh, it's a grant, it's a loan, it's a 10-year loan, 10-year loan for you did two, I think, right yeah, in two, in two branches. I don't remember if I joined or missed it, because it was, it was filled up.
Speaker 2:I'm quite sure that you missed it. Yeah, because I think I know all of them. Yeah no, I didn't because I think it filled up fast.
Speaker 1:It was in a time.
Speaker 2:Well, the first one yes, and the second one was, I think, in almost 60 minutes that One hour.
Speaker 1:We call that.
Speaker 2:The other one was quite soon after, took 60 days. There was a bit less excitement or something. Well, we managed. It's a 10 year loan, 10 year loan, 2.8% of which percentage goes to the platform. So for that time, with negative interest, it was fine. Now you could argue it's not that much, but on the other hand, in agriculture and also with a collateral, so in 10 years we will just repay the loan one way or the other. And then we have found another one and a half million with, found another one and a half million with. We can't call them full French families, but let's say call them informals the Fs. The Fs, the bigger tickets, I would say, let's say 50,000, 100,000, 150,000, something.
Speaker 1:Same conditions, or is it?
Speaker 2:different.
Speaker 1:No collateral 3%, so yeah, also 10 year.
Speaker 2:Also 10 year.
Speaker 1:Which gives you space because you have 7 years, but of course some are starting later.
Speaker 2:But no, we took the older ones.
Speaker 1:Yeah, but it gives you, like, mental and financial space, because 10 isn't like, compared to the, the XL of 7. Sure, yeah, gives you a bit more breathing, yeah, and still.
Speaker 2:It's quite challenging because you know the day will come and you know for sure that you can't repay the loans from the agriculture, produce, from the system, so you need to refinance. So we're already starting to think about refinancing In a new world because negative interest is not there, at least we don't know in a couple of years, but at the moment no, but it's the current.
Speaker 1:That's what all, not all. That's what all heavily industrialized farmers in the Netherlands have to think about, or many of them are on the refinancing loan.
Speaker 2:So it's a very normal, it's there so also having that experience, some way we will benefit from it, and the remaining 1.7 it's our own money, savings or whatever, and so quite some skin in the game, so to say. And we share these numbers because, like you just said, all the farmers need to deal with that. If they want to go into transition, then somehow you need to deal with that. If they want to go into transition, then somehow you need to refinance, you need to think about other structures, and banks will come, but not as first movers which they would say themselves as well.
Speaker 1:And so now this new 12 hectares, what is different compared to, let's say, the one you planted four years ago?
Speaker 2:So we still need to plant it with the real things. Now we are just improving the soil.
Speaker 1:But what are you planning to do different? What have you learned?
Speaker 2:Oh well, we learned a lot about the varieties we would like to have. What works here? What works here? And it's more or less the same land. It's a bit more bare. Yeah, bare is not.
Speaker 1:More to the west yeah.
Speaker 2:Five kilometers to the west. So we are trying to set up the same system, the same crops, the right varieties. Maybe a few less than 40. I think we will go back to more like 30. That's already quite a puzzle, I think, for that system. We will go more to the hopefully, because we need the permits to more to the trees and the berries and less to the vegetables. And, yes, we will keep on doing the herbs. For sure, we will first have a nice layer of white clover, because that's what we would like to have as a base and actually that's what we started. On another plot of eight and a half hectares, we applied that system already. So, and learning from that as well, and how has the dissemination worked?
Speaker 1:like you have a lot of farmers visiting here, have you been like? Have other farmers been inspired here and say, okay, help me figure that out on my farm as well. Or I have a few hectares. I can see, even though it's just between brackets four years in. But you can see some of the numbers, some of the revenue. Okay, the costs are what they are at that scale, with our economies of scale, et cetera, et cetera. Machinery, I mean, there's a lot to figure out. But how is the sharing or the spreading?
Speaker 2:Yeah, the spreading, the traction, Well, it's there. So we started the program quite early with 70 farmers from Utrecht, almost all of them from the province of Utrecht, and that was like cattle and orchards and even chicken, and now arable farming and I think about 12 to 15 farmers are making their first steps, of which three farmers are really have already transitioned into regenerative practices, which is really nice, right, which three farmers really transitioned into regenerative practices already?
Speaker 1:And that's nice. Other than dealing with the same offtake, are they also working with boerschap? Is that a draw, or are they like we can sell for wholesale? So we're really looking at the practices and the lessons learned here, like what's the de-risking factor? What's the reason they're doing this now, compared to a couple of years ago, where they might have, could have done it as well, but they didn't have this focal point in in there. Yeah as their neighbor or their region.
Speaker 2:Yeah, and we are quite ambitious. So next to Scheeve Cove as a farm we set up Scheeve Cove. A great Scheeve Cove grows is it is a separate company and there we participate in these kinds of farms as well. What we really offer, next to knowledge and sharing and all these kind of things, we offer them finance and connections with buyers. So what really made them go was that we could make it financially happen.
Speaker 2:But maybe even more important, we could make the right contracts with the off-takers, the buyers of their produce for the right prices. And they said, okay, now we feel a bit more secure and we have also a farm where we are very proud to be part of, which is a dairy farm 90 cows, 50 hectares, really turning into a regenerative system. But that farm needed 80 cents per liter. Well, that's not the normal price, 45 or something is the normal price. But then we found the right people to actually buy the milk for 80 cents per liter for the long term. And then she said well, now I'm prepared to take the risk of the financing work towards a regenerative system and have the comfort of 80 cent per liter.
Speaker 1:So it's really the market, education and finance triangle that makes people, I mean, in different forms and shapes. Exactly, it depends on the farm, but yeah.
Speaker 2:Depends on the farm. And then you need to make sure that you are doing the right stuff planting the right trees, having the right type of cows, the right cows to because all the cows we now have are not really able to be outside or something.
Speaker 2:So you really need to change some things, but with the comfort of a credible party buying your stuff, with a credible party in financing the transition and not being alone, because I think that's maybe even the most important thing why we are allowed to join, because most farmers just feel alone.
Speaker 1:Especially the pioneers.
Speaker 2:Especially pioneers. They say, well, it's so hard to be alone and you need just to connect with other pioneers, and that's how we try to organize it and what kind of financing do you offer them? Then, in this case, credits to TrioDos and really, because they really are out there, in, in, in offering this transition, combined with a private fund who was very much willing to do this and those two they made possible to To transition. Yeah, so it's private and, let's say, more institutional capital.
Speaker 1:And which both are probably even more triodos, because we did a full transition finance series back in the day now I'm saying three, four years ago and the conclusion was we don't need transition finance until you have better offtake agreements. And we had an interview with triodos actually. But if you have that offtake and then suddenly things become investable still not easy, but we know that from the, the solar industry again we have the power purchase agreements in the ppas. Then suddenly, and you have the, the walmart underneath or the ikea buying it, and suddenly the roof solar becomes investable and financeable. And if you start bundling, then it becomes funds etc. And what's your goal there, with scavenger as a or? What's your? Do you see that morphing intoeid? Do you see that moving into a fund? Do you see it moving into other things? I mean there's consultancy, obviously, there's participation, education, offtake it's a lot of different things and we aim for participation.
Speaker 2:So of course it can be a bit via consultancy or something, but in the end we really think, and then it's also a bit with us how we like to operate.
Speaker 1:We really would like to stay, to be next to the farmer meaning you participate in the financing or you participate in the farm in the farm.
Speaker 2:Yeah, yeah and well, we decided to go there starting this year. Before that it was more like consultancy, but consultancy is sending invoices to farmers. It didn't feel right. It was not us, and then you need to keep track of your hours and we don't want to do that, et cetera. So this feels a bit way more aligned than what you just said about the the right contracts. I think that was really the trigger for a lot of financiers, investors to say well, this business case is valid because we have these contracts, so it's well. And then hopefully, this will be a nice example for many to follow and how difficult?
Speaker 1:do you see a lot of opportunities there. Let's call it difficult on the offtake side, like how interested are buyers? I mean you're very fortunate with two that are very close here. How accessible is that for others? Like, how is the buying side looking at these kind of systems with also less commoditization or decommoditization? Is there enough demand, let's say coming to you?
Speaker 2:never enough, but we're, yeah, well, I, I'm, I'm quite positive because, uh, now the the pioneers, uh like the, the vtoms, and then Albon, of these worlds, like the big catering companies. They use these storylines also to win their tenders. If they try to win tenders and I think they are setting the scene and I could imagine that quite a few will follow and maybe in the end, even supermarkets, but let's first try to find.
Speaker 1:It's an interesting point. There's a whole world beyond the supermarket distribution. We all know that we've tried a lot of short chain approaches. Some of them work, work, but often squeeze and and but there's a whole world of food that ends up on a plate that doesn't go through supermarkets and you're saying, yeah, lucky go there and find the ones that are able to take enough and pay yeah yeah, and I'm not sure how.
Speaker 2:If supermarkets are accountable for 80 or 90 percent I I don't know but the other 10 or 20 percent, I think we should aim for that, which is a big market in itself. So I think that's enough for the coming first thousand regenerative farms in the Netherlands, which is only 2 percent, and then hopefully it becomes a bit more mainstream, and then even supermarkets, and we have some nice examples of supermarkets already going there. Probably you know much better than I do, but there are a few and let's promote them.
Speaker 1:Yeah, it's interesting, the offtake side, which triggers like, which pulls the farmer like, the conversation very quickly, very rightfully so, becomes about money. And if you can offer I mean previously with Matthijs and Waelderland, these are weeds, oh, you pay me for it, I'm perfectly fine with it. Now that's a bit black and white, but that's a conversation Like if you can grow it and you pay for it properly per square meter, then of course, why not? Why not? And getting to that instead of a very philosophical discussion, why your soil health is so soil health is so important to all of us also true, also very much true that like the base, that's the but, but, and so you talk to a lot of investors.
Speaker 1:You were an investor had yourself you are very involved in in pin mimic, which we'll cover in in another, another episode. But what do you tell investors? Because I think there's a lot. I mean, they reach, they write us as well, like this region ag thing. You must get that question all the time.
Speaker 1:What is your main message? Let's say to the financial world, to amsterdam is not that far from here. You were there this morning. If you are in, let's say the financial heart, and we do this in the theater. I don't know if there's a nice theater to the financial world, amsterdam is not that far from here. You were there this morning. If you are in, let's say the financial heart, and we do this in a theater. I don't know if there's a nice theater in the financial heart of Amsterdam, but there are very nice theaters in Amsterdam. Room is full of financial people managing their own wealth, other people's wealth. They're excited after this evening. We do this in front of a live audience. But what's the main message? You want them to walk away with and they do something the next morning. Like if you had to plant one seed of this regen thing? What would that message be?
Speaker 2:We have three million hectares in the Netherlands which we call agricultural land. I would say and we think it's just a number that on average because this is a very complex system and you have also less complex systems on average you need about 50,000 euros per hectare to go into a transition Without buying, without the buying. So that's 150 billion. So all the arguments of the big pension funds etc. Which will be also in the audience, they say, well, the numbers are too small, etc. Okay, I can come up with a big number. It's just 150 billion.
Speaker 2:What is needed to have the whole system of the Netherlands in seven years into a regenerative system, and maybe you have 10, 15 different systems, which regenerative permaculture is just one on this type of soil, etc. Etc. And in this 150 billion there's room for the big investors and you can have the land as collateral, because the land is worth three million times a thousand, which is 300 billion. So there's a lot of collateral. And then on top of that we didn't even discuss this right now, but maybe because it's too obvious is you have all these other ecosystem services.
Speaker 1:You cannot see the face of it, but he's not really on board with this term.
Speaker 2:Yeah, it feels a bit transactional, but they're there.
Speaker 1:They're there and we all benefit and we might figure out ways to get paid for it, which is great, but you're saying that's not the basic of the financial model.
Speaker 2:No, if it already works with just producing food, then you could top up with all the kinds of things where farmers should be paid for. And if you look back to the audience of investors, there's room for everybody in this 150 billion. So find your right place. Start now. Start now and make it happen. And of this 150 billion, if we first start with only 1.5, the first 1%, well you will see what happens. Then it will go really fast and I'm quite positive that that will happen in the coming 1, 2, 3, 4, 5 years. And I can imagine that a lot of investors would like to be there, because then you can be proud of what you're doing.
Speaker 1:It's a very natural bridge to a 1 billion euro question we like to ask. So let's flip it. You're in the audience. You actually have a billion euros to invest. It has to be invested. It could be very long term, but it has to be put to work. What would you focus on? I'm not looking for exact amounts. I always say this, I think people are like but I'm looking for what would people in the space, like yourself, used to numbers, used to farming? What will you prioritize? What are main buckets where things have to go? If you have a billion, which is objectively a lot of money, and nothing at the same time?
Speaker 2:Yeah, so the full billion I really would offer to farmers willing to go into a transition, needing between the 25 and 100,000 euros per hectare, finding the first really good, good, good entrepreneurs because not all farmers are good entrepreneurs, but you need good entrepreneurs to make it happen and build showcases in the 10, 15 different systems and maybe 10 farmers per system. So find the first 100 farmers, spread the one billion to them and make it happen, and some of them will fail, so you need to have it in one bucket, one fund, but the other nines will succeed.
Speaker 1:And you're saying not all farmers are good entrepreneurs. Do you see that quickly, like when they come here or when you visit, because people are approaching you for Schevenko Overgroeid, and also in general visits here? What's the percentage that's good entrepreneurs or that you get excited about, let's say, of the farmers that you interact with? Is it 50, 20, 10, five?
Speaker 2:More like 10. Because the other 90, and I really like what they're doing, or I really understand what they're doing, but they're just in that position because of not a deliberate choice made to and that doesn't make them per se really good entrepreneurs and normally that's okay, like restaurants or whatever. They will go on and they will make a decent living. But if you need to make the transition, you better watch out for the real good entrepreneurs, because on top of being a really good farmer, you need to do so much extra and therefore you need some special people, some pioneers, some You're saying 10%, 15%, yeah, and significantly less than half.
Speaker 1:I think that's the Significantly less than half, but they're finding you. You're finding them like there's the. The group is there.
Speaker 2:The group is definitely there and the rest of the 95% need some help and they need some help, especially from the first 5%.
Speaker 1:They need help. But focus on the pioneers and get them the help. Let's focus on the 5-10% the help in there. Let's focus on that five to ten percent of the absolute cutting-edge, pioneered ones. Getting them to them. They will become showcases. Yeah, monitor their financing as well, which? Nobody is doing and all the other stuff and all the other stuff, benchmarks everywhere data data, data data proof points because otherwise we can never get the pension funds to do the next 150 billion and they shouldn't, because they need that and that will unlock.
Speaker 2:Unlock. So the first billion aim for the first 5%, because those are the most important people and probably the most entrepreneurial people to build the showcases in all different kinds of systems and they will be the pioneers where the other 95% will follow and probably you can divide the 95% in different groups, but more or less, if you ask me the one billion question, I definitely would say, well, fine to write a few percent and in your experience with the market side, 45% of the market.
Speaker 1:is the market there Like the offtake? Are there enough interested buyers from the Crisp and the Boerschap and others to absorb that, not saying the other 95, but to at least absorb that for good prices that make sense?
Speaker 2:No doubt about it, and that's because the biggest complaint now to the somewhat bigger off-takers is that our volume is actually a bit too small to make it worthwhile.
Speaker 1:Which is a nice problem.
Speaker 2:Which is nice, so they don't need one dairy farm. They actually would like to have 50. For even that 80% yes because then they have national, national coverage. They can have some, some bigger volumes in regenerative g's or brie or etc. So now it's more like the struggle going to a certain volume and then hopefully the markets will grow like in the mainstream markets, like supermarkets as well. Yeah.
Speaker 1:And as a final question so we take away your fund. But if you had the magic power to change one thing overnight, if you had a magic wand and one wish where people yeah, we do this and this, no one. One thing only could be legislation, could be consciousness, could be. One thing only could be legislation, could be consciousness, could be no chemical fossil fertilizer could be plant-based, could be anything. What would you do if you had only one thing you could change overnight?
Speaker 2:Bring back soil life, soil life, soil life, because that takes years before it's back, if it's gone, and if you could have that instantly, that would really move the needle, because with the soil life I wouldn't say all problems are solved.
Speaker 1:Even in conventional farming.
Speaker 2:In conventional, in all the soil, let's say in the Netherlands 3 million hectares. If in an overnight soil life would be back, it would give such a push to agriculture, produce, to nutritional values, to water storage. What have you? Even the snails would disappear. Right Now we have a big snail problem every night.
Speaker 1:I see a lot of woo in the XT.
Speaker 2:Yeah, and that's with a purpose and if you have healthy soil, the snails will not be there in these numbers.
Speaker 1:Just to give you a stupid example, but if you have a lot of lettuce, it's definitely an interesting example.
Speaker 2:So soil life right tomorrow.
Speaker 1:I heard there's a whole market now for runner ducks that eat the snails, like explosive growth in the Netherlands, because there's a huge snail problem. Everybody has vegetables, he knows that, and it's way too wet. And as a final one, always a final question leads to another one what do people in the region egg space think of you coming in and saying numbers, numbers, numbers for measuring. This is a transition piece. How is that received? Let's say, regen bubble, so to say, so to speak?
Speaker 2:what's the the normal reaction you you get, because we haven't seen too many people doing that, unfortunately well, normally we get nice reactions to that and some are a bit distracted because they say, well, it has to do with feeling and and connected and community etc. And then I say, well, all that's true as well. We only have a little piece of the puzzle we are trying to to showcase, so bear with us. We think it's also important, but for a few people that's not their real focus and that's fine, because there are so many other aspects which are even as important as well. But for the vast majority, most people say wow, thank you for just talking about numbers and kilograms and hours and euros and and no volunteers, yeah no volunteers and it's for real, and, oh, there's a nice connection to the real world, and has it, the real world?
Speaker 1:Yeah, the conventional, which is a word I don't like. I think every investor hates it as well. Now, there are a lot of these interesting terms we use, but yeah, let's say for the majority and the curious, but not yet Didn't drink the Kool-Aid yet.
Speaker 2:Yeah, and it's a nice way of talking to each other because, yeah, Because it's a standard answer.
Speaker 1:One this can never feed the world. Okay, a lot of studies Seems nonsense. Two, this cannot go. This is not a manager viable. It's either you're rich as a hobby and you end up poor, or it's like it will just never work, et cetera, et cetera. But then, okay, let's talk about numbers, let's talk about conventional current farmers, how much they make, subsidies, time, salary, let's compare and let's actually track and trace and see. So it's extremely needed. So I want to thank you for your time and be conscious of your time and wrap up here as well, and thank you for the work you do, for hosting us here in a beautiful space inside and a beautiful space outside, which I had the pleasure to walk, and I'm very curious to to follow this over time and see, um, yeah, where, where the numbers take us thank you, it was really my pleasure to uh to talk to you.
Speaker 1:Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investinginregenerativeagriculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcasts? That really helps. Thanks again and see you next time.
