Member AUM
$70 trillion

Setting Course for Agricultural Resilience – A Report From Groundswell

Groundswell Festival 2024 - Max Boucher
8 July 2024
Written by:

Last month, I attended the Groundswell Regenerative Agriculture Festival in Hertfordshire, writes Max Boucher, Senior Manager, R&E - Biodiversity and Oceans at FAIRR. Now in its eighth year, the festival “by farmers, for farmers” provides a forum for anyone interested in regenerative agriculture, its possibilities and limitations, to pose questions, offer solutions, and bring their lived experience. 

Naturally, attendees, who travelled to the festival from all parts of the UK and further abroad, are aligned with regenerative agriculture – or the idea that food production should give back as much to the land as it takes.  

With any event of this kind, there is a certain self-selection bias. Yet, over the two days of talks and presentations by people representing all cogs in the food production machine, three key messages stood out. 

A Shift From Net Emissions to Climate Resilience and Adaptation

The “farm to fork” supply chain is long and beset by an enormous range of variables that are mostly out of the control of those either growing, raising, or even selling the products that reach our plates.  

Extreme weather events caused by a changing climate and diseases affecting crops and livestock - paired with external threats including wars and geopolitical upheavals - the industry faces increasingly volatile prices.  

Setting ambitious targets to build a resilient and sustainable agricultural sector goes hand in hand with embracing nature-based solutions that reduce net emissions overall. Climate change is already impacting food prices. The people who farm the 33% of already degraded soils are particularly at risk, and so are the companies they supply. FAIRR’s recent work on evaluating some of the solutions and opportunities for investors in the climate / nature nexus aims to supplement this debate with some evidence-backed research. 

The need for resilience was heard from most speakers and attendees I met, from farmers, restaurant operators, packaged food companies and supermarkets. This is a distinct shift from just a few years ago, when companies focused the discussion on carbon sequestration in soils. 

Farmers operating near rivers are keenly aware that they are delivering a public service to surrounding towns and cities by adapting to more frequent flooding through the better use of vegetation, reducing the pressure on flood defences and local water utilities. 

All of this reflects the growing demand for food that is produced in a way that works with, rather than against, nature, but also importantly the pressure felt by consumers from food prices in the UK having risen by 22.5% since 2022.  

Several farmers stressed that they are already operating on razor-thin profit margins and would struggle to afford to take risks in developing and adopting different practices. It is clear that the corporations they supply also need to be part of the process. 

Support and Financial Incentives Are Lacking

A parallel was made during a Q&A at the festival: Organic products that fetch a premium with consumers at the point of sale produce higher profit margins which almost entirely benefit retailers and not the producer. But it is on farms, of course, that the real work goes on to upgrade practices and convert land to meet the standards that earn those premium prices. The lack of long-term financial incentives may partly explain why these practices have never gained the traction needed to make a systemic change to mitigate the environmental impacts of food production. This is despite the transition grants offered by the European Union. Investors in the food and agriculture sector are increasingly interested in this space and are engaging their portfolio companies to implement more long-term sustainable strategies in their supply chains. 

Our own research, here at FAIRR, found that just 42% of companies that see opportunities in regenerative agriculture wanted the farmers who would be responsible for delivering it to benefit economically. This was the least sought-after of the six regenerative outcomes identified, trailing soil health, carbon mitigation and sequestration, water cycling, biodiversity, and reduced agrochemical inputs. 

Even if premium pricing is on the table in supermarkets, there is a question of whether this approach can ever truly reach across the whole market. Prepared meals, quick-service restaurants, and catering for example have very little brand equity based on how ingredients are produced, making such premiums based on regenerative, organic, or other farming systems all but impossible. We must remember, Nando’s famously claimed that its customers cared more about price than free-range chicken, and that U.S. restaurants are backtracking on animal welfare and antibiotics practices which undermines positive changes within the supply chain.  

Balancing Supply and Demand-Side Solutions

Groundswell is fundamentally focused on making farms resilient and healthy for the long term, with a wide array of solutions on display from soil microbiome improvers to machinery that enables the integration of more diverse crops and livestock.  

Obtaining and maintaining this resilience could eventually lead to more stable if not lower costs for farmers and less cost volatility for companies. It also offers the benefits of improved natural environment to the wider society. These considerations help justify long-term financial incentives for the farmers delivering this resilience.  

This was complemented by Henry Dimbleby, the author of the UK’s food strategy, who highlighted that around two-thirds of British agricultural land is dedicated to grazing or livestock feed production. Cutting down on meat and dairy will be necessary to reduce the amount of land used in food production, which would free it up for other uses, including restoring biodiversity across the UK. 

Groundswell offers unique visibility on the solutions that are emerging to reconcile agriculture and nature, and the farmers putting them into practice. The risks they are taking in doing so, and their successes are rightly celebrated over two days every year. Corporations, investors, and policymakers should also take note of the key challenges highlighted above and work collaboratively to find ways of baking a financial reward into the value chain for delivering sustainable food production that benefits soil, nature, and the wider community. 

FAIRR insights are written by FAIRR team members and occasionally co-authored with guest contributors. The authors write in their individual capacity and do not necessarily represent the FAIRR view.