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Regenerative agriculture has a lot of promise when it comes to improving the way we grow food, rehabilitating our environment, and reconnecting consumers and agriculture. But there’s one piece of the equation that isn’t talked about as often: funding regenerative agriculture.

Asking farmers to adopt new practices sounds like a straightforward proposition but the upfront costs can be a non-starter for some farmers. Just the decision to adopt a cover cropping program on several thousands of acres of corn and soy can come with a hefty price tag in terms of purchasing the seed, new equipment like a no-till drill, and acquiring the educational savvy to do it all right. Cover cropping requires knowing what crops to plant, when to plant them, and when to terminate.

What makes this even more challenging is that many conventional banks and financial programs aren’t well equipped to understand regenerative agriculture. As a result, farmers often struggle to obtain financing to adopt new practices from traditional lenders. At the same time, farmers are some of the best risk managers out there, constantly reacting to unpredictable weather and uncertain future markets. 

In this episode of the podcast, we talk with David LeZaks, a senior fellow at the Croatan Institute, about his work in regenerative agriculture finance. Croatan Institute is an independent, nonprofit research institute whose mission is to harness the power of investment for social good and ecological resilience by working at the critical nexus where sustainability, finance, and economic development intersect.

Fortunately, some investors are taking a more altruistic approach to how they invest their cash. Sometimes referred to as impact investment, more and more investors are only investing money where the project matches a specific set of goals or values like environmental rehabilitation or local food.

A new regenerative ag-dedicated venture capital investment firm called Soilworks recently launched and acquired grazing management software service PastureMap as its first investment, for example. 

David talks about some of his recent work identifying barriers for small and medium-scale livestock producers due to Covid-19 in an effort to identify key pain points where investment is needed. He was also involved in producing the Soil Wealth report, which surveyed the landscape to identify existing investment vehicles for regenerative agriculture and opportunities to expand them.

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Thanks, and enjoy the show!