An interview with Geoff Burke, co-founder of Agro-Ecological, a New Zealand based impact investment manager and advisory firm focused on farmland, on how to increase the impact investing in regenerative agriculture in New Zealand.
LISTEN TO THE CONVERSATION ON:
We also recorded our conversation as a video with some background slides. Please have a look and let us know what you think!
MAIN TOPICS:
- One of the things holding the agro ecological transition back is the myth that regenerative agriculture is less profitable. And that is wrong especially in New Zealand. You are able to run leaner and have more resilient returns
- Organic is important, independently audited and gives the consumers some comfort and drives the premium. It has been successful for 20/30 years
- We should focus on profit per acre instead of yields of acre
- If you only substitute your non organic inputs with organic inputs you are destined to fail
- You need to completely redesign your management system
- There is a lot of water quality regulation coming in New Zealand
- Farmers are asking themselves how to farm and have the social licences from their community to keep farming
- New Zealand has an amazing climate, on most farms animals can be outside all year round
- Agriculture is a key industry and most of is for export
- Measuring biodiversity, water quality, science has to catch up, carbon is starting to become a thing
- 1 billion tree program, silvo-pasture is becoming more interesting
Organic Kiwis - Why are organic kiwis interesting? Market is booming
- Kiwis need ‘winter chilling’, in the current kiwi region there isn’t enough winter chilling and producers use a chemical to ‘fake’ the winter, this isn’t allowed in organic production
- The region that Geoff has identified has strong winters and warm summers, perfect for organic kiwi production, potentially reaching similar production levels as non organic kiwis, with much lower input costs
- It isn’t easy to deploy big quantities of (institutional) investment capital
Organic regenerative dairy
- Dairy is a major industry but created huge environmental issues, mostly on water quality, run off etc.
- Regulation is becoming much stricter and forcing the intensive farms to change
- Geoff is focussed on one water catchment, to improve the water quality
- In a few years the pasture will be much more diverse, going from 1 or 2 types to 15-20 types
- You will see a lot more trees on the farms, nuts, for fodder, wood
- Planting medicinal plants so cows can self medicate
- Different breed of cows, more robust, resilient
- Big farms by definition have to focus on the export
- There is interest in more vertical integration but not too much is happening yet, just around tourist destinations and larger cities, but mostly for smaller operations
- For this investment approach Geoff is targeting institutional investors
If Geoff could change one thing overnight, it would be increasing dramatically the amount of capital deployed in regenerative agriculture.
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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.
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