An interview with Kelly Price, CEO and co-founder of Agreed Earth, discussing why we should focus on nitrogen as a gateway for regenerative practises. We also talk about the role of banks offering a great way to finance the transition as they are on the hook for the potentially bad credit of their farmers and the regular pressure to report on greenhouse gases.
LISTEN TO THE CONVERSATION ON:
Nitrogen is an extremely potent greenhouse gas, so how do we work with farmers to implement regenerative practices and reduce their reliance on chemical fertilisers? Why should we focus on nitrogen as a gateway for regenerative practices? How can we use nitrogen to get banks to invest in farmers’ transition to regen ag?
The Mission-Driven Agreed
Agreed is on a mission to speed up the transition to regenerative agriculture. As a mission-driven company, they want to build solutions that won’t further cause any downstream effect and, more importantly, would be beneficial for all. One of the primary areas Agreed is passionate about is farmers, who play a huge role in the push for regeneration. Farmers are trapped in a system that pushes them to produce cheap products, leaving no room for taking risks and starting new farming practices. Agreed wishes to address this pressing issue.
“We really want to help them [farmers] stay in business sustainably, both financially and ecologically.” – Kelly Price
What Farmers Need
Agreed identified two barriers that are keeping farmers from transitioning to regenerative agriculture: informational and financial barriers. Strategies may be hard to adapt as practices are very land-specific, which means that a strategy that works for one farmer may not work for another. One more thing is finance. As profit can be hard for farmers due to low food prices, many rely on subsidiaries in case farming-related issues arise. This results in farmers becoming tied to their old practices, as they don’t really have the support they need to de-risk in case of transition.
“It needs to be a very customised and adaptive approach as you go. Regen is a journey, not a destination.” – Kelly Price
Nitrogen Is Key
Agreed believes that nitrogen reduction is key to solving the issues farmers face. It’s because nitrogen has become three times more expensive to use, it’s very expensive to make (consumes 2% of the world’s energy, leaving so much carbon footprint), and it’s not healthy for the environment. When nitrogen fertiliser is used, only about 60% of it actually goes to plants. While this 60% significantly helps with the yields, the rest becomes a “runoff,” which essentially pollutes the rivers, not to mention that the use of these chemical fertilisers actually destroys the soil’s natural health, which may need rehabilitation later on.
“We realised that nitrogen actually was the key to everything. It was the starting point of the journey, because the price of nitrogen fertilizer last year alone rose about 300%, which is just huge.” – Kelly Price
Nitrogen Vs. Carbon
Agreed works with organisations that work closely with farmers, and that’s how they thought of working with banks. Banks are especially relevant in this space as banks now have a statutory obligation to report on the carbon footprint. This is where the role of nitrogen reduction that Agreed proposes comes into play. As nitrogen is way easier to quantify and track compared to carbon, it can become an edge to attract banks to invest because farmers reducing chemical use are expected to be more financially resilient (minimised use of expensive nitrogen oxide) and ecologically resilient (more reliant on the soil’s natural fertility).
“What we realised was the opportunity to help them access finance, that would de-risk that transition for them.” – Kelly Price
Other Points Discussed
Koen and Kelly also talked about:
- Outcome-based environmentally focused schemes;
- Financing cover crop mix;
- Lower cost loan for farmers;
- Connecting farmers to other farmers who are doing regen practices;
- Always start with the problem in entrepreneurship;
- Focusing on externalities, as they are a huge driver of the problem.
To know more about Kelly Price and Agreed, download and listen to this episode.
LINKS:
- Agreed.earth
- Groundswell Conference
- Winnow company
- Carbon 13 venture builder
- Elms subsidy scheme in the UK
- Wildfarmed
- Root Zero potatoes
- Agreena
- Mark Carney former governor Bank of England
- Fertilizer is a Problem to be Solved – Paul Lightfoot Substack
- Dirt to Soil by Gabe Brown book
- English Pastoral by James Rebanks book
- Farm to Fork by Joe Stanley book
- Wilding by Isabella Tree book
- The Soil Will Save Us by Kristin Olson book
- Kiss the Ground documentary
LINKED INTERVIEWS:
- Isabella Tree – Rewilding a 3,500 acre British farm that was never profitable before
- Robyn O’Brien – What kind of systems thinking is necessary to design investment products?
- Jeroen Klompe on building a fair farmers first marketplace
- Phil Taylor and Brandon Welch, the first investments of Mad Ag’s $10 million fund
- New Foundation Farms series
- Jonathan Lundgren – Regenerative agriculture much more profitable than extractive ag?!
- Elizabeth Whitlow on how to change the ag world with the gold standard of regen certification
- Paul Lightfoot on how carbon negative foods are taking off and why now
- Ichsani Wheeler and Tom Hengl – Everyone has the right and the data to know what is happening on our planet
——————————————
Feedback, comments, suggestions? Reach me via Twitter @KoenvanSeijen, in the comments below or through Get in Touch on this website.
Join the Investing in Regenerative Agriculture and Food 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.