A conversation with Nathalie Whitaker and Mike Taitoko, co-founders of Toha, which is building a one-of-a-kind global marketplace with climate and environment impact at its heart. Nathalie and Mike are two of the three founders of Toha and Calm the Farm. In the interview they talk about the role of “verifiable data” in regenerative transition and why, instead of carbon, we should focus our attention on water first.
New Zealand’s dairy industry has intensified tremendously over the last 20 years and has to change if it doesn’t want to lose its social licence to operate. Consumers and governments are putting pressure to clean the heavily polluted waterways, restore biodiversity and store a lot of carbon. But how? What role does data play and why should we start with water and not with carbon? Listen to Nathalie and Mike.
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What’s the current state of the dairy industry, and why is it such a perfect storm for regenerative agriculture? Where do investors come into the picture when we talk about regen ag? How does data become really important for farmers? Why should we primarily look into water instead of carbon?
The Crisis Dairy Industry Faces
When Mike had the chance to look into the dairy industry in New Zealand, he found out that the dairy sector is under huge stress because of its high production business model. This resulted in the industry receiving constant attacks from social communities, politicians, and many other angles, causing many farmers to feel dejected and to lose their social license to operate. However, Mike also found out that those dairy farmers who practice regenerative agriculture lead a much happier life and find joy and profitability as they operate. It’s also notable that younger kids started to want to engage in regenerative farming, which is a big deal, as succession in farming has always been a global issue.
“We think it’s a big and important job to help support the role that agriculture must play in addressing the huge climate change and crisis we have on our doorsteps right now.” – Mike Taitoko
Why Water Instead of Carbon
While New Zealand is known to have a “green image”, the country has serious challenges in regard to the quality of its freshwater. Lakes have been rendered unswimmable, which can be attributed mainly to the presence of nitrogen, phosphorus, and other synthetic chemicals that farmers have used for the last 20 years. This is worrisome, especially when a study suggests that there is a 650% increase in synthetic nitrogen use in New Zealand since 1995 and that we can now see the impact this has made in the environment.
Now, what’s great about starting with water, instead of carbon, is that it is not really as hard to get people to cooperate, as water is physical and tangible. We can all easily see how we can get affected if we don’t start taking action.
“We’ve got a huge amount of water bodies and lakes within the country that have real close proximity to a lot of our most intensive agriculture sectors. Dairy is the industry in New Zealand that’s created the biggest challenge, mostly because of the intensification of the dairy sector.” – Mike Taitoko
How “Verifiable Data” Acquire Funds
There are many stories of businesses wanting to transition to a more regenerative means of operation, but they don’t necessarily provide proof or “verifiable data” of their regenerative efforts and outcomes. Hence, in order to gauge if these commitments are actually met, they built Toha, which aims to track the data that would serve as “verifiable proofs” that regenerative activities are truly being practiced in operations. This type of data has become valuable these days because now, there are banks, regulators, consumer brands, grant programs, and others that are willing to fund and monitor these more eco-friendly practices for the sake of regenerative transition.
“The technology is designed to basically attribute the value that’s exchanged when those claims are purchased back to the investors and the farmers who have been working together on the transition.” – Natalie Whitaker
What “Pledges” Actually Look Like
One of the things Toha does is to act as a connector between farmers who want to transition to regenerative agriculture and investors (may be banks, grants, philanthropists, etc.) who want to help with funding the transition. Toha, using their “data”, finds investors and farmers with the same interests, hence makes sure that the investor’s money goes to the right people while the farmers get everything they need. While there is a “pledge”, Toha trusts that the farmers would stay true to their commitment (i.e. reduce the use of chemicals, great rotation rates, diversity of plant, etc.) and produce the results (i.e. quality products, productivity of animals, well-being of the pastures, etc.) that are expected of them.
Natalie noted that it’s very important that our farmers can benefit from this transition, because they’re the ones who can accelerate these scale actions on the ground.
“Because we are treating this pledge as an asset, we’re also able to do a second thing, which is to offer pledge finance. Pledge finances is debt to help accelerate the transition, and it has to be tailored to the individual farmers’ needs.” – Natalie Whitaker
Other Important Points Discussed:
Koen, Mike, and Natalie also talked about:
- how reduction of nitrogen should no longer be considered a loss in productive capacity (thus farmers who get rid of nitrogen should not be penalised, but rewarded);
- how banks should now consider the businesses’ “climate risk” when providing interest rates;
- how regen farmers have become more climate resilient;
- how an individual can personally invest in the regenerative transition;
- market opportunities aside from carbon;
- how farmers can do what many of us can’t;
- how Natalie wishes that everybody should now be open to receiving and more ideas; and
- how Mike hopes we can shorten the supply chain and make economics more friendly.
To know more about Mike Taitoko and Natalie Whitaker and Toha, download and listen to this episode.
Links:
Interviews:
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- Phil Taylor and Brandon Welch, the first investments of Mad Ag’s $10 million fund
- Brad Vanstone on why just being a vegan cheese company isn’t enough to have a big impact
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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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