Wider Adoption of Regen Ag Could Change How We Assess the Economics of Farming

The usual ways to measure the economics of farming need to be expanded to fully understand the costs and benefits of regenerative agriculture practices in New Zealand, says a new report out today.

The report, Determining the economic and market potential of regenerative agriculture, highlights the need to improve the way we value environmental stewardship, which would provide more balanced economic understanding of all farms in New Zealand.

“We need to broaden the way we value our food production systems,” says one of the report authors, Distinguished Professor Caroline Saunders, director of Lincoln University’s Agricultural Economics Research Unit (AERU). “Economics can help us assess a wider range of value from agriculture, to include its effect on society, culture and the environment.” 

Regenerative farm management systems may have environmental benefits for biodiversity, water quality, and the reduction of greenhouse gas emissions, says the report. Accounting for environmental impacts, both negative and positive, could provide a useful approach for fully measuring the impact of the adoption of regenerative agriculture for New Zealand.

Agricultural businesses in New Zealand have often been criticized for not accounting for the full environmental costs of their products. A report from the Environmental Protection Authority released last week highlights agricultural companies carry the country’s biggest burden of greenhouse gases. In 2014, the costs of the negative environmental impact of the NZ dairy industry were estimated to exceed the 2012 dairy export revenue of NZ$11.6 billion.

The report also highlights the potential for regenerative farmers to access new and emerging financial benefits. These include carbon and biodiversity credits, ‘green finance’ from financial institutions (in which terms are tied to environmental or social goals), and transition finance (through private investment such as Calm the Farm, for example).

“There could be potential to generate a premium, protect market share, or further strengthen New Zealand’s food reputation” 

— Distinguished Professor Caroline Saunders, AERU director, Lincoln University

‘Regen ag’ is a sustainability trend that is likely to move at different paces internationally, says the report, which suggests methods to assess the possible value of regenerative agriculture in different markets. Recent market studies found that about 40% of New Zealand’s potential food customers in California and the UK are aware of regenerative agriculture, and associate ‘regen’-farmed food with reduced environmental impacts and improved animal welfare.

“These qualities have potential to help New Zealand agribusinesses generate more value for our food exports. There could be potential to generate a premium, protect market share, or further strengthen New Zealand’s food reputation,” says Professor Saunders. “The commercial success of regenerative agriculture will depend on the prices that farmers can get for their products, especially overseas.”

The report is one of three new reports out today that provide an overview of how to assess the impact of regenerative agriculture on farm businesses. The reports look at how New Zealand agribusinesses could determine whether the adoption of regenerative agriculture practices might increase the quality or quantity of their produce, or the profitability of their business.

The reports are:

• Determining the economic and market potential of regenerative agriculture (Grelet et al, 2021)
• Quantifying productivity of regenerative farming systems (Schon et al, 2021)
• Determining food quality in the context of regenerative agriculture (Lister, 2021)

The three reports were produced by a research project funded by the Our Land and Water National Science Challenge, the NEXT Foundation and Manaaki Whenua – Landcare Research. The project has so far produced 15 reports providing recommendations for how claims regarding specific possible benefits of regenerative agriculture could be tested in Aotearoa New Zealand.

Measuring farm productivity

The productivity of a farm can be looked at in terms of the quantity of food it produces – for both humans and animals – and the quality of that food. The report Quantifying productivity of regenerative farming systems identifies the priority measurements for assessing productivity on regenerative farms.

On pastoral farm in New Zealand, production is measured as the amount of plant material grown, using tools bench-marked for typical pastures of ryegrass and clover. These tools may not be accurate for the multispecies pastures seen as the hallmark of ‘regenerative’ pastoral farming, says the report, due to different plant heights and traits, and uneven changes from season to season.

The impact of these diverse pastures on animal production is also unknown. Increased plant diversity can improve plant yields and may increase pasture production through drier periods, says the report, but this does not necessarily equate to increased milk production, weight gain or improved food quality.

“Productivity can be considered across more outputs and inputs than are commonly used” 

— Dr Robyn Dynes, strategy leader for agrifood systems, AgResearch

The report authors point out that other ways to view farm productivity might be more important to regenerative farmers. These include nutrient use efficiency, water use efficiency, and greenhouse gas mitigation. Policy changes may also make these increasingly important productivity measurements. 

“Productivity is one measure of efficiency, but it can be considered across more outputs and inputs than are commonly used,” says Dr Robyn Dynes, one of the report authors, and the strategy leader for agrifood systems at AgResearch. “Understanding relative productivity is a powerful tool for managers looking for continuous improvement.”

Measurements of individual farm profitability may also need to go beyond industry standards to measure regenerative practices more effectively, finds the Determining the economic and market potential of regenerative agriculture report. The number of hours worked are a particular concern, due to a perception that some regenerative practices are time-consuming.

Food quality and ‘nutrient density’

The connection between regenerative agriculture and food quality is also explored in a report released today.

“Although direct evidence is limited, there is strong suggestions from the broader scientific literature that there are likely to be impacts of regenerative agriculture on food ‘nutrient density’. However, the extent of this remains to be determined in a New Zealand context,” says Dr Carolyn Lister, principal scientist and science team leader at Plant & Food Research, and author of the report Determining food quality in the context of regenerative agriculture.  

The ‘nutrient density’ concept typically expresses the nutrient content of foods based on a reference amount, such as “mg per 100g” or “%RDA per 100g” but we don’t always eat foods in equal amounts.

“Various nutrient profiling systems have been developed in order to quantify the healthiness of foods and it will be important to consider what may be best to use for regenerative agriculture,” says Dr Lister.

“Numerous factors affect the nutritional quality of crops, and some factors – such as soil health and fertiliser application – may be particularly relevant to regenerative agriculture.”

Health benefits may also come from the diversity of phytochemicals present. There is evidence that soil quality, applied nutrients (particularly nitrogen), and farming system choices affect not just yield and nutritional composition, but also phytochemical composition in reasonably consistent ways. The report notes that phytochemical composition and concentrations vary much more than the core nutrients and are influenced by more than farm management.

“It is likely to be essential to measure a broad range of nutrients and phytochemicals to determine if regenerative agriculture can improve the quality of New Zealand foods and, ultimately, diets,” says Dr Lister.

The report also examines the validity of chlorophyll and Brix as indicators of food quality or nutrient density, since they are commonly used by the regenerative agriculture community. The relationship between chlorophyll and phytochemical concentrations in a plant is unclear, and also highly unlikely, says the report. There is some value in measuring Brix in some crops but this needs further validation, as there is no solid scientific evidence that Brix values alone can be used to describe a food's nutritional value.

“Although direct evidence is limited, there is strong suggestions from the broader scientific literature that there are likely to be impacts of regenerative agriculture on food ‘nutrient density’” 

— Carolyn Lister, science team leader, Plant & Food Research

Register for the webinar series

A webinar to be held on Wednesday 17 November (12–1pm) will discuss these reports and provide an overview of how to assess the impact of regenerative agriculture on farm businesses.

Speakers: Matt Harcombe (Silver Fern Farms), Professor Paul Dalziel (Lincoln University), Dr Robyn Dynes (AgResearch), Dr Carolyn Lister (Plant & Food Research)

EDIT: This webinar has now been held, see video embedded above or on Vimeo here. Register for the final webinar in this series below:

More information:

• The Regenerative Agriculture project was a large collaborative effort across the New Zealand agri-food system over the course of 6 months in 2020 that included representatives of the research community, farming industry bodies, farmers (conventional and ‘regenerative’), consultants, governmental organisations, and entrepreneurs.
• More information about all webinars in the series. Find video of all previous webinars on Vimeo.
• The three reports are:
  • Determining the economic and market potential of regenerative agriculture (Grelet et al, 2021)
  • Quantifying productivity of regenerative farming systems (Schon et al, 2021)
  • Determining food quality in the context of regenerative agriculture (Lister, 2021)
• Note: The reports in this project were prepared simultaneously and independently of each other. Authors did not always have the opportunity to read other reports before submitting their final reports. Some inconsistencies between reports may result.