Brentwood, N.Y.: Farmers tend the crops at Thera Farms in Brentwood, New York on June 15, 2023.. The … [+]
Farming and nature often seem like natural bedfellows. After all, what is good for the soil is good for the planet, but despite growing consumer demand for more environmentally friendly products, are farmers in the U.S. lagging behind when it comes to adopting sustainable practices?
According to new research released by McKinsey, while 90% of U.S. farmers have an understanding of sustainable farming, the uptake of such practices remains low.
And even where farmers are adopting sustainable practices, they are only implementing them on a small share of their acreage, typically less than 30%.
The survey of nearly 500 farmers also found while three quarters (74%) had heard of on-farm renewable energy, only 13% have adopted it and only 7% are planning to adopt it in the next two years.
Furthermore, 16% of farmers said they had not heard of biologicals, and 46% had not heard of biochar as a fertilizer.
McKinsey partner Vasanth Ganesan said in an interview said the research found there are three main issues behind the low take-up of sustainability practices.
Ganesan told me the main issue is that farmers need more operational support when it comes to actually implementing sustainability practices.
In particular, he said farmers need more support around go about financing any changes and working out how it will impact yields and operating costs over time.
Ganesan added the other two reasons are closely related.
One is around obtaining a market premium for their products, especially when 70% of the crops grown in the U.S. are corn and soybean and their end use and value varies across food, fuel and feed.
And the final issue is around how farmers can create additional revenue from any assets that are by-products from adopting sustainable farming practices.
The report also finds that adoption of practices is correlated with perceived return on investment (ROI), and practices with the highest perceived ROI, such as applying fertilizer based on soil sampling, have the highest rates of adoption.
Ganesan said the sustainable farming practices that are being adopted include reduced or no-till farming, which is an agricultural technique for growing crops or pasture without disturbing the soil through digging, stirring or overturning – also known as tillage.
Other practices that have been taken up including using variable rate fertilizer and controlled irrigation practices.
In terms of encouraging more farmers to make the change, Ganesan added transition financing remains a big topic, along with estimating any perceived risk of yield impact and its effect on operating costs.
“We do need to have more products and programmes that can help farmers do this more effectively,” he told me.
“And agriculture companies especially in the value chain can help do that.”
Last month, the Colorado-based finance firm Mad Capital launched a new fund to help U.S. farmers transition to regenerative organic agriculture methods.
Mad Capital’s co-founder and chief executive Brandon Welch said in an email to incentivize widespread adoption, there needs to be more robust financial data surrounding the adoption of regenerative practices.
“The challenge is that farmers want to know if it will work on their particular farmland,” said Welch.
“Individual farmers are taking the risk, and they want to be confident that they aren’t ‘betting the farm’ but have a high likelihood of success if they adopt new practices.”
Christina Skonberg, director of sustainability and mission at the food brand Simple Mills, said in an email, agricultural policies in the US are often incongruent with the goals of sustainable agriculture.
For example, Skonberg added it is well established that maximizing crop diversity can yield beneficial environmental outcomes on a farm.
“Government financial support for farmers in the case of crop failure due to issues like weather and pests is strong for a narrow set of crops that already dominate our food system,” she said.
“But it is lacking for crops that could help add more diversity and therefore ecological resilience to farm operations—like sunflower and buckwheat.”
Looking further afield, European climate tech firm HeavyFinance recently signed 300,000 hectares of farmland in western and central Ukraine to its carbon farming programme, for a shift over to regenerative agriculture.
HeavyFinance’s co-founder and chief executive, Laimonas Noreika said in an email awareness about the benefits of sustainable agriculture among farmers is high, however, in both Europe and the U.S. small and medium-sized farm owners face major obstacles in obtaining loans.
Consequently, Noreika added farmers declaring up to 200 hectares of arable land switch to reduced-till or no-till at a much slower pace than their peers working larger fields, due to limited access to financing to purchase equipment.