Koen van Seijen is the host of the Investing in Regenerative Agriculture Podcast, where he talks to pioneers in the regenerative food and agriculture space about putting money to work to regenerate the soil. Today, Koen joins Ross and Christophe to discuss the many different flavors of financing for regenerative agriculture and explain the distinction between investing in regenerative agriculture and what is sometimes called "regenerative financing" which innovates in terms of deal structure and beyond.
Full Transcript
Ross Kenyon: Hey everyone, welcome to season two of Reversing Climate Change. We are doing that podcast thing now and launching a Patreon. You can find it at patreon.com slash noripodcasts. There are various tiers with different types of goodies available. Do you want to receive a special newsletter digest of what norinauts are reading that week? Be a part of a nori book club? Get special access to nori events? Go take a look at patreon.com slash noripodcasts for what we’re offering. And in that spirit of being lean in that startup kind of way that, you know, we like to do, this list of goodies is subject to change and we’d very much like your feedback.
Is there something that you’d really like to see but it isn’t listed here? Honest feedback does a lot to help us shape what we offer to you. You can send an email to podcast. nori.com or fill out our podcast survey anonymously in our newsletter which you can find at nori.com slash subscribe. And thank you so much for listening to another season of Reversing Climate Change. Hello and welcome to the Reversing Climate Change podcast. I’m Ross Kenyon. I have my Nori colleague here, Christophe Jospe. We’re here to talk about investing in regenerative agriculture and regenerative investment in general.
We’ve been meaning to do this for a while, Christophe, so thanks for the nudge to get this set up.
Christophe Jospe: Yeah, fun to be on here. We’re really excited to have Kun Vansayan, also a fellow podcaster. I quite enjoy the Investing in Regenerative Agriculture podcast that he puts out. I think it’s a great opportunity to explore a lot of the deeper themes that we think deeply about. And always nice to have a fellow traveler on the air. So welcome, Kun.
Koen van Seijen: Thank you so much. And it’s always great. It doesn’t happen too often yet, but to be on other podcasts, it’s really, really nice to see the other side and obviously be with fellow podcasters and fellow Regen Ag enthusiasts.
Ross Kenyon: We’ve been on a bunch of other ones and there’s been some crossover episodes and by the time this comes out, we’ll have released another crossover episode. But yeah, I guess everyone has their own little spheres of influence, I guess you could say, and they mostly keep to it.
Christophe Jospe: I mean, I guess so. I want to start this out. It’s interesting because your day job was working for a really cool company. And then something inspired you to start your own podcast and work more on that and less for the really cool company. So I’m curious about your motivations, Kun. Why now? Why the podcast? And what were you doing before starting the podcast?
Koen van Seijen: Yeah, sure. So I have been active in the impact investing space for quite a while, actually. And I used to work at a fund called Aquaspark based in Utrecht in the Netherlands, which focuses on sustainable aquaculture. So everything having to deal with fish farming. I’ve seen the first insect factories where they were growing fish feed in a different way. Algae, et cetera. And I got caught by the impact investing bug. And I really got very interested in how to put money to work in this case, in the food system. And for me, the food system was a lot broader than just fish.
And I joined Tonic, which is a nonprofit which works with a lot of impact investors that are trying to put their money to work to hit impact goals and to get a return. So it could be anything from solar panels to ad tech to gender lens information. Investing, the whole, everything you can put a positive impact label on. And obviously there’s a lot of discussion of what is impact, how do you measure it, et cetera. And I saw a lot of interest in food and ag and I’ve been always very, very interested in food as a food person.
I love good food. And in 2011, I discovered soil and discovered The amazing connection between what we eat and how that’s actually being grown and the potential of agriculture to be a positive part of the solution instead of just be a less negative one, just a bit cleaner, a bit more sustainable. So the journey into regenerative food and egg really started in 2011. I had a lot of conversations with people that were setting up funds, investing in it, entrepreneurial farmers, people really trying to scale this beyond their own farm. And in 2016, I decided to launch a podcast or I decided to record the conversations.
I didn’t know it would turn into a podcast. So I had something to share with the investors I was working with or I am working with and I saw the interest in food and I had a really good reason to spend an hour or so on Zoom or actually it didn’t exist, but on On Skype with people that were building something interesting. So it was a good excuse because most people, as you know as well, say yes when you would like to interview them and they love to share what they’re working on.
So it was a really good reason, even without any listeners, to spend an hour or so with somebody that was building something interesting on soil. And then at the end of that hour, I had actually something to share with the investors, with entrepreneurial farmers that I was talking to. Like, look, other people are out there. They’re building things. There might be ways to invest or to put money to work at some point. And that got a bit out of control. We’re now in 2020 and it became a lot bigger than a podcast a month or something like that, which was at the beginning.
Ross Kenyon: Kuhn, how much of regenerative finance, regenerative investing is the recipient of investment? So investing in things that are better versus changing the form of how investments work. I’ve seen both. I think they’re both lumped under regenerative investing. But are these investments typically structured in ways different from conventional finance? Or is it just applied on to more regenerative farming, seekers of investment, that sort of thing?
Koen van Seijen: Yeah, I think it really depends is the easy answer there. And I think that the discussion on regeneration in general and regeneration of an economy and not making it just a bit more sustainable as we’ve talked about in terms of language and Stories for the last 20, 30 years, maybe 40, 50 in some cases, that discussion is still not, we’re still not having that to the full extent of what that actually means. It’s still very often, unfortunately, I’m investing in a regenerative food company or a regenerative farm. But I’m using traditional terms, which we could argue is probably not regenerative.
So there are luckily some very interesting examples on ownership structure, steward ownership, obviously skin in the game, funds that are profit sharing instead of taking a fixed loan. So I see some experimentation, but compared to the normal way or the way we’ve always done it is either equity or debt. And that’s pretty much it. It’s still most of it is still that. So I wouldn’t be calling it regenerative investing. It might be investing in regenerative food or agriculture. But I think the fundamental discussion on what does that actually mean is something we still don’t have enough and something obviously I try to push for, but it’s very, very difficult sometimes.
Christophe Jospe: So you’re in a pretty interesting vantage point because you’re familiar with many different flavors of capital and understanding that this isn’t just bottom line, maybe double or triple bottom line or trying to find additional impact beyond the funding.
Koen van Seijen: And oftentimes when we’re out there, we’re talking to I mean, If you boil it down, most investments should be transition finance or should get something to another state. I think in regenerative agriculture, at least, obviously regenerative agriculture isn’t a sort of final state, like if you get If you get to that level of soil organic matter, then you’re done. It’s much more of a journey and you see people taking it way further than we thought was possible a couple of years ago. In terms of what I’ve seen in the, let’s say the regenerative agriculture and Transition finance usually applies to farmers that want to go from one point to another and want to, for instance, go to organic or beyond organic and want to get started with cover cropping.
And so the finance there helps them through that process. And then it’s done. It’s not an equity play where you buy something, you buy a stake in a company or a stake in a farm, you buy a piece of land and you have to exit through that. And the interesting piece in transition finance is you partner, if done right, with the farmer on that journey, which could be 10 years, 15 years, five years, two years, really depends obviously where the farmer is. And basically the finance helps that transition to happen.
There’s... There’s some experimentation. There’s not too much. I think we’re going to see a lot more. In the food side of things, there’s more because I think the investments in food companies have happened for a lot longer. Food startups, innovative bar companies, etc. And there it’s usually, I don’t think they will call it transition finance. It’s usually growth finance, etc. But at the end of the day, it is a transition. What we’ve been focusing on mostly in the podcast has been transition finance for farmers and with farmers. So what are ways to put money to work where the investor and the farmer are on the same side of the table and not on opposite sides and basically having a tug of war?
And how do you do that in a way that also grows soil as fast as possible? So we really have been focusing on the farmer piece. Which isn’t easy, but definitely very, very interesting. How do you partner with farmers to help them through the transition, which can be very, very interesting from an investment point of view and very interesting, obviously, from an ecology and a farmer point of view.
Christophe Jospe: And so just to zoom in on just the United States alone, I think it’s worth noting that farmers are in, what is it, half a trillion dollars worth of debt. So already debt financing is pretty huge in the economy that we both think a lot about. And you’re bringing up different forms of transition finance, but what are the different types? So you’re saying this isn’t debt, this isn’t equity. Can you talk us through the mechanics of some of these flavors of financing and how they work?
Koen van Seijen: Yeah, I think it’s important to notice we’re very early in transition finance for regenerative farming. You see the first organic transition finance loans coming out now. And that’s after like large scale. You see Rabobank Finance or Rabobank Finance now coming out with an organic product to help farmers through that three-year transition, which is a transition which... We’ve done many, many times and there’s a lot of data backing it up and there’s a ready market, etc. So just to give you an understanding how long it takes for the financial sector, in some cases to come up with products that serve, in this case, farmers.
It’s going to be a while before you can go as a farmer to your local bank and say, I want to transition finance product because I want to speed up my regenerative transition. But having said that, I see at least quite some experiments and you are involved actually with quite a few of them. For sure, the perennial fund is very interesting, carbon yield, and there are some others. And I think what are the interesting points there are flexibility and timing. Flexibility as that the product has to, as farming is very uncertain.
It seems to be key that the product moves either up and down with the farmer or like I said, the investor or the lender is on the side with the farmer. So if there’s a bad year, it doesn’t wipe out the whole farm and basically forces land to be sold, et cetera, so Flexibility and longer timeframes. Like you cannot have a two-year loan or two-year finance product to do a regenerative transition. A regenerative transition takes time. And so we as investors or the whole finance sector, we need to get our heads around it.
You need to partner with So I think flexibility and timing are the ones we see in a lot of these experiments, but it’s very early to say how... How big things are going to get? The perennial fund is raising 5 million just to give the, and then there’s a big question which you raised as well. Do we need more debt for farmers? Probably we need more appropriate transition finance, but we don’t want to put more debt on the balance sheet of farmers.
Christophe Jospe: Yeah, thanks for that answer. So I want you to keep going on the flavors of capital and the different sorts of funding. I mean, one previous podcast guest we had on was Woody Tash, and we talked about this concept of blended finance, you know, where maybe there’s even philanthropic capital coming in, or maybe there are bonds or green bonds or corporate crowd lending. Do you see these things playing a larger role in the transition finance space we’re all working in?
Koen van Seijen: Yeah, absolutely. I think I wouldn’t say the holy grail will be green bonds. But if you see how traditionally farmers have been financed, it’s often through local banks. And these local banks have raised capital through bonds because that’s how many raise capital. Some people see it as a sort of end game, like the moment you can go to almost any local bank, agriculture lender and present a regenerative transition plan and get cheaper finance because it’s less risky, then we have done our job basically. And if those Local banks can get those cheaper capital.
It means that they can get green. They can issue green bonds. They can issue transition bonds. They can issue whatever we’re going to call that. And that’s where a lot of money is at the moment. We’re not there yet. We don’t have the track record and local banks don’t have the ability to attract I think in terms of how do we get there, blended capital is going to be a huge driver. Philanthropy, obviously... is limited in how much there is, but as we’re still so small, and as there are still only a few experiments, I think they’re going to be absolutely crucial to provide first losses, to provide some kind of cushion for the first few brave investors that they are To invest in a flexible, open-ended, skin in the game, profit sharing, transition finance fund.
These are scary things and philanthropy can really help to unlock a lot of those. And then you get this blended, like it’s partly profit and partly research as well. So I think philanthropy is going to be crucial. Corporates are absolutely crucial. I think more, maybe less on the access to finance or access to capital, but access to market. Like if they can in their supply chain offer an offtake agreement to buy the produce during the transition and after for a guaranteed price, probably hopefully a premium, but even a guaranteed price for a number of years can really, really change the game.
So access to markets is something they can provide and they can also be the one that buy the ecosystem services, for instance, through a platform like Nori to basically help the farmers to speed up even further. I don’t know if they will be investing, investing in their farmers, in their supply chain. That really, I think, depends on the corporate. Crowdlending, I think, is something we’ve seen a lot in other places like real estate, renewable energy as well. And I’m guessing, I see a few platforms now, but I’m guessing we’re going to see a lot of that also in regenerative agriculture as you can get your local community and stakeholders involved and people can put maybe $1,000 or $10,000 or $5,000 or euros to work To get a local farmer they actually know through the transition and might get an interesting return, either cash or an interesting return in food.
So I think we’re going to see a lot of platforms popping up to help a lot of farmers. And I think many farmers at the end of the day will choose a mix of those to get going and maybe another mix to speed up, et cetera.
Ross Kenyon: Where do you see ecosystem service payments playing a role inside of the regenerative economy? Is this something that farmers should expect to see more of? Or is this fraught with its own peril and they should maybe be looking towards some of the things that you’re naming above? Or is it just all of the above?
Christophe Jospe: Ross, are you saying, talk us out of why we shouldn’t build Nori?
Ross Kenyon: I always like asking that question. I hope listeners see that as us trying to grapple with these issues, honestly.
Koen van Seijen: No, sure. I think it’s going to play a very important role. I think it’s very difficult to estimate now at the moment how much and how fast I think it’s going to come as more and more people wake up the potential of Storing Carbon in Soil and it’s probably the cheapest place we have to put it right now, plus all the other extra impacts that come from that. So the more people wake up to that, and I think every day people find different videos of you guys, but also other partners and More people read certain books, more people discover certain podcasts.
So that’s just going to increase from both the corporate and the private side. How much of a marketplace that will be in a year or this year, that I think is very, very difficult to predict. So I think it’s going to... Maybe water is going to be faster than carbon. Maybe biodiversity will be in certain regions. I think we’re going to see, again, a lot of experimentation. And in five years, we’ll look back and like, wow, we really made a lot of huge steps. But it could also take three years or so.
So for really to break through, because a lot of things have to be figured out in terms of measurement, in terms of models, in terms of payments, double payments, etc. But I have no doubt that in a couple of years, this is a normal part of a transition of a farmer or farmers in a larger ecosystem.
Christophe Jospe: So Kun, we share your optimism and a lot of what you’re talking about is forward-looking. We’re talking about things that can happen in the future and we need to basically put in the steps so that we can get there. But I just want to put a pin in the bubble we’re creating here that not everything is rosy and maybe there have been some missteps in some of these forms of finance. And so I’m wondering, can you speak to any anecdotes where things haven’t gone the way as expected?
Koen van Seijen: Yeah, I think we need to be extremely careful when, as investors or the finance space, to approach farmers because they have been lied to by many, many people in the past that promised them markets for certain things, that promised them finance for certain things, and many cases that didn’t happen. So what you see very often is probably some hesitation to get involved, like why would it be different this time? So I think us as a sector... We need to be very careful to not promise the moon and the stars and not deliver.
And because that has been done many, many times in the past, and every time that happens, we lose basically a generation of farmers or we lose the trust of a generation of farmers, which means it sets us back. And we don’t have the time. I mean, if we had 100 years, I wouldn’t be too worried because at the end, the economics of farming this way makes so much sense that most farmers will either transition or the land will transition to someone else. But we don’t have 100 years. We have five, 10, maybe 15.
So we need all hands on deck and really speed this up. But at the same time, we need to build trust with a community that has had a lot of not trustworthy people in the past, tried to sell them certain things. So I think there’s a huge job to do for us to do that right. And at the same time, go as fast as possible. And I tried to do that Partly with the podcast to really focus on the entrepreneurial farmers to people working in the space all the way from the small scale permaculture to large scale designers that are taking on all landscapes to open up at least their thinking on finance.
That it’s not all, it’s a tool. It’s a tool that we have to use, that I think we have to use to scale up, but we have to use really right, which means we have to learn about it. We have to learn the evil sides of finance. We have to learn the good sides and we have to figure out how to use it in a way. But you cannot deny that probably we need money to speed up this transition. And I think that’s for all of us to act super enthusiastic about soil, to also learn about finance and investing.
What does it mean? The language, the pitfalls, the risks, et cetera.
Ross Kenyon: Hey, sorry to interrupt. We’ve never done this before, but this is a mid-roll ad for our friends at Etitude. You may remember them from a bonus episode we did not too long ago where we talked with their founders, Kat and Phoebe, about the technology they use to turn bamboo, which is woody and rather hard, into bedding that is quite soft. It’s a cool show and always fun to peek inside of a business that is working at the intersection of what is good for the planet and what consumers actually want. Nori aspires to this as well.
And like any business, both Etitude and Nori need money coming in. So hence, this adds existence. If you’d like to try Etitude’s very nice bedding, and I also hear they make loungewear if that’s your thing, you can go to Etitude.com, E-T, And now back to the show. Kenyon, I really liked your comments about not losing a generation of farmers. We care a lot about soil. We think the potential to play a big role in Reversing Climate Change is there, but we also tend to be very conservative. Whenever articles come out that oversell soil, we’re always like, I understand that this is getting clicks for you, but if you over-promise and under-deliver on some of this stuff, it’s going to be bad for the entire thing.
Koen van Seijen: And we will, yeah. It’s getting a buzz, yeah.
Ross Kenyon: Yeah. And that’s the risk of just, I don’t even know how media is monetized these days. But also I think climate change stuff, there’s a tendency towards boosterism that gets a little overheated sometimes. And everyone has their preferred solution that they like talking about how that’s like the one, it’s the golden ticket out of this thing. We’re always just like, okay, all of the above. We need all of it. Be conservative in what you’re saying. We’re trying our best, which is, it makes it hard to market in some ways too.
Like it would be easier to market if we were Less restrained. Do you agree with that, Kristoff?
Christophe Jospe: I’m just laughing because yeah, the boosterism or the sort of scarcity mindset that exists within the carbon removal or carbon dioxide removal space is kind of astounding. I mean, soil was going to be included as a Mitigation strategy under the Kyoto Protocol and the forest lobby basically blocked them. They said, no, we should only plant trees. And so, I think there is some lingering of this is the most important thing to do first when in fact, it’s all of the above and we all benefit as a globe if we think in that abundance mindset.
So, I’m agreeing with you, Ross.
Ross Kenyon: Have you seen a lot of this too? People getting a little too excited sometimes, maybe threatening the long-term success of soil?
Koen van Seijen: Oh, absolutely. I think people, you see the articles, I mean, the ones you’re referring to of this changes everything overnight, tomorrow we’re done, this is our ticket out of this mess. And that, I think, greatly underestimates the job to be done. And changing agriculture, which is something, which is such a big beast. If you look at as a sector and it’s interconnected with so many other things that anybody that says that it’s easy, why aren’t all farmers changing? Probably usually my answer or my question is without sounding annoying is like, when is the last time you talked to a farmer and really listened to what he or she had to say?
And you will figure out that yes, it’s possible. But it’s not easy and it’s very complex and it’s connected to many other things and people are very indebted or part of systems that we all have designed and we’re all part of. So to say it’s easy, no. To say that there’s an enormous opportunity, absolutely yes. But I always get a bit scared when people present this as something that obviously needs to be done, but it’s also sort of easy. If only all farmers tomorrow started planting cover crops, we’ll be fine.
And I think it greatly underestimates the huge transition And mainly actually between our ears of what is in our heads, what is possible with agriculture? What if it was actually profitable? Like what if it was actually creating a stabilizing climate? Those things probably are possible, but we need to really... Dive deep into it to do the research. And we’re really scratching the surface. We’re such at an early stage that we have no clue. And overpromising, I agree, probably leads to accidents. And it’s going to happen because it’s blowing up if you look at the amount of search results for soil, et cetera.
And it’s going to be, yeah, it’s going to be us in the weeds probably building these things with very entrepreneurial farmers who are actually at the end of the day doing it. And they need all the support they can get.
Christophe Jospe: I want to take us on a little tangent because you talked about going into the weeds and are hinting at things in agriculture where actually this concept you brought up, which is interconnectedness and seeing how related everything is a quote from John Muir. When we try to pick out anything by itself, we find it hitched to everything else in the universe. And I was on a Zoom conversation last night and sort of had the white male check my privilege and thinking about where my food comes from and understanding that... And nutritious food is a privilege that I’ve always enjoyed, but isn’t the same privilege that people from other socioeconomic backgrounds have even afforded.
And so, well, you know, Nori’s coming at this from a carbon lens, you’re coming at investing in regenerative agriculture. There are all these other really complex systems that somehow all interrelate. Can you take us out of the weeds and try to make some sense of this for us?
Koen van Seijen: I actually think the nutrition angle you mentioned is extremely interesting because at the end of the day, We might care a lot about climate and care a lot about soil because we see the potential, but the average consumer doesn’t simply and starts to care more and more, but it’s a very complex story. And I think one of the keys to get a much bigger consumer demand than organic, for instance, which is by no means regenerative, could be, but by no means is, to get a much bigger consumer demand, I think the nutrient angle, so the nutrient density and the food as medicine discussion, does healthy soil lead to healthy produce and lead to healthy gut systems and thus to healthy people?
And obviously our interest to healthy ecosystems as well. That discussion, I think, in the next years is going to drive a lot of demand because you see there’s a lot of research coming out and there will actually be a place to also put a lot of grant funding into that research. Because if we can make it tangible for you and me, for somebody with children, that this tomato that has been grown completely different than the organic tomato in the supermarket or completely different than any other tomato is actually much closer to a medicine than to food.
Then I think we’ll have a very different, we’ll get out of the weeds because then everybody is interested and then there will be very few people that, of course, we need to have a discussion on price and accessibility, but then you suddenly get into healthcare, you suddenly get into whole different rooms where we spend a lot of money, which probably leads back to how we farm the food we eat. And I think that could be one of the keys next to transition finance and all the other stuff to really lead a lot of Cynically, large companies who use a lot of monoculture crops or sugar in their products would fight this.
Unknown speaker: Are you seeing that trend shifting?
Koen van Seijen: Yeah, I think companies that spend most of their money on marketing will be caught in this transition. I think also there, there’s a transition. I think a few companies are trying, Danone, General Mills, etc. I mean, the jury is out if that’s going to work or not. I think they’re going to have a lot of, they in general, as big companies are going to have a lot of smaller ones that... Don’t have the legacy supply chain or supply web as some people call it, but just can go straight and figure it out to the freshness and seasonality and regional food are going to get a whole new meaning if you can measure nutrient density on the spot and if you can show that connection.
And then I think... You don’t need a global, for many things, you won’t need a global supply chain. It doesn’t make too much sense to ship it all around the world if it’s losing all its nutrients on the way. So I think a lot of the small companies and new companies, startups, food companies, et cetera, are going to have a good shot there because they can show that they can get you with a lot more nutrients than some of the bigger ones in the supermarket. But it’s going to be a very difficult battle.
We’re going to find out that a lot of the food we eat we thought was full of nutrients, and it’s actually not. And that might be painful, and there will be a lot of doubt campaigns, obviously, as we’ve seen in fossil fuels and tobacco, etc. , around this, just as you see. And chemical input companies, they’re going to try to get as much doubt into the system as possible just to delay. And yeah, we have to be ready for that. And we can probably look at the playbook of tobacco and renewable or fossil fuels just to see what’s coming.
And this sector is big and there’s a lot of money currently made away from the farm, which is going to try to protect that.
Ross Kenyon: This is a bit of a basic question, but I’m not sure that we’ve addressed it in a very long time. But why might food grown in a regenerative fashion? And by the way, what is that exactly? I guess we haven’t really dug into that. Why would food grown in a regenerative fashion be more nutritious? Or what are the claims there? I’m curious if and how this has been measured. To what degree is this accepted by food scientists? Give us a nice baseline, Kuhn.
Koen van Seijen: Yeah, sure. So again, we’re early here. There’s very interesting research being done by the Bionutrient Food Association, by Dan Kittredge and some others there. There’s very interesting research being done by Teak Origin and Greg Shoemaker. And they, plus Jill Klepperton, actually, who have been in this for, I think, plus 20 years. So they are all... How do you say? We’re early, but at the same time, we have seen very interesting results on zinc, for instance, in certain crops that just because of change of management, and in this case, cover crops, more complex rotations, the basic regenerative agriculture practices, which are your ground should always be covered.
You should either do no-till or very, very little. We need to have complex rotations in time and place, meaning you don’t have monoculture. You always sow at least a few crops at the same time and then either you separate them or you figure out a way to sell them together. Plus over time, like years after year, you never have the same crop just to keep it complex. And at some place, many people integrate animals. So those are the forming pieces. What we’ve seen... And again, I think in two, three years, we’ll look back and we’ll see a lot more data and a lot more published papers, etc.
But we’ve seen early signs of significant differences in crops that have been grown, let’s say, in healthy soils, full of life, basically. There could be tomatoes. Those could be carrots, could be actually eggs coming from chickens that come from different systems, could be certain citrus fruits, could be apples, etc. Where actually olive oil here in Cyprus, in Europe, we’ve seen some farmers basically getting the beneficial pieces. So we’ve seen some interesting examples, but I wouldn’t say a huge scientific body yet on the connection between healthy soil and the nutrients in the food and not just 10, 20% difference, but significantly more, obviously depending on the crop, the time, et cetera.
And that opens a whole new discussion on, okay, if I can have the same crop, But just a different management and I can get two or three times the amount of zinc. What does it actually mean in terms of what is possible and how empty have been our crops and how full could they be if we measured it more? And I think one of the keys here is measurement, not in the lab, but on the farm. So how do you democratize this, meaning that farmers can actually measure the nutrient density of their crops during the season and can adapt their Their management on that and can actually adapt during it instead of sending it to a lab, which obviously loses some of the nutrients as it’s being sent to the lab and which is, by the way, very expensive.
So I think there’s some movements there on these tools, which probably, plus a certain software, obviously, which probably makes this much more accessible for the normal farmer to start measuring and start adapting and start hopefully being paid for nutrients per acre, per hectare instead of yield. Sorry, there wasn’t a lot of information.
Christophe Jospe: No, that was great. And that sets up the next question I want to ask really well. You also mentioned another Reversing Climate Change podcast alumnus, which is Dan Kittredge. And we should link to that in the show notes because he was able to talk about his work with the Bionutrient Food Association. I’m really glad you mentioned Jill Clapperton. Actually, she’s involved with a program called the Farmed Smart Program that Nori is basically... Helping farmers who opt to want to sell their carbon removal through that program, we’re making that easy to do.
And so it’s an example of just stacking benefits. But you ended your comments with the technology side of being able to look at nutrient density and or just in general ecosystem health. And that really excites me. And so we talked about the Basically, handheld spectrometer tool that Dan was working on his podcast. But I’m wondering if you could lay out the landscape a little bit where you see technology playing a role in this transition to regenerative agriculture and where you see that really speeding things up.
Koen van Seijen: Yeah, I think there are two, I mean, obviously marketplaces for ecosystem services like yourself. But I think there’s a technology piece there as well, apart from the marketplace, which is soil health measurements. I think we desperately need easy, cheap, consistent ways of measuring carbon and measuring activity in the soil, etc. So I think there’s a technology play there. A lot of people are working on that. So that’s really good. Then we talked about, in this case, the measurement of nutrient density. I think we need a lot more there for a lot of different crops, a lot of software development, a lot of ways to make this sustainable.
It’s much more accessible and hopefully soon also consumer accessible in your phone, on your phone, et cetera. But I think there’s a piece we often don’t talk about and it’s a much bigger question, which also actually often farmers don’t ask. And that’s the question of what to plant, where and why. And we always look at a farm level, like if we do a farm design, if we do, we always look more or less at the farm and the context, et cetera. But I see huge opportunities in the future to take it to a landscape view or take it to the ecosystem scale.
What would happen if you do regenerative agriculture in a landscape, on an island, in basically a biome? And then the question comes, okay, I have a limited set of resources. I would like to regenerate this whole valley or this whole river system. But where do I start and which pieces are more important and which pieces should I do first and what should I plant, where and why? And I think their technology... And hopefully in the future, we’ll be able to assist really good designers to make a lot of these calculations, these models, and to figure out, okay, what’s the most optimum, for instance, if I want to bring back a river or what’s the optimum if I want to create as much biomass as possible, or if I want to store as much.
Carbon in the soil. That might be different scenarios. And until now, we have really mostly done it on a farm level and never really on a landscape size. And I think that becomes very, very interesting. And it’s something I haven’t seen too much. Please reach out if you have been working on that. But I haven’t seen too much development on figuring out that question, what to plant, where and why.
Christophe Jospe: We’ve seen a bit, I mean, you kind of hear about it in terms of predictive analytics where you’re using machine learning algorithms that have some kind of black box and are able to tell you this information based on certain parameters. The jury’s out because it’s In farming, you know, you get in a lifetime, probably 40 shots at doing something and each time you might want to tweak it slightly differently. And then you need to really observe with nature and see how things react, which brings up this interesting paradox that I think both Ross and I have been wrestling with because we have read a book called The Wizard and the Prophet by Charles Mann.
Have you read that book by any chance?
Koen van Seijen: No, I’ve seen a lot of summaries, and I’ve seen, I think, a few presentations that I haven’t read yet. I think it’s actually on my list, but I haven’t gotten to it yet in this lockdown we’re in so far. But is it worth it?
Ross Kenyon: It’s great. I think it’s very good. And I think he’s very fair to both the wizards and the profits out there. I don’t think he...
Koen van Seijen: Which isn’t easy, yeah.
Ross Kenyon: Which is not...
Koen van Seijen: To keep both, yeah.
Ross Kenyon: Oh, yeah. I say that with a great deal of admiration. And Krista, I’ll let you continue. I just want to throw my two cents in.
Christophe Jospe: Well, all good. I couldn’t help but ask, in hearing you talk about using technology to make landscape design, this is very wizardly thinking. It’s kind of like we can engineer our way out of any problem because of human ingenuity, where a prophet who is a land steward will come in and say, no, we need to sit back. Actually, technology is not the answer. We need to let nature do its work. And so I’m wondering, Kun, to put you on the spot, to what extent do you see the world through a wizard versus profit lens?
And how do you see this playing out?
Ross Kenyon: This is the first time this question has been asked, but I have a feeling it’s just going to be, I assume it will be a standing question.
Unknown speaker: It’s going to be a recurring one, yeah. It might become a staple.
Christophe Jospe: Well, Charles Mann, we’re coming for you, right?
Unknown speaker: Oh, definitely, yeah.
Koen van Seijen: I think it’s an excellent question. I would see technology as something that can augment the land steward. So I would say definitely on the land steward side, because without indigenous learnings, without people that have really, really understood their landscape... We’re nowhere. I don’t think any software can ever design something that comes even close to that. But I think we don’t have enough land stewards that can basically operate on a landscape size scale. And so if we can use technology to augment them and to help make them... Better decisions or larger decisions over larger areas.
I think we can get a lot of these, I would always call them gurus, but with actually admiration, that are really, really good at designing a thousand hectares or acres or smaller ones. How do we get them to almost supersize that to 10,000 or 100,000 or more or a million? How do we get that knowledge that is really deep and embedded? And I think we should absolutely... Not overstated. There’s a lot of deep landscape knowledge in a lot of these places, but there’s also a lot of ways we can leverage technology to do this faster and maybe even avoid some mistakes or maybe even play Some scenarios that we didn’t think about because we have climate models that go for the next 10, 20 years because we have certain things that machine learning can do really, really well.
But I would always go for the augmented and definitely not replace because I think then we are in deep trouble with something as interconnected coming back to your previous point as nature because we’ll simply simplify it to something and we’ve all seen what happens when we do that.
Ross Kenyon: No one ever gives a straight answer to that. Of course not. It’s just too neatly placed. And everyone wants to find that middle ground there. I think we’re both like that too.
Christophe Jospe: Yeah. So what you’re saying is you’re pro robots on farms, but you still want to see humans employed on that farm too.
Koen van Seijen: You could summarize it like that. I think there’s a role for, I mean, farm workers, we see it in the crisis now, for any backbreaking work, We should definitely look at any ways to make that more humane. Why would we allow that in 2020 to happen? And I think technology will offer a lot of ways to do that. But I also think we should very fundamentally question what’s that role because we’ve made many mistakes in the past with technology and it’s very easy, just like with money, just like with investing.
It’s a tool and we need to use it properly. And I think in terms of If you look at a land steward and a very, the truth is probably most landscapes are so degraded that if we would put a fence around it and just let nature come back, it would take too long. And we probably need some kind of management somewhere, either it’s the introduction of certain species or the introduction of certain land. Livestock or it’s the management of certain things to speed up certain regeneration processes. So it is, we cannot put a fence around and sort of imagine that we’re out of it.
I mean, we’re going to influence it anyway. So we better, because we’re part of it. So we better, we’re part of the landscape if we like it or not. We better use it. Technology is part of it as well. I think we better use it and figure out a way to leverage and speed up because we are literally running out of time and soil.
Ross Kenyon: I think that last point puts you in the wizard camp at least somewhat. I think it’s a fair point. I mean, in the book, he talks about how Norman Borlaug, father of the Green Revolution, grew up on a farm, found it to be backbreaking, not super fun to be out there in the fields on his family farm. He was looking for ways to make that simpler and easier for people so he could go off to school and do other things. And I think we tend to romanticize it. Oh, we totally do.
I mean, individually, we do. But also collectively, we like this bucolic image of farm life, which is true for some people. Many people that we’ve had on the show really enjoy their lives that way. But I’m not sure everyone experiences it that way either.
Koen van Seijen: No, I think we have to be very careful to romanticize that and be... I think there are ways to farm... And have a very healthy lifestyle, but it’s also decay, like very healthy work-life balance, etc. And I think many regenerative farmers you will find have a much healthier lifestyle in general than non-regenerative farmers, lower stress levels, etc. I think Savory just did a research on that. But the truth is most farmers are not like that. Most farmers do work weeks that makes the normal city person look like a joke. And for a salary or for a profit at the end of the year or any kind of return, that really is like a lot of farmers.
Farmers are farming below the poverty line. So we should have a very tough discussion on why did we allow the people that are growing our food? Why did we create a system like that? And I think the future needs to be farmers that are comfortably healthy and have a work-life balance that makes sense. And at the moment, most, if it’s from smallholder farmers to the large scale, most of them have not a healthy work-life balance, which is honestly dangerous for all of us.
Ross Kenyon: Well, Kuhn, maybe this is outside of your ken or maybe not. And feel free to answer as non-American here. You have different policies in your homeland. But what is the role of policy, do you think, between investing in the regenerative economy and regenerative agriculture? And what is the role for various states to play, if any?
Koen van Seijen: No, I think the role is huge and it comes up actually quite often in the podcast when I ask what would you change overnight if you could do one thing and policy actually comes up quite often. It’s nothing, something I’ve explored too much because it’s simply not my space but I think As an investor, but also as a farmer, it’s very difficult to make this transition towards more regenerative practices if all the policies that are in place in your country or your state or your region basically push you towards the other side.
You have to be very, very persistent. Persistent or very close to bankruptcy to go through that if all the policies push you towards that. And so far, most policies I’ve seen are not very in favor of building soil, regenerative practices, lowering inputs dramatically, growing nutrient-dense food, etc. There are some examples. I think it’s changing a lot. But in general, because we’ve created another system just to grow as much food as possible and never be hungry again, at least in Europe. So it hasn’t been focused on soil health. It’s changing slowly, but we’re dealing with a legacy set of policies that simply didn’t think about soil as we are thinking about it now.
So it’s more a legacy issue, I think, but it doesn’t help at all, obviously, if you want to really go forward and you’re basically being pulled backwards because a lot of things you cannot do, like planting trees on a farm because they simply never thought in policies that would happen on a broad acre farm, just to name an example.
Ross Kenyon: Yeah, we solved that problem of, well, in some ways we solved the problem of there’s less hunger. More people can exist on fewer farmed acres. Have you ever seen that meme? Man, this might be a cut because it’s too hard to explain the visual element of this. Have you seen that meme of those guys at the castle and they’re like, so-and-so is coming. Open the gate. Oh, it’s so-and-so. Close the gate. Oh, it’s actually someone else. Open the gate a little bit. That’s how I feel like it is between this, like grow as much food as possible, regenerate as much as possible, but it’s maybe more expensive or harder to do.
And then there’s just like this fine middle line where people are fed and soil health is taken care of. Christophe, did I emulate you? Is this too far of a stretch to have tried to make?
Christophe Jospe: No, I think it’s good. I mean, I am agreeing with what Koontz has to say. Just even to look at America, which is ostensibly a breadbasket, Of the corn that we grow, most of the- How much do you eat? Should we be growing corn at all? To what extent do policies actually prop up that simplistic system versus the reality of what’s just more complex for soil health. So, I agree that we have perverse incentives that those who understand some of these interconnections and what truly is good for ourselves and the environment, like we’re fighting this uphill battle.
So, in some cases, you know, to evoke the libertarian in me, it’s like get rid of all farm subsidies and policies and like let the free market compete. How does that fit with you, Kuhn?
Koen van Seijen: I have no idea. I mean, in my discussions or interviews with people in the US, I think the subsidies or the crop insurance system comes up time and time again as one of the biggest barriers for people to switch because anything you want to do to grow soil simply doesn’t qualify. And in that case, maybe it would be a good thing, but I really don’t have the knowledge to basically take that away and see what happens. But obviously you’re playing with lives and people that have optimized the system to grow corn for either a What a graceful answer to such a direct, weird question, Christophe.
Ross Kenyon: Do you want free markets? Full stop. Kuhn, what do you think about full communism? Is that an alternative that you’d like? No, I think it’s a fair question. What I like about the libertarian analysis on something like this is a lot of the libertarian way of thinking for this is what can you take away that would improve the system? Instead of adding a policy, is there a policy that has distorted things that we could just remove that would make things simpler? There’d be less law on the books that would actually lead to a better result.
I think that’s a fun exercise and I almost never encounter it in these spaces. I don’t know why. It’s always the addition of new policies and very rarely the subtraction of ones that are obsolete or not very good.
Koen van Seijen: Maybe it should be a law that if you add a policy, you have to remove one or something like that.
Ross Kenyon: I love that whenever that’s suggested. I think that’s a really clever way of doing things, and I wish that were the case.
Koen van Seijen: But I think it’s very dangerous to also say, what if we remove this, then... These are systems, they’re very complex. And even if you remove one thing where we’re pretty sure that it’s going to be beneficial for the whole system, we might still get hit from left or right because something we oversaw. So it’s very difficult because you cannot run the scenarios. Because you don’t have another America to play with basically and to see, okay, what if we do it for a control group and what if we don’t? But I think it’s very tricky in these systems to add something or to take something away because everything is connected and you might just pull away the last Jenga piece and the whole tower collapses.
And that might not have been in your model, but it doesn’t mean it doesn’t happen.
Ross Kenyon: That’s absolutely the case. And it’s a good reason to be cautious. I think it’s also a good reason to maybe not do a lot of this stuff at the federal level, just because there is so much diversity with inside the country. And if it works well in one place, who’s to say that it doesn’t Enter the impact investor to figure it all out, right?
Unknown speaker: Yeah, because we got it all figured out, yeah.
Ross Kenyon: Americans like to think of Europe as having it totally figured out. And I think we’re all seeing that it’s as much a dumpster fire over there as it is over here.
Koen van Seijen: No, absolutely. I think, I mean, for sure, let’s say Europe is ahead on certain things and for sure it’s very behind on other things. I mean, there’s no, I don’t think anybody has figured it completely out.
Ross Kenyon: No, I guess we’ll keep running our mouths, seeing if we can turn people on to cool ideas that maybe help things in the future. And if people wanted to learn more about all of the interesting things that you’re working on and thinking about, Kuhn, what’s a good place for them to find you and find your work?
Koen van Seijen: Yeah, I mean, for sure the podcast, which I imagine people are into podcasts, otherwise they wouldn’t be listening. So you can find it on any podcast app, basically search for investing in regenerative agriculture, or you can go to the website, which is investinginregenerativeagriculture.com. And you can find basically the episodes, you can find some webinars we did. And we basically, I tried to share my research into the space of how to put money to work. To regenerate soil and get a fair return, if possible. Try to share that as publicly as possible through interviews, which I’ve been very lucky to interview very interesting people so far.
We’re about, I think, 78 or 79 interviews in. So it’s been quite a journey.
Ross Kenyon: Wow, that’s a lot. I think a lot of the podcasts don’t make it past, I don’t know, a couple episodes, 10 episodes?
Koen van Seijen: I think most of us are three or four, yeah.
Ross Kenyon: Yeah. So you’re in for the long haul. You’re here to stay.
Koen van Seijen: And I have a long list. My issue is how to select, honestly. I think I have 150 or over 150 other interviews I want to record. So I’m going to be doing this for a while.
Ross Kenyon: Yeah, that’s not a bad problem to have. No.
Koen van Seijen: I think many podcasts also, they run out of stories to tell, which in this case, I think in our case, is absolutely not the issue.
Ross Kenyon: No, I mean, I feel like every direction I look, there’s an interesting podcast to be done. And I think we find new ways of thinking about it all the time. So those links are all in the show notes. Thanks for being here, Kuhn.
Koen van Seijen: Thank you so much for the opportunity to share. It was a lot of fun.
Ross Kenyon: Yeah. And thank you, Kristoff, for popping your head back in here. It gets a little lonely sometimes.
Christophe Jospe: Yeah. And hopefully one day where this social distancing, don’t see other humans ban goes away. Look forward to meeting you in person.
Koen van Seijen: That would be great.
Ross Kenyon: Great. And thanks for listening. If you like the show, please rate and review us on iTunes, Apple Podcasts, Stitcher. Tell your friends. We have a Patreon. Go to patreon.com slash noripodcasts with S plural podcast. And thank you so much for listening. Well, thank you so much for listening. If you like the show, please rate and review it in Apple Podcasts and or Stitcher. It really helps us a lot to get this content to a wider audience. If you think what we’re doing is useful, interesting, fun, hopefully all three, we’d certainly appreciate your rating and review.
You can keep up We are also now on Patreon at patreon.com slash noripodcasts if you’d like more content, engagement, and community. And thank you so much for your support.
