Skip to main content

The Transition To Regenerative Will Require Innovative Farmers—And Creative Financial And Retail Partners

The Transition To Regenerative Will Require Innovative Farmers—And Creative Financial And Retail Partners

by ESG Business Institute -
Number of replies: 0

Farmers—and the agricultural industry as a whole—in many ways are the lifeblood of a country. They provide communities with the food that sustains them, and, crucially, act as stewards of the land on which they grow their crops and house their livestock.  

Commodity and industry agriculture and meat production, however, are known to contribute to climate change. But scale, growing practices, and other factors can make a big difference: Regenerative agriculture can actually have a positive environmental impact, a far cry from the damaging effects of other farming enterprises. And the planet along with consumer markets are making louder demands for just such a shift—a transition that will require investors, farmers, distributors, retailers and consumers to all play a part. 

One innovative model hoping to provide funding and market support for farmers in making on-farm transitions toward regenerative agriculture was launched in January of 2020 by Danone North America and RePlant capital. According to
the press release: 

“Danone North America, a leading food & beverage company and the world’s largest Certified B Corp, today announced its partnership with rePlant Capital, a financial services firm dedicated to reversing climate change. Over the next several years, rePlant will invest up to $20 million dollars to support Danone North America’s farmer partners with expenses related to converting to regenerative or organic farming practices. These practices increase biodiversity, enhance ecosystems and enrich soil, as part of the company and its partners’ broader commitments to addressing climate change.”

The first of the rePlant loans to Danone farmer partners went to Kansas-based
McCarty Family Farms, run by four brothers who are fourth-generation dairy farmers. The long-held, large dairy has been making big strides toward more regenerative practices, but some of the investments would not have been possible without creative financial models and a brand committed to purchasing the milk as the changes were underway (not only after implementation.) 

“Regenerative ag to us, in essence, means that we are not participating in an extractive model, and that we're participating in a more circular economy,” Ken McCarty, one of the owners and managers of McCarty Family Farms, says. “As we draw the nutrients from the soil or from the earth that are required to take care of our cows and take care of our farms, we're working to replenish those same nutrients from the farms back to the soil. And wherever our footprint lands along the value chain, we are trying to enrich that aspect of the value chain in any way that we can.”

I spoke with McCarty recently as part of my research of purpose-driven businesses and to learn more about the regenerative work the farm is involved in. He also shared how his farm is encouraging others in the industry and in its supply chain to adopt regenerative practices. 

Chris Marquis:
Recently, I have seen growing mentions of regenerative business practices and, more specifically, regenerative agriculture. How does McCarty Family Farms approach regenerative farming? 

Ken McCarty:
Regenerative ag is something that is fundamental to agriculture in general. And it's something that the ag community has been doing for decades, centuries, millennia, but we've really tried to put a quantification standard around what we view as regenerative ag.  

We try to take a very holistic view of regenerative agriculture. And that could include enhancing soil health, that could include things like re-establishing or enhancing biodiversity efforts within our specific region, it could even mean things like trying to conserve natural resources, or work with partners that we've engaged with along that value chain to encourage more regenerative practices. So our efforts are wid- ranging, but in essence it's about leaving the Earth better than what we found. It makes sense. 

How do you ensure your own supply chain partners operate responsibly? 

That's something that we're always trying to work towards improving, but hands down, the foundation of that is, in essence, open communication and trying to achieve some form of partnership. And when I say partnership, I don't necessarily mean a business partnership or financial partnership, but oftentimes it's more about an idealistic partnership.  

Let's take regenerative ag, for example. We believe that regenerative ag is the best thing for our farm and for the farms that supply us, for example, the feed for our cows. Number one, we try to walk the walk, we don't just try to talk the talk. So we implement those regenerative practices on our own acres before we ask our farmer partners to implement them. We try to facilitate ways in which, if there's going to be a financial burden to them, either we offset that financial burden through how we buy feed from them, or we help them find ways in which they can defray that cost.  

We also try to work together with outside groups that can help bring value to our farmer partners, whether it be through the quantification of their regenerative ag practices that they're deploying or helping them access those funds that can help defray the costs or also just simply helping them quantify, “Through this practice, I sequestered X amount of carbon.” 

And whether or not I buy those carbon credits for them and count them in my supply chain, I'm creating another opportunity for them because, at the end of the day, if I plan to be here 20 years from now, I need them to be here 20 years from now. I cannot survive long term in a purely transactional marketplace. I need to build a marketplace that is founded on shared values. And that's what we're working towards. 

Can you share some specific practices you’ve implemented to make your farm more regenerative? 

Absolutely. Here in Northwest Kansas, wind erosion is a serious issue. So what we've done is we have deployed cover crops across all the acres that we farm. And those cover crops do a variety of different positive things: They reduce the amount of topsoil loss due to erosion, they sequester carbon, they bring a variety of different agronomic benefits to the overall farm from moving nutrients into the root zone where the primary crop can access them better to adding organic matter to the soil, which would allow for greater water retention to adding nutrients and carbon to the soil and increasing microbiological activity.  

All of those things benefit our primary crop, but depending on where we're at, those cover crops may or may not be harvested and fed to our cattle, or they may just serve that purpose to do all the things that I mentioned before. 

As a dairy farm, how do your cows factor into your regenerative efforts? 

As we think about how our farm fits into supply chains and the value chains that make up the ecosystems that surround our dairy farms, the cow really is the key to the success of all the downstream and upstream ecosystems. For us to be able to optimize both the ecosystems downstream and upstream from her, we absolutely have to provide her with the best possible care that we can. She is what takes the nutrients that are created in the field and converts them into nutrients that you and I, and our kids, our parents, and our neighbors can consume and enjoy. If we don't give her the best possible care, the system can't function at its highest level. 

MVP Dairy in Ohio, which is a partnership between my family and the VanTilburg family, and the four dairy farms we operate here in the west are the only dairy farms in the world to have achieved the four Validus certifications. The key one for us, regarding our cows, is Validus Animal Welfare. Then we've taken that a step beyond and gone to Validus Environmental Care, Validus Worker Care, and Validus On-Farm Security. By completing the Animal Welfare, Environmental Care and Worker Care Validus certifications, our farms are what is considered Dairy Care Certified. And this is just one third party certification body, there are other certification bodies that we work with.  

FARM, which stands for Farmers Assuring Responsible Management, is another certification group that we work with to audit our farms, our cow care practices, our human resources practices, and our environmental care practices. And then we go beyond that, to work with a group called BQA, Beef Quality Assurance, which also again touches heavily on animal welfare and animal handling. And we ask independent third party groups to monitor our farms through remote video monitoring services to ensure that we're complying to our own protocols, that we're treating our animals properly, and that we're all working in a safe manner as well. The McCarty Farms and MVP Dairy are also bothCertified B Corporations. 

And I love those things, but they're very mechanical, they're very technical. The things that I enjoy most of all are the things like providing grooming posts, basically scratch pads, for all of our cows to enjoy, providing those sorts of environmental enrichments allow you to see a cow be a cow and to see her have a good day and enjoy herself. It's those things that I enjoy implementing across our farms and that, when people come into our farms, they enjoy seeing most of all.