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  Welcome to part 3 of my interview with Ariane Lotti from Tenuta San Carlo in Tuscany. In this final part, we talk about farm policy and about the CAP, the Common Agriculture Policy. Before moving to Tuscany and becoming a farmer herself 11 years ago, Ariane used to work in farm policy back in the US. So this gives her a unique perspective as both an expert in foreign policy, but also someone who has more than 10 years experience. working as a farmer in Europe. This episode was made in partnership with Soil Capital. I am your host Raphael and this is the Deep Seed Podcast. You told us at the start of this conversation that you used to work in farming policy back in the US and now you've been farming for over 10 years here. kind of both sides now of both experiences. Policy is a really important, really interesting topic, so I was wondering if we could get a little bit deeper into that now with you. I completely agree that policy is a very important topic and in the EU the policy that structures the farming sector is called the Common Agriculture Policy or the EU CAP and It's got a lovely history because it's one of the first unifying policies for continental Europe in the Second World War II, in the post-World War II rebuilding. So it's got a nice history in terms of unification, but it has over time really directed agriculture and farming systems towards a very conventional farming model, an industrial farming model. More recently, it has focused on the multifunctionality of agriculture, that is, the many ways that a farm interacts with its landscape. So a farm doesn't just produce food, right? It stewards a landscape, it provides recreational opportunities for people who don't farm, and it's part of a community. So the EU cap has... While there are some policies within it that really support kind of more industrial conventional parts, it has taken this much wider view of what a farm is and can be and the importance of farms on the landscape. So it's not all bad, right? And in the recent years, it's really tried to take the part of the EU farm-to-fork strategy. related to the EU's Green Deal and apply and give certain objectives around more environmentally friendly farming to the agriculture sector, which were definitely met with some protest by conventional farming associations. And so you right now have this a little bit of a hybrid where they're trying to include more directly climate goals and environmental goals and rural development goals, but they're also trying to ensure EU supply, food supply, right, especially after the beginning of the war in Ukraine. So there are a lot of competing objectives, right, in the policy landscape and just this week. And the EU was debating how much to remove from the agriculture budget to put into the Re-arm Europe plan. So it's a complex beast, but it's very important. And so the way I like to think about it is how does the cap intersect with Tinuta San Carlo and what we do here? And it intersects in a lot of different ways. And there are ways to improve how it intersects with the farm. So we do get production subsidies from the EU. So I produce rice, I produce wheat, I produce clover, I produce, you know, some flowers I produce. Name your crop and because I'm producing on that piece of land I'll get a direct payment, really, you know, tied to kind of environmental practices as well, but since I'm certified organic that checks that box. But in the past In the past reforms, they made that a lot of the subsidy questions much more prescriptive and much more complex to adhere to. So they added significant levels of bureaucracy and paperwork to be able to apply to and access those funds. And so on the one hand, if there are fewer funds available, it does make sense. sense to make sure that they're going to the right types of practices but on the other hand you've almost been too prescriptive right um i'd like to see in some future a more outcomes-based policy right where you're saying less to farmers do this this and this or else you won't get support but instead like we're going towards that objective and how you choose to do that right within a certain, you know, within certain limits is up to you because you know your land. So I get direct subsidies, but the more interesting part and the more, in my mind, the more, the part that aligns more with some of the goals around regenerative food systems more broadly is that the EU, through its Rural Development Funding Program, supports both transition to organic agriculture, which I think is an important step, although not necessary in all instances, towards on path to regenerative agriculture management, but also supports the breeding of breeds and plant varieties that are considered to be going extinct from an agricultural basis. So it's rather than programs that do some good. And then there are these supply chain level programs, one of which was really important to me in the early years of organic production. So essentially, in these supply chain projects, the EU says to a group of farmers, processors, retailers, and a university, if you want some support, for your supply chain development, we'll give it to you, but you have to put together a supply chain agreement that lasts about five years, right? And at the time, in 2017, I participated in one of these agreements around organic agriculture, right, in Tuscany. And I was part of the producers who, you know, were agreeing to participate in a supply chain around organic agriculture development in Tuscany. And the big benefit of that for me was a market one, right? Because in order for the supply chain application to pass, there had to be retailers and distributors who participated and agreed to purchase the production from farms that adhered to the supply chain, right? And as I said earlier, I have distribution partners and supply chain partners. that are, you know, organic supermarkets or, you know, I don't sell all of my product under my brand, right, for the amount of product that I produce. So those relationships were really important. And what the EU then does through the Rural Development Funding, it says we'll cover 40% of the cost of the investments that you make related to the building of that supply chain. And so I'm a farmer. At that time, my application included a new tractor, a grain dryer, steel wheels that I need to do rice production, and precision technology to make sure that we were, you know, a GPS satellite system on the tractor. And so the EU, the application passed. The EU provided 40% of the funding through the Rural Development Program. and I still to this day even if The supply chain, the five years of the supply chain contract ended. I still supply some of the clients that I made through that supply chain agreement. And so it was such an important part of our my organic transition because I had essentially a set market for a period of time when I was making investments in the farm. So after those five years the investment has been... made, the partnership has been created, the supply chain has been running for five years, so it has a good reason to continue, right? Yeah, yes, exactly. And after those five years, in Italian we say it was a messa in sicurezza, right? Those were the years when I kind of rebuilt the foundation of this new chapter in the farm's story, right? And at that point, having made the investments, having, you know, built the market relationships, I was then able to take some of the next steps into more, let's say, more interesting techniques also. Because at that point, Even though you're not, you know, you haven't fully recovered a conventional system in five years, if you've been doing, like I was doing, crop rotation, cover cropping, really careful kind of nutrients, you know, management, you start to see the benefits in your system as well, right? And so... I have heard from other farmers who have made transitions that it does take about 10 years to really transition a system. I mean that transition never ends and it never stops and it's always a journey but that core, that initial big step takes about 10 years but that that five-year mark for us was for me was was important because there was that project, you know, that helped to support those investments and create those market relationships. Okay, and you were able to invest more in that transition then because you were financially a bit more stable, safe, a bit more margin, and that allowed you, that gave you the space to be a bit more ambitious? Yes, yeah, the margins aren't, they're very razor-thin margins, right? But at that point, Yes, I was starting to build the profitability that allowed me to make some more investments in equipment and infrastructure, which I need, but also to experiment with a couple of practices that were less economically viable. Right. Okay. I love that you're highlighting the positives of the EU policies at the moment and how they actually helped you. No, but I love it. It's important to really understand the full picture. But if we went on the other side of the equation, what would you say now these policies are lacking? How could they improve, especially ahead of the new cap budget that's going to be decided very soon? Yeah, this is such an important question. One, because obviously the resources are going to be fewer, there's going to be less money available. And because on certain objectives, the cap has failed. Right? We, the farming population grows older, there isn't the renewal of farmers, there's always, you know, farmers that leave the land that don't pass it on either to their kids or to younger farmers. There's a question of land accessibility and availability of land for those new farmers and there are big questions around markets, right? and then climate objectives, obviously. So in my mind, we're at a point generally where systems that we've relied on, not just, I'm saying we like the royal we, right? Like that society has relied on, have been crumbling for a while, and it feels like we're at a breaking point, you know, in this post-COVID era. where institutions are failing, economies are failing, things are just, the climate's changing faster than was expected, essentially. And part of the, for agriculture, part of the future, I think, is really around that outcomes-oriented farming. but outcomes in the sense of that are measurable outcomes that that farmers can track on their own and i do think this is one of those areas where technology and ai can help facilitate a transition right right now when i go do my subsidy application or when i apply for any sort of funding the amount of paperwork is takes a separate consultant to work on right And everything is so prescriptive. But if we have less money available, essentially to support the delivery mechanisms of this money, which is like institutions and governments, if there's less money around for everybody, let's focus that money on what we want our outcomes to be. I know that's easy to say, right? And much harder to implement. I've been working, I worked last summer with the Climate Farmers Network in Europe to help test a farm health assessment and monitoring tool. I know there are a lot of startups that are working on technologies that are helping farmers to measure everything from, you know, soil health quality to water use to, you know, biodiversity, maybe less. But being able to integrate the uses of these technologies into then an application that the government receives. right let's say that I don't know right I In order to get my subsidy payment, I have to show that I'm improving organic matter in the soil, right? And I have to show that. It's hard to show it like on a yearly basis, but let's do the minimum every three years, right? And if there are soil tests that I can easily do, right, without all of the expense of, you know, shipping it to a lab for two weeks to have the thing, you know, and I can just give them the results. And those results get processed essentially by either humans or a machine to say whether or not I've reached targets and objectives or not. That becomes a lot easier than what we're doing now, right? Which is the EU policies people, the CAP saying, this is how we want you to farm. And these are the rotations that we think are going to work for you. But what I do here in southern Tuscany is different from what they do in northern Italy, is different from what they do in southern Italy because we're in different like climate zones and have different soils. And what I do here is different from what's done like 30 kilometers away. So instead if we're given objectives, measurable objectives, then it becomes easier. Another thing like I think a dirty secret around the CAP is that even if it's obviously supported food production and a farm economy, it has driven people out of farming, like the labor force out of farming, because it has subsidized, as I mentioned early in one of those rural development projects, the purchase primarily of new machinery, right, and new equipment, which absolutely is useful and I as a farmer need and want, right? But when you're looking at rebuilding essentially the capacity of a group of people to effectively manage land, I'm one of those people who believe that that can't be done by robots, right? I think that comes from being on the land. And feeling it and experiencing it and having that experience of knowing what the soils in this part of the land do and what the soils over there do, what works there, what doesn't, what weed problems do I have here, how when it rains, what happens over there and what happens on this piece. All of that knowledge comes from experience on the physical land of a person. And if we remove people from the land and incentivize that movement, then I think we've taken a step in the wrong direction in terms of reconnecting people with the land, which I think is so important. Yeah. I have more questions about the outcome-based side of things, but just to stay on this for now... I don't have many answers. Yeah, to stay on this for now, what would you suggest changing to make sure that we're not driving more people off the land and we're incentivizing... Spending those budgets in hiring people and paying people better and not only in buying machinery and technology. I think for a farmer, one of the most important things is being able to sell what you produce at a right price. And if markets are aligned with values, then I think everything will follow from that. because I also, as a farm business, You know, if I knew that I had markets and I work hard to find markets that pay me a decent price, but it's not on the entirety of what I produce, right? There are things that I still sell, I think, under a fair market price. Then I would be able to have the type of income that could make me, you know, that would support running a healthy business, right? And I think once you look at how to support healthy business management, then the people will follow, both in terms of whether someone wants to start a farming, you know, operation on their own, or whether they want to work with and for a farm, right? And I do think you do have to couple that with... with land access. Because one thing is a situation like mine where I inherited the land, there was no mortgage on that. I do think the government, if they want more people in the farming sector, does have to somehow intervene in land access and land transition, right? Many of my neighbors, they are essentially the older generation, right? They're above 65. Their children don't want to manage that land. What will happen to that land? Who will buy that land? What will, will young farmers or new farmers who don't have access to land be able to afford that land at the prices that currently that land is sold for? But also, will they be able to make a business plan from that land? You know, so I do think if you invest or if you make, you know, this is always such a tricky subject, because if you work to pay farmers a fair price and make farming a livelihood that can be, that provide the type of income that people would like to see, then you do need to couple that with access to land. But There is the question then of the price that consumers receive on the end, right? Which is always that question that's hard to answer without any sort of government intervention, right? And that's where the government, it could be helpful for the government to intervene. And they currently do that on the production side with farm subsidies in the U.S. up until a few weeks ago. And the bill that was passed under the Trump administration, they were doing that also through the food stamp program and the supplemental nutrition assistance program, where people making under a certain income level would receive subsidies from the government to buy food. In Europe, the social safety net and the welfare state provide support in other ways to families that don't have adequate income, so they're not really comparable. but There is a question about the government's role and how the government or the EU should help to support farmer livelihoods and make food affordable, right? And that's where that intervention is needed. It makes sense. But you said that we need to basically align market and values, right? That's the core of everything you just explained here. I'm going to be the devil's advocate, but I will say that markets have not been known very often to align with values, but more with profits no matter what. Exactly. Yeah, for sure. Yeah, but it does make sense. I would love to see more of that, more of these support mechanisms for people who can't afford good healthy food, and making sure that that money is spent not on fast food and sodas, but to spend on healthy food that has been produced in a healthy way that has supported regeneration of land. It feels like something that is doable, right? But yeah, I'm not sure how we get there. Yeah, up until recently there were successful pilot programs in the US that worked on connecting consumers, like lower-income consumers, with healthy food acts, you know, healthy food. There were some successful pilot projects, right? Everybody wins in that situation. And I do think that as... European food systems lose a little bit of that European-ness to them, especially in Italy. The Italian consumer knows about seasonality, knows how to access fresh fruits and vegetables, knows how to access better food, that there is a very kind of clear effort. At a government level, right, because I agree with you, values and markets, you know, if we're talking about the types of values that are the subject of this podcast, you're not going to get that alignment easily or outside of a certain sphere of people, that the government can facilitate that connection between food that's produced well and that has high nutritional value. with consumers that might not be able to afford that food. Okay, yeah. Just a very quick post to tell you about the official partner of the Deep Seed podcast, Soil Capital. Soil Capital is a company that accelerates the transition to regenerative agriculture by financially rewarding farmers who improve their crops. Things like soil health and biodiversity. They're an amazing company, and if you'd like to learn more about them, I will leave a link in the description of this episode. We're getting super technical here, but I love it. I really love it because I'm learning a lot. And I know that if I'm learning, people listening are likely to be learning as well. So I just wanted to rewind a little bit back to the outcome-based idea here. And I wanted to ask you, in your opinion, obviously, I know it's this... personal, what kind of outcomes should we be looking at? Because you mentioned outcomes that should be easily measurable by the farmer, they should be accessible to all farms without spending a lot of money, they're easily verifiable and efficient, I mean, and useful metrics to look at. What would you recommend? So this is where I think there's a lot of interesting kind of projects to try out and I'm actually following in the local news A project that's happening not too far away from where you're staying in Pitigliano, which is this hill town about an hour away that has faced questions of over-tourism, right? And I know this is different, but I'll get there, right? And instead of saying we're going to, you know, welcome all the tourism that we can and build our economy off of a tourism, what the town, what the municipality decided to do was to start a conversation with the residents about what they wanted their town to look like and what kind of business opportunities they felt comfortable with around tourism and what they wanted tourism to look like, right? And that whole experiment on a very local policy level has had me thinking a lot about how policy can support communities. Right, and to be able to support communities in what a community wants, policy has to be rooted in a local environment. And so when we think about outcomes-oriented policy, I like saying that phrase because I think outcomes, thinking about how something can be outcomes-oriented changes the way we think about policy, but I do think that successful policy needs to be rooted at the community level. And so what might work for this area here to measure in terms of farming outcomes might be different than what makes sense for a community, a farming community in Northern Europe. I mean, obviously things like soil health, you know, parameters of soil health and soil quality are very important indicators of you know, the health of a system, as is water, all the indicators around water retention and water quality and water availability. But in an area like this where for a few months out of the year it hardly rains, we might want to really specify a lot more around water conservation and water management than perhaps an area that has more regular rainfall, right? Or if an area has, you know salt incursion or has desertification there it depends on what the critical natural resources of that area are the final thing i will say on that is um i do think there has the farmers in the eu and in the us just for an extent have kind of become used to the eu paying them and just doing what the cap wants them to do. right? Not all farmers, not everywhere, but there's this general sense, okay, you know, I essentially work for the EU in food production, right? And the government is an important partner in my farm business. But I do think there is, it's an important dialogue and important conversation to have. It'd be interesting to see if it happens around not just doing... things because the CAP thinks they should be done, but doing things because you as a farmer, you know, manage your piece of land, have a business plan, develop markets, have other goals besides what the EU is directly telling you to do. So I guess what you're saying it really depends on the local context and it should be the local community that decides what those outcomes should be for them, but then how do you implement that? in practice? I don't, I'm still at the theoretical level there. No, I do think there needs to be, um, I do think on one side there needs to be kind of that community-led or that can... mechanisms for communities to participate. But then if we are going to get funding from the EU for agriculture, we do have to make it fair across all communities throughout Europe. And so that's where I do think there can be large agreement, large broad scale agreement on some of the environmental indicators I mentioned, some of the human indicators right around job creation, farmer health and mental health, which I think is so important. and rural community, you know, the health of rural communities as well. And then questions around market indicators, right? I don't know, you know, there are big questions right now around how tariffs and wars impact agricultural markets, but indicators around, you know, market development and market access for farms. So you mentioned that there are many different sides to the business here. Unfortunately, we don't have time today to explore in detail each one of these topics, but maybe you could tell us a little bit more about the bigger picture of what you're doing here. Absolutely. The mission of the farm, since I've been managing it, has been to apply sustainable and now regenerative practices at scale, to be a model for what a regenerative farm can look like at a certain size, right, in terms of land area. And part of that involves, as we've talked about, the, you know, the crop production. There's livestock on the farm as well. We have a herd of heritage breed cattle called Maremane, and they graze primarily our pine forests and our, and the lands closer to the sea. And then there's, I have conservation land on my land as well, that's highly protected at the EU level, which is not necessarily an active management, but an important part of the farm's story and identity. And then there's a big part of also kind of education and tours and having people learn about what we're doing, right? And so that's where the agriturismo comes in. People can come and stay and have a vacation, but I also host courses and tours and workshops that focus on, you know, themes of regenerative agriculture and what we're doing here at the appropriate age level, right? We have students or kids who come who are in elementary school or even at, you know, in preschool. And we have university students who come and my hope is that as practices and systems, you know, as we continue, as I continue to farm, essentially that I can share what we do with more people. And that's why part of the business development is also around now actual products, right, that people can buy in terms of our rice, but also the next step is a farm store. so that you don't necessarily have to spend the night here or participate in the agriturismo. You can stop by the farm store on your way to the beach or if you're going through the area and taste the products that we grow. In terms of farm economics, how has it been for you then, this transition to organic and regenerative agriculture? It's a big topic, obviously it's important. to be able to prove that there's a working business model there to convince more farmers to do it. So how has it been for you? Yeah, it's been, I'd say overall in the past 10 years, apart from some years that were, you know, for example, we had drought in 2017 and it was massive crap failure all around. It's been overall profitable, right? And I think it's important to keep in mind that the business model relies on diverse income streams, right? And so there's the, I sell the primary materials or the raw kind of materials, right? I sell rough rice, I sell wheat, I sell a variety of different crops. I also sell branded products and have my own kind of distribution networks. But I'm also working now on selling meat. instead of calves, which was what the cows originally were, what I was originally selling. And then all the aspect around the agriturismo and the tourism income is not the primary source of income for the farm and not the secondary source either, but an important part of the diversification of our income. that does help to sustain us in years where we do have problems with crop production. I'm going to ask you one last question that I always ask. Yeah. It's like if there's one key message you would like every listener of the podcast to come away with. Yes. The one key message I think is important for people to come away with is one of hope, right? And one where we know that we can scale up regenerative techniques. and make change in our food system. I think that's my key message because a lot of people, I was surrounded by people who told me I would fail and I wouldn't be able to do it. And by taking one step at a time, change happens. And I want to believe and I want listeners to believe in a better future. That was fantastic. interview and farm visit I learned so much with you today so I'm so pleased that I you know I got to to do this with you I really hope and think that the listeners of the deep sea podcast will be grateful as well so thank you so much for that oh it's been wonderful having you here and I've loved talking with you and showing you around the farm thank you so this is it this is the end of our episode with Ariane Lotti from Tenuta San Carlo I really hope you enjoyed this episode. If you did, and if you enjoy listening to the Deep Seed podcast in general, please support me and support my work by simply following the Deep Seed right here on your favorite streaming platform. You just click on the Deep Seed page and then click on the subscribe or follow button. Thank you so much in advance and see you very soon for more regenerative stories on the Deep Seed podcast. Take care. Bye.