- Speaker #0
Here is a non-exhaustive list of things that regenerative farmers provide for us. Clean air, clean water, healthy soils and beautiful thriving ecosystems full of biodiversity. And yet, in most cases, they are not being properly rewarded for these crucial ecosystem services. And that's an issue that my guest today, Nicolas Verscure, is trying to tackle through his cooperative Cultivae. by creating local regenerative supply chains and creating additional value for farmers who improve the health of their soils. Nicolas has been working in the regenerative agriculture space for several decades as a farmer, as a farm manager, and as an agronomist, and more recently as the co-founder of Soil Capital and Cultivay. His knowledge and experience are really quite impressive and I took the opportunity to revisit some of the core principles of Vrijenak with him. And he really gives us a deeper, more honest and realistic view on these principles than we've ever had on the podcast before. So even if you're already familiar with the topic, it's definitely worth a listen. And that's only a small part of the conversation. We also get really deep into a conversation about creating more value for regenerative farmers. This episode was made in partnership with Soil Capital. I am your host Raphael and this is the Deep Seed Podcast. Hi Nicolas, thank you so much for joining me today on the Deep Seat podcast. I would love to start the conversation really strong and ask you this question. If there's one key message that you would like people to hear today, what would it be?
- Speaker #1
I think that it's time... For the farmer to be properly valued for what they do, not only in the farming ecosystem, but at the community level, at the country level, in terms of what we say in economy, positive. externalities in terms of health of people, health of the environment, biodiversity and everything. So I think this is really something that is undervalued today that we need to continue to explain to everyone around the farmers.
- Speaker #0
Why do you think that is? Why are we not valuing farmers as much as they deserve to be?
- Speaker #1
For me, the biggest reason to that is that we have considered the farmer. in this industrialization as an industry. And the farmers and the farming in general is not an industry. We are more than any other sectors working with nature. working, feeding people. And so it's a very complex sector that is not really comparable to an industry, an industry that is transforming a product A into a product B. Farming is about cycle, recycling, and about bringing a lot of other value than just producing a product to the community. And I think that this has been forgotten. putting the farmer in in a box of a productor we say in french exploiter agricole so farmer is like a tool or like a mine. And this was done not with a bad purpose. Again, this has been said in your podcast several times. After the Second World War, it has been asked to the farmers to produce, to feed the nation. And so they've been really in an industrial rational and systematic mission.
- Speaker #0
I think I understand what you're saying here. We've been considering and treating farming as a purely extractive activity in the same way we consider mining coal, for example, from a coal mine, where the farmer's only purpose is to mine the soil and to produce food from it. But actually, farming is a lot more than that. Farmers are the interface between... between society and the living world. And the work they do also impacts the climate, it impacts biodiversity, it impacts water cycles, the landscapes that we love to see when we go on a walk in the countryside on the weekend. And so farmers are not just a productive tool that is there to be squeezed as hard as possible so that it can produce as much food as possible for as cheap as possible. It's a lot more than that, and when not...
- Speaker #1
at the present time considering enough all of these other benefits of farming activities on society on the planet on the ecosystems yes yes i think so and uh and i don't want to be fighting for the for the the image of the farmer i want to fight for the profitability of the farmers how they they get paid for what they do the farmer have been losing significant part of their share in the value chain and that's also something that uh believe actually together with a certain number of agro industry we discussed with that we we need to rebalance a little bit because yeah for me this is core if we want to talk about transition okay so when you say
- Speaker #0
say rebalancing you mean there's the total value created by the entire supply chain and maybe the value the part of that value that goes to the farmer is not high enough when
- Speaker #1
when you analyze that uh in different value chain you will very quickly discover that the costs of the farming activity in the final product of many different products i'm always using the the case of the barley in the beer because we like that in Belgium. But the barley costs in a beer is ridiculous. And this can...
- Speaker #0
Ridiculous how?
- Speaker #1
If you take one liter of beer, the contribution of the barley cost into this liter of beer will be around... 2 to 4 euro cents per liter of beer. Think about the value of a liter of beer. I let you make the calculation and realize how small this is. I used to say that it's of course disappointing news for the farmer to realize that actually his contribution into the value chain is nothing. But this is also an element of optimism, because it means that rewarding the farmer properly or significantly higher, depending on what... the good he's doing to the planet, to the soil, to the community, is actually not as difficult as we intend to think. I see.
- Speaker #0
If you look at it this way, if the farmer is getting such a small share of the final value of the product, paying the farmers a lot better, let's imagine twice as much in the case of barley here, would mean that the total costs of producing that litter of beer is only two more cents. Right? It goes from two cents to four cents if I'm doing the math right. And so there's a real opportunity there to actually reward farmers who farm in a way that is taking care of nature, ecosystem, the soils, biodiversity, and all of these things that we really need.
- Speaker #1
Exactly. And you know, I'm not saying that again, to negotiate with the the rest of the value chain and to say okay we want more money i am really convinced that things have to change in farming. So there is a lot to do, and we're going to talk about that when we talk about region ag. So it's not that the farmers would be rewarded for just the fact that he has been doing hard work for the last 30 years and so on. No, it's about the future. And I think that if there is a possibility in the market... to my view, to reward properly the farmer for the change he will bring, to incentivize also properly the farmers who are not convinced that they should change without automatically asking to the consumer to pay a huge contribution or to increase drastically his spending. Of course, beer is an extreme case where this cost of the farming part is very small. But if you look at the bread, for example, if you look at the other crop, you will most of the time realize that the farmers contribute. into the final product in terms of cost is small. And that's actually, if the farmer increases cost or the value of his product to the first buyer in this value chain, the reflex of the buyer The first one and the next one would be to take a margin on the premium that the farmer would receive for the change he's bringing. The first buyer will probably take a margin as he do for normal price on top on this premium and the next one will take a margin on the margin. And so if we are not really careful about keeping this premium. in the pocket of the farmer and avoiding to inflate this premium, an increase of price for the farmer will always end in a quite important increase of price.
- Speaker #0
the consumer and the different you know if you understand yeah i i think so i think i understand can i maybe try and re-explain this with my own words just to see if i understood this correctly so when a farmer is producing food in a way that is regenerative or organic or both the farmer is making an extra effort and is taking extra risk and therefore it makes sense for that farmer to sell their produce with an added premium So let's take an example. I'm going to use completely made up numbers, but just to make the point, right? So let's imagine a farmer who's selling a product for one euro. and decided to add a 20% premium because he or she is farming in a regenerative manner. So that farmer is now selling the product with a 20% premium at 1 euro and 20 cents. So you would think that the final consumer buying that same product at the supermarket at the end of the chain would pay 20 cents more. So that premium from the farmer. But what actually happens is that ... every step of the value chain inflates that premium. And so the final price for the consumer is really high, a lot higher than the 20 cents added value for the farmer. And that makes the product much less attractive and that creates a lot less traction in regenerative products and farming. And same thing goes for organic. Is that sort of right?
- Speaker #1
Yeah, it's exactly what I was trying to explain. So. The conclusion of this simplistic calculation, which is a reality, is that the consumers say, or people, we say, very nice what the farmers are doing, very nice this concept of regenerative agriculture or organic agriculture, but too expensive. Only the rich or the richest part of the community is able to afford it, which is actually not true. If we look at who has made... the change and the effort and has taken the risk. The rest of the value chain will definitely have a little bit more cost to isolate the batches of grain, to communicate, to certify, whatever. But nothing compared to what the farmer has. put in terms of risk effort investment yeah so the big share of this premium if we call that the premium should go back to the pocket of the farmer obviously without impacting too much the consumer yeah yeah makes a lot of sense
- Speaker #0
I definitely want to come back to this later in the conversation and talk about Cultivay, your cooperative and the work you're doing in creating these regenerative supply chains here in Belgium. But before we do that I'd love to rewind a bit and talk about regenerative agriculture. So, about a year ago when I started the podcast, the first two or three episodes were really about explaining what is regenerative agriculture, what are the key principles, what are the advantages and the difficulties and challenges of region ag. And since then, we sort of went into a lot of different directions, talking about different aspects of this. this topic. But since I know you have a really huge experience in regenerative agriculture, you've been working in this field for several decades as an agronomist, as a farmer, as a farm manager in a lot of different countries and continents even. And I thought it would be a great opportunity to... to go back over basics very quickly but sort of talk about regenerative agriculture and the key principles and then use that as a as a base as a stage to then go deeper into how we create new supply chains and new value for regenerative products and why doing that is important so yeah maybe you could give us a little five to ten minutes crash course on What is regenerative agriculture and what the key principles of RegenAg are?
- Speaker #1
Okay, good exercise. Of course, I would start by saying that regenerative agriculture is an agriculture that is restoring soil health, biodiversity, water cycles, in agriculture, in the context of agriculture. I would probably add a link to what I... what we already discussed that regenerative agriculture or part of the definition of regenerative agriculture should also be to restore or to regenerate the the place where the farmer is in the community and also regenerate the the value that the farmer is supposed to receive from the value chain. So I would probably...
- Speaker #0
That's really interesting.
- Speaker #1
Yeah.
- Speaker #0
So it seems like everybody has a bit of a different definition of what regenerative agriculture is. And what I tend to hear a lot is about, okay, it's about regenerating soil health, for example, instead of degrading it. And ecosystems, biodiversity, all of these things. But I love that you bring in... different concepts here. One is regenerate the farmer itself, its well-being, its place in the community, probably also physical mental well-being included in that, and regenerate his financial well-being. his ability to sustain himself and to take care of the ecosystems we all depend on.
- Speaker #1
Yeah, I think that is an important component. And just while you're saying that, when you realize that a very big proportion of the value today that the farmers are creating is not coming from them, it's coming from the subsidies. Just from a mental perspective is also a... For me, a problem, a motivation. I'm not saying that we should suppress that tomorrow. I already had some criticism when I said to a journalist who was asking me, what do you thing about the subsidies, I took it for myself and I said, okay, I think I should try to live without the subsidy and that the farmer should develop a strategy without taking into on the subsidies because I think it's healthier to live from your own work than work living out of money that is given to you by the EU. So I would say that my personal advice for a farmer in private, we are not in private, would be to say, okay, let's try to develop a strategy for your farm to not be too dependent on these subsidies. I think that this is an important component for the motivation. motivation of the farmers, because the moment you feel that you actually are leaving out of your own work, that the value you have in the bank account or the money you have in the bank account at the end of the year is coming from your own creativity, own work, it's really rewarding and important. There is also another component when we talk about while we talk about the economy is that When you look, of course, some farmers are buying big tractors and this can be an observation from people from outside. I see big machines, I see big tractors, I see... and I don't have that. My first comment... I think that it's important to see what's the level of leverage of a farmer. I would be very surprised to understand that all the big machinery and all the big stuff we see that farmers are working with are owned by the more by the banks than by the farmers. That's one thing. The second thing is that you probably have to put that into the context of the value of the investment. So if you look at the farm. The value of a farm, the value of the lands, and if you just make the, you calculate the return on investment that the farmers are doing, you will realize that it's nothing. And when we talk nothing, it's between 0.5, 1%, 2%, 3% in the best cases. And ask to a banker or someone from the Silicon Valley, whatever, he would invest in a business with a return of 2% or 3% with a high risk, depending of market, depending of weather, they will have lots of people saying, no, no way, impossible to... So this is also a reality that we have to face. talking about value and finance. Sorry to talk about that because that was not the purpose of the podcast. But the economy of a farmer for me is becoming more and more of a central discussion, central point. Yeah.
- Speaker #0
But I think it's great that we're talking about the value and I'm really happy for that to be one of the central topic of discussion today. So that's great. Just going back to regenerative agriculture, could we maybe just discuss quickly the key principles? What does it mean, regenerative agriculture? What does a farmer have to do has to change to be considered regenerative?
- Speaker #1
So first principle, we try to minimize the soil disturbance, the tillage. In many of my experience, this is something that is implementable in different countries, different weather, again, different crops. So decreasing the number of passes, decreasing the aggressivity of mixing the soil, the different layers of the crop. to the soil is what we are trying to do okay it doesn't mean that we don't want to uh to work the soil i think that in in a certain number of cases this is possible to really stop touching the soil or nearly this is what we call the direct seeding zero tillage but in many cases unfortunately we still have to touch the soil to till the soil most of the most of the time because the mechanization we are using to harvest or to do the different operation that follows this the drilling, the seeding, is actually impacting the soil structure. And so the tillage is an artificial way of restoring the soil structure. And I haven't seen today, unfortunately, examples of a soil that is so healthy that it could restructure itself without any tillage after a few passes of... heavy machinery for the harvest. So first principle.
- Speaker #0
So tilling, just to clarify, so tilling is when you really take the soil and you break it up into plowing,
- Speaker #1
tilling.
- Speaker #0
And it has advantages, like you said, for the soil structure to make sure the plants and the seed can grow in that soil, right? And the air and water can infiltrate and the roots have space to grow and all of these things. But at the same time, it's quite detrimental to soil health.
- Speaker #1
Exactly. So the tillage is known to be an activity that is not helping the soil microbiology and the soil animals life to rebuild itself, to thrive. So we try to minimize that. And it's important to say that. During these last 25-30 years we've seen a certain number of cases of farmers who were trying to implement or to apply this no tillage principle too dogmatically and i think that it's important to mention that because uh this can lead to uh some some some failures and uh in certain geography with certain weather and certain crop this has been not a disaster but people had to to go backwards because this pure principle of not touching the soil was not possible.
- Speaker #0
Yeah, so I see. The dream scenario would be that your soil is so healthy and the structure is so amazing that you could plant your seeds directly into it without tilling. But it's almost never truly the case that farmers can do that. And so there's different levels of how much. tilling the farmer can do. So by reducing the number of, you said the number of passes, the number of times you till a soil per year, reducing the depth also?
- Speaker #1
Yeah, the depth, the intensity, the shape of the blade you use to avoid actually the different horizons of the soil to be mixed, trying to keep the residues on top of the soil and not having the soil naked and make the residues of the previous crop integrated in the soil. Those are all very valid principles, but they are principles, they are not rules.
- Speaker #0
So the idea basically is to try and disturb the soil as little as possible, so that the microbial life can thrive. that we have the earthworms and the mycorrhizal fungi growing all these things and they're really really important for soil health and we're trying to disturb that as little as possible but we still need to our crops to grow without being dogmatic and having your shovel to
- Speaker #1
check if you're if you have compaction in your soil and if the soil life is not able to rest to restructure that unfortunately you have to help this community or
- Speaker #0
to accelerate that regenerative transition and that's the reason why i'm a big fan of soil capital and i'm really proud to be partnering with them for the deep seed podcast okay so moving on from soil disturbance and tillage to yeah so second principle is uh the
- Speaker #1
fact that we uh like to have the soil covered with living plants all year round so that's the the goal Practically, this means that in RegenHack, you should try to have a crop or what we call a cover crop between the cash crop in your fields, living, thriving, growing in your fields all year round. And that's, again, a principle that has to be adapted because... In the real life, when you have harvested your field, you need some time to apply compost, to do some weeding to avoid to have too much thistles or other grasses. If you want to reduce your herbicide consumption, sometimes the mechanical work will be necessary to control those weeds. So, Practically, between two cycles of crop or after one harvest, you have sometimes a few weeks of soil without coverage. And that's something in a certain number of cases we should accept. What we are trying to advise to integrate in many of the farms we work with is to integrate what we call a permanent or semi-permanent pasture. So in a rotation. with the different cash crop and the different cover crop between the cash crop, we're trying to integrate every 10 years, one or two years of pasture. So a moment where the soil is not touched, is fully covered with the pasture, that seems to be very efficient to give a boost of health. to your soil in organic agriculture this is also a moment where we can produce nitrogen if you if you cover your soil with legumes to produce some some nitrogen for the next crop so that's the second principle soil coverage yeah um
- Speaker #0
Yeah, yeah, I see. When you're talking about these short periods of time between crops, where sometimes you have to keep the soil bare for a few days or a few weeks. But the reality is that when I'm driving through the countryside in the winter, almost everything is bare. All of the farmland that I see is actually bare. And what you're saying here is that... you should avoid that as much as possible and you should have your soil covered at all times with a living plant with a living root in the soil. So maybe you could explain why that is so important?
- Speaker #1
The reason for that is actually there are multiple reasons for that to be. To be short, you have to see a field that is green, like a solar panel that would produce electricity. So a field that is green means that it's a field where you have plants, crops, who are active with their photosynthesis, meaning that they are producing, transforming the sunlight into sugar and the sugar are feeding the plant, but also feeding the soil. And they are producing biomass, they're producing potential food for the soil and the next crop. So each time you see a green field, it means that this field is active. If you don't have that coverage, if you see a brown field, this means that the soil is not covered with plants, not... no photosynthesis, and therefore no activity. The field is not active, the soil is not regenerating, the microbes in the soil are not fed, and this is a soil that is actually, in the best case, in a standby situation, but in most of the case, in a potentially phase of degradation, because on top of the fact that it is not photosynthetically active, is not also covered and protected from the rain to erosion, from the wind to erosion. And so this is a soil that in most of the case is losing fertility. So that's the basic principle of a soil to be covered with living plants.
- Speaker #0
Right, yeah. I remembered something I learned in a previous episode with a soil scientist. We were talking about mycorrhizal fungi. So these are like the mushroom... networks in the soil that connect with the root of plants, right? And they're really, really helpful because they can go very, very far away from the plants and collect nutrients and water and whatever the plant needs. So they're super charging the soil fertility and health, right? And I remember she explained that those fungi, they cannot survive without a living root. They need a living root as a companion to survive. And so if you leave a soil bare for too long, I guess. they cannot survive on your field and you lose all of them. Another good reason to keep your soil covered at all times.
- Speaker #1
That's clear. I'm not a soil scientist and I'm not sure that they can't survive. at all, but it is clear that you will not go in the direction of development of those mycorrhizae. And the first principle tillage and the second one soil coverage are both principles are actually important for those mycorrhizae because the tillage is actually also damaging the hyphae, so all the branches of those fungi.
- Speaker #0
So in the case here of soil coverage, it sounds like it it has only benefits. It's protecting the soil from wind, from rain and erosion. It's producing a lot of photosynthesis, which is feeding the microbiology in the soil. The roots are growing everywhere in the soil, so it's helping with soil structure. I mean, it seems to have only benefits. What's the reason why you don't see that more in the fields out in the winter?
- Speaker #1
Those benefits are coming with a lot of challenges. I was talking about slugs, for example. Slugs love to have fields or soil covered and protection to survive and to to multiply so the first risk a farmer would see or not the first but one risk a farmer would see having a soil that is covered is the is the slug problem is okay this is i'm actually multiplying a pest here so the next crop will be very challenging because you'll have all these uh little slugs willing to eat my life my crop. So that's the first thing that is popping up in my mind. The second thing is a very simple challenge. How do you seed, how do you put a seed in a soil that is not clean and bare like the well-plowed fields? And we say in the common language, a clean field, a clean soil. How do you put a seed in a soil that is covered with a lot of residues. It's technically more challenging. This is also a bottleneck for a farmer who, as you said, the common sense would push him to cover his soil, but there is a technical challenge, meaning that probably these farmers have to invest in a new machine that is able to cut the residues and to properly produce. put the seed at the right place. So that's one thing. There is another important challenge is the soil temperature. In our countries, in the North, compared to Latin America and in the South, soil temperature is, a is a driver for the start of the crop for the germination of the crop so covering a soil with a lot of residue and having a seed that is supposed to germinate in this soil could be challenging because this this soil will always be a few degrees lower than a soil that is bare and so you will face in certain circumstances crop that are not germinating and not starting as well in the soil that is covered and cold compared to a soil that is plowed and hotter so that's another challenge just to give you a few yeah that's that's great that's what i wanted to know like yeah i
- Speaker #0
hear so much about the benefits and i'm trying to understand what are the the challenges and that's the three of them and the price as well yeah and just to be clear and we will not go into the details but those three first challenges
- Speaker #1
We can tackle that. The slugs, you can organize your rotation differently. You can also disturb your slugs without plowing the soils. The soil temperature, you can also compensate the lack of temperature with a little bit of tillage in the line of the seeds to open up a little bit the soil. If you put certain micronutrients, you can also give the boost that the seed would have had with the temperature, but with a... more of a micronutrient. So there are ways to do, but I mean, this is more complex. And to your question, CK, why people not doing that? It's so obvious. This complexity and the risk going together with this complexity is a reason why everybody's not doing that.
- Speaker #0
Right. The complexity is really the key here. It's really complexifying a system and it means you have to learn new. concepts, you have to maybe invest in new machinery, you have to change the way you are doing things. That's hard by definition. Yeah,
- Speaker #1
that's not natural.
- Speaker #0
Makes sense. Okay. So yeah, we talked about the tillage and cover crops.
- Speaker #1
Yeah. Soil coverage, there is another principle that we are trying to develop again in different ways. This is the reduction of the agrochemicals, the the petrochemicals, all the inputs that you apply in the fields that are coming from chemistry or not chemistry, it is not probably the right word because everything is coming from chemistry, but that are based on petrochemicals. I'm talking about the mineral fertilizers and the pesticides. It is more and more clear that those products that we use to assist the crop to grow haven't been always developed with the idea to not harm the soil health. And so we are trying to minimize the usage of those products. For some products like the fungicide and insecticides, it's more obvious. We understand that we want to develop the fungi of the soil. If you apply fungicides on your crop, it is highly... It's probable that this part of this fungicide will be actually applied to your soil or will end up to the soil and probably will harm the fungi of the soil that you are trying to develop or the insect of the soil that you're trying to feed and to develop. So this third principle of regenerative agriculture is. Again, not in a dogmatic way, but trying as much as possible to decrease those molecules. On the fertilizer, this is also the idea. This is the other part of this group when we talk about agrochemicals. And we also understand that if you feed a plant with fertilizer, it's like feeding someone with a... McDonald's or fast food, it's very efficient, making people or plants growing fast. But it comes with a lot of potential problems, which we know with the fast food and on humans, you're going to grow fast and you're going to be fat fast. But you better have to be properly equipped with medicines to be resistant or at least to assist you. be sick. For the plant, we see the crop, we see the same. So a crop, a field that will be fully depending. on nitrogen and well fed with mineral nitrogen is a crop that will probably be more susceptible in terms of fungi, insects and so on.
- Speaker #0
It's a vicious circle. The more chemical fertilizer you use, the more likely it is that this crop is going to be susceptible. Weaker. Yeah, he's going to be weaker, his defenses and he's going to be more susceptible to have issues with... with fungi and pests.
- Speaker #1
Yeah, so on this one, practically what we do with our different project companies, we're trying to be very pragmatic with the farmers because saying that we have to stop tomorrow, it's very, again, dogmatic and drastic. There is a lot of way to reduce significantly the amount of pesticides. And the first way to do that is just to see how we can optimize the spraying. And it can be a bit shocking to talk about how to optimize your pesticide usage or application when we come with the hat of region ag. Actually, I was surprised and I'm still surprised to see how many farmers sometimes are not. understanding properly how they could reduce the quantity of pesticides just based on the quality of the water they're using in the sprayer, the weather conditions when the products are used, the way they are being advised to use these products, not by the seller of this product, by independent advisor. So all these things, we're trying to work with the farmers to see how can we leverage all different possibilities to reduce your pesticides. So, um,
- Speaker #0
Yeah, maybe it sounds shocking to some, but I don't think so. I think it makes sense. The idea here is to try and reduce the harm you're doing to your soil, to your ecosystem more and more, and over time regenerate that ecosystem so that it relies less and less on those products, whether it's the tillage and disturbance of the soil, whether it's with chemicals, whether it's with other things like that.
- Speaker #1
Yeah, you understand that, or you will understand that I'm really... but I know the experience, but I'm trying not to be dogmatic and extremist because this is this is working for a very small amount of farmers who are super convinced and motivated to take a high risk to go for it. pure regions of agriculture, ticking all the boxes 100%, but this is only a very small number of farmers in a small number of conditions. What interests me is how to get a bigger number of farmers, conventional farmers, how to translate those principles into something that is affordable for them. And what we've discovered, what we've experienced for these last years is that actually, when you give the possibility to a farmer some tools or some recommendation to make the first steps as we do with soil capital and the carbon certification as we do with Cultivae with this market for the farmers who are implementing region act practices the farmer at least will have a first taste of what it is to have a soil that is going in a better direction and then if you succeed there the pump is primed and things will happen much more positively, constructively and naturally.
- Speaker #0
I think it makes a lot of sense. As human beings we We hate change, right? We're really bad. We change. Changing what we eat, what we believe in, the things we do or habits, like changing anything for human beings is really hard. And so I can only imagine, because I'm not a farmer, but I can only imagine for a farmer who's been doing things a certain way their whole lives because this is what society has asked them to do, this is what's been advised by there. agronomists and advisors and so on. This is what their parents and grandparents were doing before them. And then all of a sudden you come to them and tell them everything you've been doing your whole life is wrong and you should completely change your whole system. It's probably not the best way to go and for very good reasons. And therefore if you approach things from the angle of well here is a small change you can make and here is an attractive reward for making that change. That's a much more attractive proposition, I think. And if things work out and if that change turns out to be positive for the farmer, then they might be inclined to do more and to go further in that direction. So that's why I think this is a really, really interesting way to approach things.
- Speaker #1
Yeah, it's an incremental thing. It's not something that you can... If you want to switch from convention to region ag, you're going to take a huge risk. But if you... Draw a line, say, okay, I'm going to go step by step in the next five, seven years. It's much more natural and you're going to make this transition with much less risk. And the last principle, because we were still on the principle of region ag, is what we call the diversification or the context-specific design. We understand that introducing diversity in your system is bringing resilience, not only for your finance, but also for your soil health. And so, increase the duration and the number of crops you produce. Introducing a perennial crop once every 10 years, 15 years, trying to...
- Speaker #0
Sorry, what do you mean by that, introducing a perennial crop?
- Speaker #1
Sorry, yeah, this is what I was referring to, the grassland, the pasture. So introducing a crop that would stay more than one year and that is not an annual crop. Actually, I don't think we call that a perennial crop. A semi-perennial crop, something that will stay. Or sometimes a perennial crop when you talk about trees, for example, which is a bit more extreme. Agroforestry is a way to diversify. It's still very unknown. and risky. But introducing grassland for one or two or three years into your rotation every 10, 10, 15 years, this is not something that is very risky. well understood and easy to do. There is maybe the financial part that you have to manage because you're going to lose some productivity, some profit. The introduction of animals, this is also something that many of your previous speakers have mentioned. So in many geographies, you have some herbivores that you could bring to the land, again, once every five, 10 years to have some something grazed on your land is definitely something that is bringing value. So all of this, we put that, I put that in the box of diversity, which is the last principle of today's region.
- Speaker #0
So usually the farmers you work with, what... motivated them the most to make that transition?
- Speaker #1
In general, a better remuneration. They want to have a better price for the crop they're producing. And this is a driver for them. together with the fact that they are also proud to see where the product of their productions are transformed and what they're going to become having a farmer again talking about the beer producing barley, knowing that the barley is used to produce those different beers, Bertin Champ, Valduc, Brussels Beer Project, beers in Brussels, and then touching this product is also something that is important for a producer.
- Speaker #0
I can imagine that. I mean, yeah, knowing that all the hard work you put in to grow this is going into making a final product that is... that is of such quality and that people will enjoy very much must be much more exciting than than you know knowing that it goes for feeding animals or for biofuel for example yeah and even for food the link has been lost and so the farmer producing
- Speaker #1
even milling wheat today in the center of france they don't know where the wheat will will end up and then the flour so having this link transparent and clear for the farmer is an important as well an important fact the other fact is that i think we see more and more farmers concerned about how their soils and their system is evolving so now that we can measure a little bit more then there is more communication about soil and how the soil works and what we should have done and more and more farmers are much less opponents of this and much more open. It's like, yes, but that's something that makes sense. So those are three reasons. So the link between the consumer or the product, final product and the farmer, the financial rewards and the fact that it makes sense for the operation of their soils for the future.
- Speaker #0
Let's talk about Cultivay because we mentioned it at the start of the conversation and we referenced it a few times since. Maybe you could tell us a little bit about what is Cultivay?
- Speaker #1
So Cultivay is a cooperative we created seven years ago, I think, when we actually realized that having implemented region act practices in a certain number of farms in the region here in the center of Belgium, having achieved savings using more efficiently our pesticides, reducing the tillage and reducing the fuel consumptions. So having basically achieved 70% of the potential of the savings and the cost benefit of those transition. And having also spent a lot of time investing in new practices, taking risks to develop that, to adapt that to the region, we were still selling our crop and our clients were still selling their crop in the same channels as a conventional farmer. And so we, as agronomists, consultants, farmers, we should develop a different link. between the farmers and the consumer and between the regenerative farmers and the consumer. We should try to create some value also. And so we very simply decided to talk with a few small craft breweries around us because there was a development of these new industries in the region here. So I asked guys if you would be interested or not to have local barley produced with Regenac principles. And very quickly, we had one or two guys interested to do that. There was a brewery close by here called Valduc. Another one also was very interested. And so... We started selling them a few tons of barley to produce beer. We had a collaboration with Moultrie to do that. And actually very quickly we understood that this was a good way to go because there was a certain traction from other breweries. The malter between the farmer and the brewer that we were working with, Bortmalt, was also interested to continue to develop this idea. And we had actually one employee of this big maltery, Bortmalt, who was really interested to understand about regenerative agriculture. There was a personal interest into that. And Alexander... decided to try to advocate and to speak to his clients who were buying molds, so the brewers, about Regenac. And he did a good job and very quickly we went from 30 tons the first year to 100, 200, 500. And now we're going to produce a few thousand tons of regenerative bonding. And this was actually the beginning of the cooperative. In parallel, we also realized that producing and storing barley or cereals to sell to the industry is also something that you have to do professionally. You can do that. You can do one trailer and store it in your warehouse. That's no problem. But if you have to store more, you have to build infrastructure. That was one important... conclusion from the beginning so having the facility to do that second important observation is that you can't do that alone one farmer as we were doing at the beginning we were just working together with one friend nicola again producing this barley for one brewery You can do that one year, two years, but the day we don't have the quality to deliver, you have a problem. And so the idea of collaborating with a number of farmers to de-risk this project and also to ensure to our growing brewers that we're going to have the quality year after year and that the day they're going to print. on their stickers that it's local regenerative barley used for the beer, we will be able to continue the production every year. So that was an important factor to scale, is to put farmers together, not only to share that with many farmers and to have a bigger impact, just for the security of supply and quality. So that was the two elements. we faced when we started the cooperative.
- Speaker #0
And so how has it gone so far? How many farmers do you have now in the cooperative?
- Speaker #1
Today, as I said, we increased the volumes to a few thousand tons. We're going to reach 10,000 tons soon of production. And we've been very surprised because we've developed storage. and sorting, cleaning activities as well. But those infrastructures are not big enough. So we are partnering with other merchants or corporatives to use and death farmer also to produce for the different industries we are working with. So the barley was the start, but we also for the last year developed partnership with other. industries, agro industries. So we now work with people who are using wheat for the flour and the bread. We are working with people using oats to do milk. We are also working with people who are using spelt, rye and different...
- Speaker #0
So there's some connections being made with other actors trying to do something similar to you, but in different fields with different crops and this sort of synergies between you.
- Speaker #1
Yeah, and I think it was the first idea is and was to enable a regenerative farmer to value not only one crop, but several crops into dedicated value chain. So that was the first idea. The second idea was also to bring. to the same table a certain number of agro industries and hopefully this is not completely materialized today but to create some synergies and some common way of measuring regenerative agriculture defining a premium for the farmers and to have that together with these industries and not having danone that we work for for example would define a certain framework and having a Puratos, we work with them as well, would define also another way of measuring and a different way of to be in relationship with the farmer. So the cooperative wanted to try to make the link between those different agro-industries and the different farmers and the different production. That was also an idea too. to try to to contribute to certain harmonization of the way we we reproduce the way we build those those value chain okay and we're working today with a little bit more than 100 farmers so more or less the footprint of the the cooperative would be around 10 000 hectares today 10 000 15 000 hectares yeah
- Speaker #0
It's been exactly a year now since I started the Deep Seat podcast and I can't believe how many amazing conversations I've had and how much I've learned in just one year through these conversations. And I wanted to say that I'm extremely grateful for all of you who keep coming back week after week to listen to the episodes. We now have over 2,700 subscribed members. on the different platforms of the Deep Seed. And that's just amazing. So thank you so much for that. And if you're not subscribed yet, but you enjoy listening to the Deep Seed, you would like to support my work. Well, that's actually super easy. You can do that in five seconds. So whichever platform you're using right now to listen to this episode, just click on the Deep Seed page and hit the follow or subscribe button. And that's it really. So super easy. Thank you so much in advance. Really appreciate it. And, uh... Enjoy the rest of the conversation. At the beginning of the conversation, you were telling me that you want to create more value for regenerative farmers and for regenerative products. Is that something you've been able to achieve so far with Cultivay?
- Speaker #1
I would say we're trying to reach 100, 200, 300 euros per hectare of additional value. This is just an idea that I give you because depending on the different crops, organic, not organic, it can vary. In my view, we are trying to be at least at the level of the subsidies, just to link this to the discussion we had about the subsidy at the beginning of the...
- Speaker #0
So the farmers that you work with, and yourself included, have really seen the value of your production increase and your margins increase, right?
- Speaker #1
Yes.
- Speaker #0
That's the whole idea.
- Speaker #1
We should measure that better. But the goal when we discuss with the farmers and the agronomists about... the prices to increase the value in this range the other aspect is the volatility of the price we're trying to decrease the volatility of the price for the farmer because we believe that this is also very damageable actually for the old value chain to have a wheat at 150 euro today like it is the case and a wheat at 350 euros one year and a half ago with this huge difference of price. It's very difficult for a farmer, but also for an agro industry to build long term plan. And so what the other aspect on top of the better price compared to the market that we're trying to bring in this value chain is a stability of of price.
- Speaker #0
How do you achieve that?
- Speaker #1
So it's easy. We're trying to through mechanisms of average price to see how we can set a price that is not the top premium price that we can have once every 20 years, but also not the lowest price we can have every five years. And so we're trying to have a price that is in between.
- Speaker #0
So that price you negotiated with the buyers in advance for a long period of time? Is that how it works?
- Speaker #1
Most of the time we negotiate the price every year, looking at the historical price of the last years in order to be sure that we will be always above average with this additional premium that we were talking about. And we are exploring different ways of making this average price fitting with what... what farmers need and what the industry needs as well. But we are systematically having a discussion on price stability.
- Speaker #0
Okay. Yeah. How do you measure and monitor the performance, the regenerative performance of the farmers and the farms and the crops? Because I'm guessing you're going to your customers, explaining the methods you're using, explaining the improvements it makes in biodiversity and soil health and all of these things. How do you sort of measure, quantify that and communicate that to your buyers? I think that's a great question.
- Speaker #1
That's an important part. We have developed a framework, a regenerative agriculture framework that is actually registered now at EU level. This is called regenerative agriculture certification. And we have developed that for the different crops we produce. And this is a framework that is measuring what the farmers are doing or not doing. and we have in this framework different stages that is actually classifying you the farmer as a beginner as a intermediate or as a full regenerative farmers we use a mix of different ids that we found in the markets and in other certification projects to develop that and this is a way for us to measure what the farmers are doing also to link to this the incentives and the premium we give to the farmers but also to reassure the buyer that the farmers are doing stuffs and they're changing practices what's very important for us is also to see that the farms are moving and so we are in our contract we are also asking the farmers to change from one one stage to another if he wants to stay in business business with us Another metric that we are using since Solcapital developed that is the carbon footprint that is part of this framework. So we have a set of practices but also we are measuring the carbon footprint of the farmer because we feel that this is a good metric on top of the practices to understand with a more granular way where the farmer is with the figure harmony. tons of carbon are you emitting how many tons of carbon are you able to sequester in your soil and we are also so certifying that true soil capital in order for the buyer to use that figures to integrate that figures in their carbon accounting what we call the scope tree and so some buyers are coming to us because they know that they're going to be able to use the the real carbon footprint improved carbon footprint of our farmer in order to decrease their carbon footprint at the level of their industry. So this is also a way to have attraction.
- Speaker #0
That's a big incentive from industry at the moment. So a lot of them, they're trying to reduce their carbon emissions. And so the idea here is that regenerative farmers, instead of emitting carbon sequester carbon in the soil, and through soil capital, you can sort of certify how much.
- Speaker #1
Measure and certify. Yeah.
- Speaker #0
And that's another extra incentive for those buyers to buy those products, those ingredients in the first place, because they can then use that in their carbon accounting.
- Speaker #1
Exactly.
- Speaker #0
the core driver for the industry to buy regenerative? Or is there a real interest growing for regenerative story for the regenerative principles?
- Speaker #1
There is a real interest for the regenerative story. That's clear. I would say that it's not general. I would say that still maybe 10, 15, 20% of the industries are understanding and willing to go into that. But we see more and more traction. And it's difficult to say between the carbon footprint measure and certification and the RegenAg plus CO2 certification what's more attractive. I think that some industries are coming for both, other are just coming for the scope three because they are pushed by their shareholders, management, whatever. to calculate and to reduce um i think that what is interesting is that with this carbon accounting is that we are able to make those industry understand that actually the farm farmers can reduce their share of the carbon footprint, but also go beyond that. And when we have a barley that we deliver to Bortemal that is able to reach the malt tree with a carbon footprint, which is close to zero, this is much more than the 30% reduction that an industry like this one is aiming.
- Speaker #0
It's massive.
- Speaker #1
Yeah, it's massive. And so this is also an exciting moment. where you say, actually, the farmers are not only contributing their share because we want to reduce by 30%, they are going beyond that. And so this is what we are trying also to be the leader in the market here in Belgium, say not only to reduce, but to go beyond this mandatory reduction and trying to also to influence or to inspire the other cooperative and industries say, look, this is really where the farmers are part of the solution for you.
- Speaker #0
So it's a huge lever in the food industry, right? Because a really big chunk of the carbon emissions from the food industry come from the farm. Yeah. So I hear. Yeah. Sometimes as much as 80, 90% I heard.
- Speaker #1
Exactly.
- Speaker #0
And so there's not a whole lot of other options, but to produce differently in a way that doesn't. emits so much carbon, but instead pumps carbon from the air through photosynthesis and stores it in the ground. And that's sort of what regenerative agriculture does.
- Speaker #1
Yeah, there are solutions to today. And you go to the offset market and you buy carbon credit to projects outside of your value chain to balance your emissions. But what we're trying to explain to those industries is that it's much more clever to try to inset. your emission into your own value chain with your own farmers. Because on top of ticking the box, I've reduced my carbon emission. You are making your farms, your farmers more resilient, your soil richer. So this is an additional advantage for the future. It's not that you're making the soils of a certain country richer that is not linked. to your value chain. It's within your value chain that you are making this effort, which is strategically important. And also the fact that they are reconnecting with the farmers. And it seems quite interesting to see how disconnected I was at the beginning of the podcast talking about the farmers who doesn't really know where the grain is going, to do what, in what industry, what product. But this is the same in the other direction. There are many. industries because of these different stakeholders and because of the community ization of the market that doesn't really know which farmers are producing for them, which is also kind of disappointing. So when you put the farmers in the industry together for a barbecue in the barn here and they start discussing, it creates also something that you can't put in an Excel sheet, which is motivation, inspiration, reconnection, which is an important fuel of this. project and change.
- Speaker #0
That's amazing. Yeah, I want to see a lot more of that connection between the different parts of the chain. It's true. I mean, I guess if you're sitting in an office, and you're just, you know, working on marketing for your product on the shelf, whatever that is, and you have absolutely no connection to the rest of the chain and to the farmer and the work it's doing, and the actual product that's coming out of his field, it must be it's something is lost there, right? And the same way that if you're a farmer, and you work so hard to produce this and then it goes out in the truck and then that's it. You have no idea what happens to your product next. That's not very motivating either. So reconnecting, recreating connection, this is a big part of your mission.
- Speaker #1
I had one discussion after a meeting with this molter and I was with a guy who was selling the molts to the brewers. I was with them in a meeting to sell the molts to the brewers and I just explained about regenerative agriculture. And the guy was with me selling the malt to the brewer. That was apparently the first time actually I was making the pitch in front of him and talking about Raising the Nag and say, Yeah, this is incredible because actually all what you said. So I'm practicing permaculture in my garden during the weekend. But this is permaculture on large scale. I say, yes, more or less, this is the same principle, the same idea. But it is crazy. So now I can say that I'm doing permaculture in my work. I was ashamed to talk about what I'm doing in my garden to my colleagues because I thought it was a bit crazy or too ecologist, whatever. Now that I realize that I'm doing indirectly, but with you at my work, what I love to do in my garden in secret during the weekend, it gives me another perspective for my work, like as a commercial. So this kind of thing, For me, it's also a very important, crucial element of this change and this regenerative value chain. That's amazing.
- Speaker #0
If you had a magic wand and you could magically change one policy or part of the subsidy system, what would you choose to change?
- Speaker #1
I think that, as I said before, there is not enough understanding from the agro industry and from the farmers and from the consumer of this contribution of the the agricultural product in the final product in terms of cost so i think that having some money to transparently make the the different stakeholders aware of the fact that you know it shouldn't cost that much to pay the farmer properly to be rewarded to change and to transition into region ag i i would i would try to use some money to to make that clear and again this is not the different people against them the farmers against the industry talking with the industry more and more i understand that they they don't realize that Being able to give to the farmer a little bit more to make his change and this little bit more is not systematically changing the game for the consumer in terms of value of the product is an important one. So how to translate that into subsidy? I don't know, but I think that there is some studies and some money to be spent to make this transparency more clear. I was thinking about having some campaign like... I think it was already developed in some countries like one cent for the farmer or one, a few one euro more for the farmer in terms of communication on the final product would be some initiative that would definitely help the whole value chain to reward properly the farmer if there is a change for the change, not for nothing. Thank you. uh that would be good the second thing i would do is probably um to reward the farmer and and to give the farmer the subsidies based on outcomes more than just on practices or some recommendations or ask made by the EU. I would rather pay them based on what's really achieved and give the farmer the freedom to do whatever they want. So if you, for example, if you want to avoid floods or losing soil from your fields, this is something that we measure and this is something that we pay if it happened and you do whatever you want. because the farmer is the best one to judge what kind of cover crop, what kind of tillage, what kind of whatever direction of seeding he should do to avoid to lose soil in this example. So that would be another element of change. I'm not coming with a specific...
- Speaker #0
Yeah, that's something I hear a lot at the moment is this concept of outcome-based subsidy system. Where we start with the outcomes. What do we want from agriculture? Obviously, we want it to produce food, but we also want it to be healthy food. We want ecosystem to be healthy. We want more biodiversity. We want healthier soils. We want all of these beautiful things. We want sequestered carbon from the atmosphere into the soil. So let's kind of agree on what we want farmers to achieve and let them achieve.
- Speaker #1
those results whichever way they decide to do that and if they do achieve it then reward them for for the results that's the key idea right yeah yeah and then the the the last point is that the i would also look at um how to uh enable the smaller farm to survive or the smaller regenerative farms because uh i i believe that um in this small farm there is also a certain amount of discovery and research and development. So I think that the subsidies should look at that probably by adjusting the level of payments on the outcomes based on the size to be sure that the small, innovative regional farm could continue to operate.
- Speaker #0
What's one story, one moment that made you realize that's what you were doing? with Cultivare was really making a difference?
- Speaker #1
I think that I was referring to a good barbecue with different members of this value chain. I think that we had one or two very good moments where we had the farmers, the industries, The agronomists, the people from the cooperative all together in the barn, having beers, having good food, sharing experiences, sharing also data, prices, margins, sharing ideas about communication, sharing their challenges in the industry, sharing the challenges in the fields. This exchange and this moment were a moment where I really felt that we were participating at our scale, we're very small, to a change, rebuilding connections, rebuilding motivations, bringing impact with this small community of farmers and having those also multinational agro-industries in the room because we're working with big one. Portmald is one of the biggest. Malta in the world, having the CEO of this company discussing and joking with us, brainstorming with us was a moment where I realized that we were actually in the right direction. Yeah.
- Speaker #0
Nice. Fantastic. Thank you so much for your time. It's a great conversation. Take care.
- Speaker #1
Thank you. Bye.
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