Counting what counts: regen ag requires new economic measures

by | Nov 19, 2021 | News

The usual ways to measure the economics of farming need to be expanded to fully understand the costs and benefits of regenerative agriculture practices in New Zealand, says a new report out today.

The report, Determining the economic and market potential of regenerative agriculture, highlights the need to improve the way we value environmental stewardship, which would provide more balanced economic understanding of all farms in New Zealand.

“We need to broaden the way we value our food production systems,” says one of the report authors, Distinguished Professor Caroline Saunders, director of Lincoln University’s Agricultural Economics Research Unit (AERU). “Economics can help us assess a wider range of value from agriculture, to include its effect on society, culture and the environment.”

Regenerative farm management systems may have environmental benefits for biodiversity, water quality, and the reduction of greenhouse gas emissions, says the report. Accounting for environmental impacts, both negative and positive, could provide a useful approach for fully measuring the impact of the adoption of regenerative agriculture for New Zealand.

Agricultural businesses in New Zealand have often been criticized for not accounting for the full environmental costs of their products. A report from the Environmental Protection Authority released last week highlights agricultural companies carry the country’s biggest burden of greenhouse gases. In 2014, the costs of the negative environmental impact of the NZ dairy industry were estimated to exceed the 2012 dairy export revenue of NZ$11.6 billion.

The report also highlights the potential for regenerative farmers to access new and emerging financial benefits. These include carbon and biodiversity credits, ‘green finance’ from financial institutions (in which terms are tied to environmental or social goals), and transition finance (through private investment such as Calm the Farm, for example).

“There could be potential to generate a premium, protect market share, or further strengthen New Zealand’s food reputation”

— Distinguished Professor Caroline Saunders, AERU director, Lincoln University

‘Regen ag’ is a sustainability trend that is likely to move at different paces internationally, says the report, which suggests methods to assess the possible value of regenerative agriculture in different markets. Recent market studies found that about 40% of New Zealand’s potential food customers in California and the UK are aware of regenerative agriculture, and associate ‘regen’-farmed food with reduced environmental impacts and improved animal welfare.

“These qualities have potential to help New Zealand agribusinesses generate more value for our food exports. There could be potential to generate a premium, protect market share, or further strengthen New Zealand’s food reputation,” says Professor Saunders. “The commercial success of regenerative agriculture will depend on the prices that farmers can get for their products, especially overseas.”

The report is one of three new reports out today that provide an overview of how to assess the impact of regenerative agriculture on farm businesses. The reports look at how New Zealand agribusinesses could determine whether the adoption of regenerative agriculture practices might increase the quality or quantity of their produce, or the profitability of their business.

The reports are:

The three reports were produced by a research project funded by the Our Land and Water National Science Challenge, the NEXT Foundation and Manaaki Whenua – Landcare Research. The project has so far produced 15 reports providing recommendations for how claims regarding specific possible benefits of regenerative agriculture could be tested in Aotearoa New Zealand.

About the Author

Vincent Heeringa

Hi, I'm Vincent! I'm a co-founder of The Feed, a writer, marketer and PR expert specialising in food, tech and sustainability. In a previous life I was publisher of Idealog, Stoppress, NZ Marketing and Good magazines and helped establish the Science Media Centre. I'm also the host of a podcast ‘This Climate Business’. When I'm not burning the midnight oil, I'm hitting the town or planting trees with my wife Sarah. Ping me to talk about all things food. @vheeringa

Related Posts

AUT Winter Series is back: get in quick

AUT Winter Series is back: get in quick

Unwrap the chocolate and break out the mead, AUT’s Culinary Arts and Gastronomy Winter Series is back to warm you up with all things food in 2024. From a MasterChef-like pastry competition to a slow food marketplace and exploring the intersection of food and pleasure,...

From seed to table, fresh food for all

From seed to table, fresh food for all

Food resilience is the goal of Grow On Katikati, a community initiative aiming to ensure that by supporting people to grow their own food, no one need go hungry.  An hour in the company of the organisers, volunteers, and participants of Grow On Katikati (GOK) at the...