Finalist -Financing Sustainability -Daniel de Kock

Hollard Insure and and Agri News Net - Young Agri Writers competition- Rest of the winners ( In no specific order)

“Discontent with the status quo is a great catalyst for vision. If you can’t change the status quo, make the status quo, change…” Katsuaki Watanabe.

Currently there are a few major agricultural financiers in South Africa that are completely integrated into the input supply chain for cash crop farmers. This hinders their willingness to finance a production model that decreases the quantity of inputs used per hectare.

The regenerative agriculture model is focused on minimizing input cost per hectare and not maximizing output per hectare. Through this system, soils can be rebuilt that have been degraded by the conventional commercial system.

What is regenerative agriculture and why it is important?

Regenerative agriculture is focused on improving soil health through minimal soil disturbance, reduced chemical application, increased biological diversity, and soil cover. It transfers carbon from the air into the soil through photosynthesis, thereby increasing the amount of organic carbon in the soil, which improves soil water infiltration resulting in decreased runoff and reduced soil erosion. As organic carbon levels rise in the soil and soil aggregates are formed the water holding capacity of the soil is improved and this increases the soil’s resilience to droughts and floods, improving yield consistency across periods of varying climatic conditions.

How is it currently working

The conventional farm financing system in South Africa is dominated by a few large firms who are integrated throughout the input supply chain for the farmers. Farmers are granted production loans and make use of these acquired finances to purchase inputs such as seed, fertilizer, herbicides, pesticides, diesel, mechanization and advising services from the same companies that act as their financiers, who are charging the farmers interest on their loans throughout this entire process. These conventional production practices are degrading the soil on farms, decreasing the biological diversity and subsequently increasing weed and pest pressure. Farmers are required to increase the inputs per hectare to achieve the same year-on-year yields in increasingly deteriorated soils. Increased inputs per hectare increase the loan amounts and sales for the financiers thereby hindering their motivation to invest in and finance regenerative agricultural practices.

Is this in the interest of the farmer? Why are farmers listening to advisers that have their own interest at heart and not the interest of your farm, or even the food security of an entire nation?

How it ought to be

The successful implementation of regenerative agricultural practices depends largely on cover crop investment. We need an independent financier that is not only knowledgeable and experienced in the cultivation and utilization of cover crops, but also in the cash-crop production with minimal soil disturbance and fertilizer focusing on maximizing profit rather than yield. This is a long-term undertaking as the aim is not to be merely sustainable but to become regenerative. Food security can only be achieved if production practices are not only sustainable at current standards but will remain sustainable fifty years from now. The value of soil health and organic elements available in the soil needs to be realized by the financial sector so it can move towards increasing the value of the land rather than solely focusing on volumes and yield.

“Discontent with the status quo is a great catalyst for vision. If you can’t change the status quo, make the status quo, change. Being satisfied with the status quo means you are not making progress. If you're changing the status quo, whatever move you make is disrupting something else.”

It is time to disrupt the status quo of agricultural financing in South Africa. The social responsibility that rests on the shoulders of financiers can only be met once there is an acknowledgement that their actions influence the future of earth and not merely their profit projections. Regenerative agriculture is the only method we have available to offset, and even potentially reverse the effects of climate change. We can no longer be satisfied with self-interested financing structures at the expense of sustainability and food security which are vital elements in the survival of the agricultural industry and humankind itself.

Daniel de Kock