As the human population expands, our ability to maintain sustainable agricultural growth is constantly challenged. On the other hand, as climate change takes on a noticeable effect on our lives, it’s never been more important to push for more sustainable agricultural practices in how we obtain our food.
The movement towards sustainable cropping – a series of practices farmers are employing across the globe to help secure future food supply – is a step in the right direction.
Reshaping agricultural practices to achieve sustainability goals calls for additional resources, research, and funding – which sets up those looking to invest in agriculture for success. So long as we take action – like establishing sustainable cropping practices – to ensure our farming industry thrives throughout climate change mitigation, we will continue to see agriculture as a prominent and stable part of the world economy. But, in order to adapt these systems and implement them, farmers need capital.
Overall, not only does sustainable farmland investing show superior risk-adjusted returns, but it also helps generate positive environmental impact. Thus, the farms and investors that are able to scale sustainable agriculture systems will see an opportunity for success.
If we don’t make changes to today’s current farming practices, unfortunately, some of the predictions around the future of sustainable agriculture do become alarming. From the rapid erosion of soils to the destruction of species and habitats – many signs point to wasteful farming practices as the primary cause for concern.
In fact, the United Nations reports that “food production around the world currently accounts for 40% of land use, 30% of greenhouse gas emissions and 70% of freshwater consumption.” This is a huge toll not only on the environment, but also on our ability to use land and water for other growing needs, such as housing and human water use.
Enter sustainable cropping: a specific practice that is part of a larger initiative to shift agricultural trends towards sustainability and secure food supply. Sustainable cropping falls under the umbrella of “sustainable agriculture.” Congress defines sustainable agriculture as a series of essential steps that form an integrated system that allows us to leverage plant and animal production. Together, these steps ensure that over the long-term, we are able to:
“(A) Satisfy human food and fiber needs;
(B) Enhance environmental quality and the natural resource base upon which the agriculture economy depends;
(C) Make the most efficient use of nonrenewable resources and on-farm resources and integrate, where appropriate, natural biological cycles and controls;
(D) Sustain the economic viability of farm operations; and
(E) Enhance the quality of life for farmers and society as a whole.”
In essence, the term encompasses agricultural practices that focus on three key aspects: the economy, the environment, and the social aspects of the industry.
These are practices that will ensure farmers continue to be profitable while also protecting the environment and conserving natural resources. When these systems are set up to run smoothly, they allow for greater efficiency.
By adopting greater crop variability in their fields, farmers increase the land’s biodiversity, and thus make it more sustainable and durable if unfavorable conditions arise. A variety of crops also allows farmers to be more flexible and resilient in the event of a failure of one type of crop, or a change in the crop’s supply and demand – ultimately posing a lesser economic risk.
Additionally, planting cover crops can help prevent soil erosion – improving both soil and water quality in the short and long term. Cover crops are particularly beneficial during off-seasons when the soil would otherwise be exposed.
A huge factor for ensuring sustainable cropping’s success is eliminating harmful pesticides and instead focusing on creating systems that bring in natural predators of pests, such as bats and ladybugs that eat harmful insects. And, of course, having a variety of crops will attract and allow more of these helpful species to thrive.
Farmers can release these species into their fields in lieu of chemical pesticides, or grow certain plants that will attract them to their fields. Mechanical pest control methods, such as putting up barriers, hand-picking crops to locate and disrupt pest activity, and setting up traps offer another alternative to chemical solutions.
At scale, sustainable cropping is a way to avoid commodification to produce cheaper, lower quality foods. Instead, farms are given the resources to focus on ensuring optimal nutrition and sustainability, which translates into higher, more stable prices, and, on the investors’ end, higher returns.
Today, many farmers employ a number of methods when growing their crops to reduce their resource intake and minimize negative impacts on the land. As with any kind of innovation, many of these systems require additional technological systems and resources – which is where contributions from investors have the potential to go a long way.
In an SLM Partners report, we see a collection of case studies that speak for themselves: farmers who successfully embraced sustainability saw more meaningful long-term success. Not only did they surpass local norms, but they also “achieved a much higher return on their land and their capital.”
The report also explains that for farms, it’s not necessarily about increasing efficiency of linear processes via sustainable farming, but rather to put in the work and research into redesigning entire systems: “The goal is to build a system that is more than the sum of its parts. The mental framework is ‘farm as [an] ecosystem’ not ‘farm as factory’.”
So, sustainable cropping is just one of these parts – but it sets the stage for synergy.
The agricultural industry has its fair share of looming challenges, but scalable solutions like sustainable cropping set the stage for a long-term play in farmland investing. Promising changes like increased efficiencies and avoiding commodification showcase the versatility and adaptability of the agricultural industry. Thus, the ability to scale these changes holds high potential returns.
By investing in farmland, not only are you investing in an industry that is resilient and adaptable, but you are also becoming part of a movement towards a more stable food supply for the future. With FarmTogether, you’re able to join a community of like-minded forward thinkers who will set the stage for sustainable agricultural best practices for years to come.
Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.