As the global population increases and climate change continues to progress, agricultural scientists are faced with the challenge of how to feed the future world. This is where sustainable agriculture comes into play. The greater purpose of sustainable agriculture is to:
“Meet society’s food and textile needs in the present without compromising the ability of future generations to meet their own needs.”
Many farmers, politicians, and scientists alike are pushing for a global shift towards sustainable farming, and striving to develop farming practices that will produce enough food to accommodate today’s growing population, while simultaneously ensuring the availability of resources for the future.
When it comes to investing in farmland, sustainability is key; consistent returns from crop production and a high valuation at the eventual sale of the land both depend on the continued viability of farmland.
Shifting Away From Industrialization
There is growing criticism around industrial farming among many industry professionals and consumers. Industrial farms consist of large-scale operations that generally use artificial fertilizers and pesticides to yield large harvests of monocultures. The singular focus is maintaining annual, or even monthly, quotas, and demand.
In fact, industrial farming practices as we know them largely have roots in efforts to feed the boom in the U.S. population after World War II. However, these methods are often toxic for the environment, and harmful to the land, as adding chemicals to the same plots year after year degrades the natural benefits of the soil and emits pollutants into local atmospheres and water supplies.
For these reasons, large-scale factory farming practices have taken hits in the media – and, coupled with new developments in ag-tech – alternatives are becoming more and more available and appealing. Sustainable agriculture uses a closed-loop process in farming, meaning it,
“Produces its own inputs (fertilizer from animals, feed grown on the land) and manages its outputs (crop waste, manure).”
Instead of depleting natural resources, sustainable farms contribute to natural biodiversity and ecosystems while producing crops. On the flip side, the biggest stressor for land today is man-made – with “agriculture being a dominant sector driving degradation”. When farmland is treated and maintained in a way that preserves its natural qualities, this results in longer-term, ongoing land usability.
Focusing on consistent production into the future also benefits investors – as returns on crops are your returns as the investor. Thus, sustainability is a key consideration when we present farmland options to all of our clients.
The Economic Viability of Sustainable Farming
The profitability and economic viability of sustainable farming is as much a focus as it is an environmental necessity. In fact, under the U.S. Code of Agriculture, maximizing economic benefit is a core part of the definition of “sustainable agriculture.” The policy requires increasing employment opportunities in the farming sector, assuring continuous economic viability of farmland, and enhancing the global competitiveness of U.S. farmland. The U.S.D.A. recommends a shift towards sustainable farming for the express purpose of its potential to increase the profitability of farmland.
One analysis of 20 corn farms found that despite decreases in yield after deindustrialization of the farms, farmers who transitioned to regenerative methods increased profitability by almost 80%. Simultaneously, by caring for and uplifting the natural ecosystems, these farms are well equipped to survive season after season.
Regenerative farming prioritizes restoration and long term usability of farmland, often land that previously has been overworked. The focus is ensuring the health of the farmland’s ecology while actively growing crops, which often means tilling the soil less, alternating the crops that grow, and following the natural weather patterns in the area.
Farms that focus on sustainability today may well be the backbone of the country’s food economy in the future.
Sustainable Farms vs Traditional Farms
Though sustainable farms and traditional farms produce comparable yields in side-by-side comparisons, sustainable farms are equipped to continue to feed the growing world population for years to come. And, the move towards sustainable agriculture is beneficial for all involved. By focusing on renewable practices and making sure to replenish resources, annual production costs of farming will decrease, meaning higher returns for financial backers. Investing in upgrades to a traditional farm will provide the capital for it to succeed in a changing world while diversifying and strengthening your portfolio.
Invest with FarmTogether
At FarmTogether, we consider it our mission to channel funding for the upgrades and transitions that will enable farmers to meet new market trends and sustainability requirements. Our investors in turn share in the rewards with cash income, capital appreciation, a balanced portfolio, and the satisfaction of helping to preserve the best of our rural land and communities.
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.