Market systems have driven the development of an industrial agricultural system that has excessively low unit costs, at the expense of environment and people. For transformation to happen, we need market systems to drive agriculture that is regenerative.
How does regenerative agriculture differ to ‘conventional’ agriculture’?
Regenerative agriculture aims to optimise production whilst looking after soil quality, biodiversity, water and the wider ecosystem within which farming takes place. It uses the cycling of nutrients and resources to improve efficiency and sustainability. In contrast, conventional, or industrial agriculture, aims to maximise profit from individual commodities, using linear production systems that rely on external inputs to achieve high yields.
A shift to more regenerative agriculture has implications for market systems (see Fig 1).
This shift will also have significant implications for gender with women tending to be under-represented in intensive agriculture market systems.
Market systems entry points for supporting regenerative agriculture
Practical Action has five strategies that use market systems to support regenerative agriculture.
Facilitating shorter value chains in domestic markets
Consumer demand for low impact agriculture is rising as a result of concerns over the environment, climate change and food safety. One strategy to take advantage of this demand is to support markets that reduce the distance between producers and consumers, give consumers greater confidence, make traceability easier and enable circular economies. Support to ‘farmers markets’ and direct producer links to consumers are examples of this. From our own work, programmes in Kenya and Nepal, have developed competitive local market systems, that respond to urban demand, whilst promoting regenerative agriculture and inclusivity.
Influencing corporate business models
A total focus on shorter value chains would limit the role of larger companies who can directly support the transition to more regenerative practises, as seen in recent commitments from Nestle and Unilever. They can also shift market incentives for diversification – e.g. Practical Action is working with Yogi Tea to diversify the practices and outputs of tea farmers in Rwanda. But perhaps the most influential impact of larger companies could be through accelerating learning on what a transition to regenerative agriculture looks like and through influencing other actors including Governments.
Developing new Input and Service markets
Regenerative agriculture needs tailored input and service markets rather than those that support intensive agriculture. For this to happen at scale, viable business models are needed and market system incentives need to be aligned.
As an example of the former, Practical Action, in Kenya is supporting the development of businesses that produce poultry feed and organic fertiliser from local agricultural resources, testing the viability of circular alternatives to intensively produced inputs. As an example of the latter, in Nepal, we have worked with government on the incentives and regulations needed to enable organic fertiliser to be produced and used at scale.
Regenerative agriculture also needs information systems that make more use of local knowledge, and farmer to farmer dissemination. In Kenya, Practical Action are testing different models that include a mix of private sector and public sector incentives that can sustain community extension.
Building the voice and role of small-scale farmers
Farmers hold the regenerative agricultural knowledge and skills the private sector needs to meet their ambitious regenerative agriculture targets. Ensuring that they play an influential role in market development and that their voices are heard is therefore critical.
The Practical Action Participatory Market Systems Development (PMSD) approach is one way to facilitate the engagement of farmers, women and other marginalised groups in market development. It does this: firstly, by strengthening market literacy and capacity to engage with market actors; and secondly by running participatory market forums giving farmers fair opportunity to engage with and influence others.
Creating a level playing field through policy change
All of the strategies described above have to contend with a system that is biased, through subsidies, tax breaks and other preferential policy which distorts the market in favour of industrial agriculture.
The creation of a ‘level playing field’, that does not distort the market is needed.
In practise this means less incentives for ‘damaging practises’ and more incentives for regenerative practises. This could be enabled by the adoption of ‘True Cost Accounting’ the integration of the ‘true costs’ of agricultural production into markets. The interests of Governments to take action on climate change also provides an opportunity – in Nepal, Practical Action used climate change policy development as a means to persuade government to start recognising the importance of regenerative agriculture.
There is no silver bullet that will enable the development of markets that support regenerative agriculture but perhaps the most important thing is to avoid being neutral. There is a direct link between the type of market systems development and the type of agriculture that is then normalised. Good market systems analysis can be used to understand these links and then ensure that market systems that promote agriculture that is good for people and the planet are the outcome.
For more information on Practical Action’s work on regenerative agriculture and markets please contact Chris Henderson, ch*************@pr*************.uk