In January 2023, the Ivey Centre for Building Sustainable Value released a pivotal report entitled Advancing Regenerative Agriculture: Barriers, Enablers and Recommendations. The report, funded by the Institute for Sustainable Finance and the Canadian Sustainable Finance Network, covered a range of topics on the importance of agriculture in Canada, providing an overview of the current system, an introduction to regenerative agriculture, and highlighting the steps Canada must take in order to reach a more sustainable, desired future.
It's been one year since the release of the report, and the BSV wanted to check in with co-authors Jean-François Obregón and Michelina Aguanno to see where the research is now. This Q&A with the authors sheds a spotlight on the perception around regenerative agriculture, the burden of responsibility, and the role of land in the adoption of regenerative practices in farming.
Report Overview
First of all, congratulations to your team in such a successfully report! After it’s official launch at the livestream event Regenerative Agriculture: The Role of Finance & the Value Chain (part of our Future of Agri-food Event Series), the report received widespread readership and was one of the top performing publications on our site for 2024. It’s hard to believe it’s been one year since its release.
For our readers, can you provide a brief statement on what this report set out to accomplish? What was your original goal in writing the report, and did it change by the end?
Our initial goal was to write a report addressing the current state and future potential of financing regenerative agriculture in Canada. While the focus was finance, we quickly realized that we were dealing with a problem of systems change and chose to take a systems lens when writing the report. In doing so, we sought to shift the onus of advancing regenerative agriculture from solely a producer standpoint. While it was important to introduce the topic and the practices producers can implement, our main audiences were the enabling actors in the agri-food system that can support producers in financing the transition. We brought in multiple perspectives including finance, nature, urban planning, and social equality lenses, to frame the benefits and barriers to advancing regenerative agriculture, and crucial conditions for its success in Canada.
Our goal was to compile research and take a systems perspective to the issue of financing regenerative agriculture to talk about the key barriers and how different actors can leverage their role in the system to enable change.
Land Stewardship
In the report, you discuss how farmers are innately connected to their land, viewing it as an asset that is sentimental as much as it is economic. Many farmers identify as stewards of their land over which they exercise autonomy and agency, which was seen both as a motivating factor as well as a detractor to changing their practices. For example, some farmers wish to adopt regenerative practices to improve the health of their soil for future generations, whereas others were dissuaded from altering their operations from external pressures and for fear of alienation.
Based on your research, have the views of critical players (i.e., producers, financiers, government, etc.) on adopting regenerative practices in Canada changed in the last year, and if so, how? In other words, are we further ahead than we were a year ago?
There have been mixed signals since the release of our report. There continues to be interest from farmers, particularly the next generation of farmers, to apply regenerative practices. However, there is still a lack of bridge financing from banks available to enable farmers to move towards adopting regenerative practices without it facing excessive costs. The Experimental Acres Pilot was wound down in 2023. This initiative saw municipal governments in the counties of Grey, Dufferin and Wellington pay small grants to farmers to test regenerative practices like cover cropping on their land. For regenerative agriculture to take root firmly, these types of initiatives require evergreen funding and must be replicated in municipalities, particularly those facing urban encroachment. Overall, large players in agri-food, food retail, and finance in Canada continue to have a major role to play in supporting the implementation of regenerative practices like cover cropping, reduced tillage, and rotational grazing.
Share of Responsibility
You wrote that, by and large, the perception of who bears responsibility for regenerating the agricultural sector is complicated, with various parties viewing the burden of responsibility differently based on who benefits. Among producers, the feeling is that since the positives of regenerative agriculture aggregate to society, it is not their responsibility to take on the upfront costs and risks.
Does this hold true today, or have we seen a shift in that perception?
There continues to be an interest in the potential for carbon offsets and carbon credits in the media, as well as in grey and academic literature. These financial instruments can help to incentivize producers to transition to more regenerative forms of agriculture. However, initiatives that finance producers' adoption of regenerative practices to improve soil health or water filtration present an issue; while laudable, questions remain, like where does this leave producers who have been applying regenerative practices all along? What form of compensation can be provided to reward them for pioneering the implementation and adoption of regenerative agriculture at their own risk? Adequate efforts should be made to compensate producers who are already leading the charge.
Does government have a larger role to play in shouldering the financial responsibility of transitioning to regenerative agriculture, and have they stepped up in the last year?
Governments at all levels have a role to play in enabling greater adoption of regenerative agriculture practices. The federal government has funded cover cropping and rotational grazing trials across Canada with the Agricultural Climate Solutions – On-Farm Climate Action Fund. The program first ran between 2022-2024 with 12 projects in total. The program is distributing $300 million between 2025-2028 to continue to fund these trials. Provincial governments can exert influence through their agricultural and land use policies. The Ontario government can do more to fund the adoption of practices like no/low till, no/low external inputs, and rotational grazing. At the municipal level, initiatives like the Experimental Acres Pilot should be replicated across the country since they signal local support for agriculture and are low-cost.
Regenerative agriculture results in positive externalities that extend beyond the farm and benefit society. These leave many to think government is the solution to advancing regenerative agriculture; however, government involvement is just one part of the solution. There is also a role for market actors to fund nature-based solutions. In fact, the Kunming-Montreal Global Biodiversity Framework makes explicit mention of leveraging non-public sources of funding. Governments can play a concessionary finance role, where they fund regenerative agriculture programs to attract private sector finance. By government funding a novel practice, it can make it less costly for the private sector to get involved. Blended finance approaches, which include a combination of public and private funding, plays a strategic role in this transition. For instance, the Experimental Acres Pilot received funding from the federal government, Scotiabank and Maple Leaf Foods, among other organizations.
Housing and Agriculture
A lot has happened in the past year in terms of housing development news, with the demand for affordable housing shining a spotlight on land availability. In many Canadian provinces, agricultural land is a finite, precious resource under threat by rapid urbanization and the need for housing. This was most notoriously illustrated by the Ontario Greenbelt housing announcement, put forward by the Ford Government in November of 2022. Premier Ford’s proposal to surrender significant swaths of the Greenbelt to housing developers drew harsh criticism and spurred investigations from the province's auditor general and integrity commissioner. Had the plan, which was ultimately revoked, been successful, the amount of agricultural land needed to supply the province with safe, healthy food would have been dramatically scaled back.
What is the significance of the reversal of the development proposition by the Ford government, and what do you think it says about the power of collective voices in their ability to advocate for change?
The Ford government’s reversal on the amendments to the Greenbelt was encouraging and was the result of public pressure. However, root and branch changes have been made to planning legislation and regulations in Ontario that have heightened the risks to agriculture. The Provincial Planning Statement (PPS) is the document that signals the province’s priorities to municipalities. The PPS leads the latter to integrate these priorities into their own policies. The PPS was updated in 2024 and rightly prioritizes housing but dilutes protections for agricultural land. For instance, density targets are no longer mandatory, which weakens the case for high-density development that would leave agricultural land protected for a longer period of time. The More Homes Built Faster Act, passed in 2022, requires municipalities to spend Development Charge Reserve Funds on hard infrastructure like wastewater and roads. This will increase pressure to build housing in agricultural areas. Some Ivey professors published an op-ed in the Toronto Star criticizing this bill in November 2022 calling for increased urban intensification. In this regard, it's important for more members of the public to let their elected officials know about the importance of keeping farmland intact in the face of these pressures.
What do you think governments need to be mindful of when balancing the need for more affordable housing with the protection of agricultural land?
As governments navigate the tensions between affordable housing and agricultural land, they must consider that the way in which we currently value farmland does not reflect its social and environmental values. For instance, farmland's water filtration capabilities and enabling of local food security. Nevertheless, farmland valuations have increased, particularly in southern Ontario in recent years partly due to investors looking for land close to urban areas. Urban expansion into agricultural areas in Ontario have been facilitated by the updated PPS.
However, actors like government and the private sector can encourage higher-density housing in existing urban areas. This type of housing can be faster because the infrastructure (e.g. wastewater, electricity) is less costly to build compared with building in an agricultural area. Building housing in existing urban areas also reduces pressures to build on agricultural land.
What's Next for the Research?
Is there anything more you’d like readers to know? What are you working on next in this space?
This report marked a key turning point at Ivey Business School to focus on advancing sustainability in Agri-Food systems. By providing a systems perspective, this report highlighted the potential for business schools to get involved in enabling the transition. By framing the transformation of industrial farming practices to regenerative as a systems problem, we positioned the problem not only as one that should be tackled in natural science departments as an issue of soil health. We point to other levels of analysis and actors that play a role in this change. This has led to other emergent projects that collectively are seeking to address this issue.
Key recommendations in our report included: clarifying the meaning of “regenerative agriculture” as a term, developing financial instruments that value biodiversity, building an inclusive financial infrastructure that overcome challenges that are associated with regenerative agriculture like risk distribution and time horizons, seeking perspectives from Indigenous and racialized communities as well as migrant workers, and engaging actors from across the system like farmers, investors, planners, and policymakers to make transformative change.
At Ivey, we are continuing work on projects to leverage a systems transition in the Agri-food sector. The Towards a Climate-Smart Food System project, convened representatives from farming, municipal government, food processing, finance and civil society to contribute to a Theory of Change (ToC). Our ToC has a number of potential initiatives that can catalyze the development of more sustainable food systems in southern Ontario. Another project, the Nature-Based Finance Initiative, partnered with financial actors to explore the development of innovative financing solutions for regenerative agriculture. A follow-up report detailing innovative financial instruments for nature and the financing of regenerative agriculture will be released later this year.
For ongoing readers of our report, we hope they take away the systems perspective to transforming regenerative agriculture. As institutions, and as individuals, to think about their role in the system, how they benefit from regeneration and their agency to leverage change. There is not a single, silver-bullet solution to transform the regenerative agriculture system in Canada, but rather an ecology of actions. We hope this report helps advance a future agenda of work to address regeneration in Agri-food systems.