🇬🇧 Does regenerative farming generate a profit?

What is regenerative farming?

There is no set definition of regenerative farming. However, it is often likened to a more environmentally friendly way to generate our food. Farming practices that preserve our soils, reduce their carbon footprint, and enhance local biodiversity are considered regenerative by many. The importance of soil health is often at the centre of regenerative farming. Reverting to the more traditional farming techniques and away from intensive agriculture is likely to achieve this.

However, many farmers are trying to turn a profit. Can regenerative farming and business really go hand in hand? The short answer is, ‘yes’, but it may take time.

What does a regenerative livestock farm look like?

With a real emphasis on improving soils, often arable farms are the focus of regenerative farming. But what about those who are livestock farmers? Regenerative farming stresses the importance of integrating both crops and livestock. The plants feed the animals and in turn the animals, or at least their dung, feed the plants. It’s a natural cycle that benefits the soil, crops, and livestock.

A buzz-phrase when it comes to sustainable livestock production is ‘regenerative grazing’. This is a method whereby livestock graze pasture in a more natural way. It involves rotational grazing which moves livestock to different pasture every 2 or 3 days. This mimics the natural migratory grazing behaviour of the herds or flocks. Conventional grazing rapidly reduces the species within the grassland. It diminishes nutrients in the soil, and depletes the nutritional quality of the grass. Regenerative grazing, on the other hand, does the opposite.

How do a regenerative-led farm and a non-regen farm compare?

Regenerative – led farms can increase in profitability due to improved soil, grass, and crops. Over time, as the soil regenerates, pasture and crop quality improve. This can reduce costs in terms of fertiliser usage and making or buying in conserved forage. If done correctly, outwintering cattle can also improve the land. It can reduce costs in terms of electricity, labour, and machinery use.

What are some of the investments that need to be made? How long might it be before breaking-even or getting into profit?

Crop rotations introduced to arable farms can improve the soil especially if legumes are intercropped. These enhance soil nitrogen content and structure. Growing cover crops to reduce the exposure of bare soils can also reduce run off and prevent degradation of soils. Deep rooted crops bring nutrients from deep underground, improving soil quality and helping to improve soil structure. These practices make the land more resilient to drought and flood.

Introducing livestock onto an arable farm has the added benefit of natural manure as well as reducing weed prevalence and acting as disease management when grazing stubble crops. However, arable farms that introduce livestock as well as livestock farms that turn to rotational grazing will have upfront costs to bare. These include water troughs, pipes, and fencing. But this infrastructure lasts decades whilst the cost of conserved forage for indoor-housed livestock lasts just days.

Comparing farms

The property company Savills conducted an experiment on their virtual farm. They compared the profitability of a conventional farm and a regenerative farm. Although the net margin was down on the regenerative farm by 41% during the first year, by year 6 profitability had increased by 18%. The calculations performed on the virtual farm took into account cover and catch crops to improve nutrient cycling, reductions in artificial fertiliser, reductions in pest burdens, income from the grazier’s payments, carbon certificates and payments from the Sustainable Farming Incentive. 

Real farmers echo an increase in profitability. In the Lammermuir Hills of southern Scotland, Charley and Andrea Walker have introduced regenerative farming onto their 625-acre cattle and sheep farm. In just 5 years, they have increased their stocking rates by 35% and increased their production in terms of kilograms of liveweight per hectare by 50%. Through adopting a regenerative farming approach, the Walkers have seen an increase in species diversity (animal and plant), soil structure, organic matter content, water retention and carbon capture across their land.

The Rodale Institute in Pennsylvania has been running organic, regenerative fields alongside conventional fields for more than 30 years. After the initial 1–2-year transition period, whereby regenerative farming suffers a reduction in production, both types of farming have produced the same yields. On top of this, regenerative farming has required less input and therefore generated greater profits. When there have been adverse weather conditions, the regenerative farming fields have faired much better due to their resilience.

What does it mean in terms of subsidies and grants?

Whilst there are environmental incentives to transform farms to becoming more nature friendly it needs to make business sense to the farmer. The Sustainable Farming Incentive (SFI) in England focuses on soil health and rewards both arable and livestock farmers for prioritising this. They offer between £45/ha and £55/ha for not using insecticides and adopting companion cropping. The Sustainable Farming Scheme in Wales also aims to reward farmers for producing their goods in a more environmentally friendly manner.

Farming in a more environmentally friendly or regnerative way allows farmers to tap into some of the government schemes. Some companies such as Wildfarmed that sell their products to Marks and Spencer, reward their farmers for producing crops  with greater plant diversity and reduced inputs.

Farmers can also be paid carbon credits by some private companies, where they lock carbon away in the soil using regenerative farming practices or reduce the amount of carbon they produce on their farm. See our blog on An Introduction to Carbon Calculators.

To find out more about how AgriWebb works within the sustainable farming space, click here.