Climate-resilient agriculture gains momentum as Europe bakes

Sam Squier’s 200-acre farm in South?east England, amidst scorched brown fields, stands out as an oasis of lush greenery.

Squier’s Aberdeen Angus herd feeds on dense 'pasture' maintained by plantings that have retained water and improved the soil quality.

Squier said, "This year's a great example of what you can achieve in a year without rain."

He said, "Our vision was improving the soil structure and building resilience within our business to mitigate against both prolonged hot and dry weather periods and prolonged wet weather periods."

His cattle, which are genetically modified to produce tender Japanese Wagyu beef, graze a mixture of grasses and deep-rooted herbs, also known as herb leys.

The method was inspired by ancient farming practices. It reflects the decades-long effort to introduce climate resilient farming, as governments and regulators around the world sought to reduce supply chain vulnerability.

The extreme weather this year has heightened the urgency of the debate about whether climate change is changing the economics.

According to interviews conducted for this article with over 25 people involved in the issue, banks and insurance companies, water companies, governments, and major food groups like McDonald's, are all funding a change in farming practices.

Financial Losses from Extreme Weather

Meteorologists expect to declare Britain’s summer officially ending on August 31 as the hottest ever. Europe has experienced extreme heating this year with five heatwaves, and rainfall far below average.

Nearly three quarters of England are officially in drought after its hottest June on record and the driest month of July.

Farmers in the UK have warned that the UK's crop of cereals will be the worst ever since records began. Fruit and vegetable producers have also said they expect a reduction in production. This is echoed by warnings across Europe.

According to the Energy and Climate Intelligence Unit, the losses to farmers in Europe and Britain due to failed crops during the heatwave in June could be up to EUR2.3bn ($2.7bn). The increased costs of energy and fertilizer due to the Middle East war have already had a knock-on effect on inflation.

NUTRIENT-ENHANCING & ENERGY RICH

The herbal leys on some Squier's farms, near Chelmsford are still standing over knee-high even after two months of no rain and without irrigation.

The herbs and grasses are rich in energy, they help control parasites, reduce medication requirements, and the legumes fix nitrogen into the soil to eliminate the need for artificial fertilizers.

They are concentrated on a small area, where they graze the vegetation. The cows move twice daily. The cows create a layer of protection over the soil and their manure helps to return seed back into the ground. This improves the soil's health and increases water retention. Squier hasn't had to purchase winter feed in eight years.

He believes that the soil now holds 400,000 litres more water per acre compared to before he started regenerative agriculture. Earthworm numbers increased from 80 million in the first six months to 680 millions after the switch.

Big Companies Help Farms Switch Techniques

Squier was able to make the switch thanks to grants from the government. He said that without the support, his farm would be unable to survive.

Other people also have problems with ownership and rental arrangements, financial restrictions and resistance to changes.

As evidence grows that investing in new farming methods is worthwhile, it's becoming more popular to work with companies across different sectors, including banks and insurers, who have an interest in protecting their own interests from extreme weather.

Andrew Voysey of the agriculture consultancy Soil Capital said that farms adopting... regenerative techniques consistently outperform more conventional holdings in terms both of yield and profitability during drought stress.

He cited an organisational study that showed farms adopting regenerative practices were able to reduce drought-related losses in yield by at least 10% around 85%.

In Britain, Lloyds Bank, Affinity water, Severn Trent, and AXA XL have joined forces to create the Food & Nature Fund. Funds are pooled and distributed to farmers for soil health improvement.

Ben Makowiecki is the Agriculture Sustainability Director at Lloyds. He said that water companies could reduce their costs by removing farm chemicals in river systems. They would save PS4 ($5) or PS6 for each pound invested in farms. Insurers can also access data on how regenerative farming can help mitigate flood risks.

He said that "systemic changes" in the industry cannot be achieved by working individually.

Routes to Regen is another scheme, which involves companies such as McCain, McDonald's and UK supermarket Waitrose. It also includes banks like Lloyds, Barclays, and NatWest, and insurers such as Aon and Tokio.

Instead of creating a pooled funds, the aim is to offer farmers a variety of options for support. Options include preferential loan terms, technical assistance, incentives from food companies, peer-to-peer learning, and insurance products.

A spokesperson stated that after launching the initiative last year with only 100 farmers, the goal is to expand to at least 200 this year and to include six additional counties in addition to the original six.

Major Food Groups are Increasingly Involved

Jon Banner, global chief-impact officer at McDonald's said that building a resilient food system was bigger than any single company. The company aims to invest at least $1 billion in supply-chain reliability over the next decade.

McCain Foods is a Canadian frozen potato company that offers a variety of support programmes to its farmers, including financial assistance, guarantees, incentives, and long-term contracts.

Charlie Angelakos, Vice President of Global External Affairs and Sustainability at the company, said that supply concerns were behind its decision to focus on regenerative agriculture. He added: "This is not just a climate-change play for us." We see this as an 'assured supply initiative.'

Some have been able to change their lives because of the support they received from the insurance industry.

Nestle is the largest food and beverage company in the world by market capitalisation. Insurers have offered lower insurance fees against natural disasters or yield declines for regenerative farming practices.

Nestle's Chief Sustainability Officer, Antonia Wanner said: "That's a new tool.

This year, Generali Italia launched a pilot project involving 500 farms. The program links sustainable farming practices with 'higher indemnity limitations for climate-related incidents. Future phases could include lower premiums.

The British farming officials could not say how many farms use regenerative technologies because it means different things to different people.

Andy Gray is also an English farmer who has switched.

He pointed a thermometer at two areas of his farm on one of the hottest days of the summer.

Under a clover cover crop, the soil temperature registered at 32 degrees Celsius. He said that on a nearby bare spot, the temperature reached 51 C (123.8 F), which is a temperature high enough to kill most of the soil biology plants need.

Gray, a farmer in Devon, a county located in the southwest, said, "If I maintain soil moisture for two weeks before the drought begins, that will give me an additional fortnight of growing."

If it stays green, it will continue to produce.

(source: Reuters)