Is your business truly regenerative?
It is time to start talking about agricultural business profitability.
Land managers have long measured their success based on production outcomes such as the top price at the cattle sale or the highest yielding, weed free crop rather than discussing openly whether they have made a profit. This production conversation keeps us stuck in a degenerative agricultural model. Many land manager’s fears around regenerative agricultural practices are linked to this mindset and to concerns that they may lose production and appear less successful, even though maximising production does not necessarily mean maximising profit.
The foundations of a truly profitable, regenerative agricultural business are based on a holistic view of profit rather than focusing solely on financial profit at the exclusion of the other forms of capital we rely on in our production system. You are not running a profitable or regenerative business if you are running down your financial, human and/or natural capital to survive.
If your business is making a financial profit but your soil health and ecosystem functions are declining you are extracting (mining). If you are making a financial profit at the expense of human wellbeing you are exploiting. If you are tolerating an agricultural business that is not making a financial profit because it is a “lifestyle” you are eroding the financial capital in your business assets to survive and this cannot be claimed to be regenerative.
Increasing land values have made it possible for land managers to increase farm debt and continue with degenerative farming systems where the financial profits are made by corporations before land managers. Ever increasing debt levels, declining soil carbon levels and rural communities with high rates of relationship breakdown, cancer, chronic illnesses, mental health issues and suicide are key indicators that our agricultural systems have been degenerating natural and human capital to produce financial capital which then leaves rural areas. Is it any wonder that this flows on to creating declining rural populations and declining human and ecosystem health across the planet?
A regenerative, profitable agricultural business generates financial, human and natural capital. A business that fails to address generating these three forms of capital does not have any resilience to cope with climatic extremes, natural disasters or market fluctuations. True profit means we are empowered to move from surviving to thriving.
As regenerative land managers let’s have holistic conversations about farm profit. Let’s aim to generate financial profits, whilst simultaneously generating profit in the form of increasing soil health including carbon sequestration, ecosystem services, healthy relationships, healthy food and healthy people.
Transitioning to a regenerative agriculture system requires us to have the courage to look at our whole farming system and honestly address all of the areas where we may be degrading a resource base. This must include the courage to have open conversations about financial profit and to address those human resource issues such as relationship issues, self care and stress management that we can be inclined to avoid. Prioritising soil and ecosystem health and the care of people in our business in ways that also contribute to creating financial profit are essential for us to create a truly regenerative business.
It is easy to become so passionate and focused on building natural capital in the transition to a regenerative agriculture system that the necessity of generating financial profits to keep the business alive can be overlooked. Your business succeeds with profit and survives with cash flow. At Integrity Soils we are passionate about supporting land managers through the process of successfully transitioning to a profitable regenerative farming system.
Written by Kim Deans.
Kim is available for coaching to empower you to create a thriving, profitable and regenerative farm business. firstname.lastname@example.org Ph +61 0455 596 464