The Economics of Regenerative Agriculture

Reaping the Rewards of Healthy Soil

Michel Cavigelli is a soil scientist at the Sustainable Agricultural Systems Laboratory in Beltsville, MD. His research focuses on nutrient cycling and agronomic, economic, and environmental performance of diverse cropping systems.

Welcome Dr. Cavigelli to Under the Microscope.

UM: What is regenerative agriculture? How is it different from other approaches, like conventional, organic, sustainable, permaculture, etc.?

MC: It seems to be defined differently by different people. It is based on the goal of regenerating soil which, to me, implies minimizing tillage, maximizing the amount of time there are growing roots in the soil, and adding organic amendments to the soil (manures, crop and cover crop residues). Specific practices that would be considered regenerative include: no-tillage or conservation tillage, cover crops, perennial crops, and increased cropping systems diversity. These practices are in line with the USDA Natural Resource Conservation Service (NRCS)’s soil health principles. A large part of my work is research on a long-term field experiment, the Farming Systems Project (FSP), which is part of the USDA-ARS LTAR Network. There, we have five cropping systems that allow us to test and compare various aspects of regenerative agriculture.

Regenerative is different from organic, because organic is explicitly defined by the National Organic Program of USDA, and prohibits many specific products. However, the philosophical basis of organic agriculture is to optimize soil health, so in that sense, regenerative agriculture shares a common goal with it.

UM: Why are we researching regenerative agriculture? What does it offer that isn’t available in other approaches?

MC: Regenerative agriculture considers the ecosystem services that agricultural systems could provide, in addition to providing food (and fiber). Historically, we focused almost exclusively on food (and fiber) production in agricultural research. Now that there is a broad recognition of the potential of agriculture to also support ecosystem health, I think conventional agriculture is also paying attention to the issue, so I’m not sure the distinction between conventional and regenerative agriculture is that clear. I think regenerative agriculture is defining the direction in which agriculture as a whole has to move. Agriculture needs to find a way to maintain production of food, while reducing its environmental impacts in a changing climate. Regenerative agriculture provides a roadmap for how to do that.

UM: Why would farmers want to practice regenerative agriculture, as opposed to another approach?

MC: I imagine there are many farmers who practice some aspects of regenerative agriculture, but they might not label themselves regenerative farmers. Instead, they think about how to adopt individual practices that fall into the “regenerative” basket. All farmers are probably interested in the long-term health of their soil, since their production depends on it. But they also have short-term interests to attend to in order to make sure that they are around in the longer term. Sometimes those interests compete, and farmers have to find the sweet spot. I think what is appealing is that increasing soil health increases resilience to climate extremes and can help reduce input costs. However, some soil health practices cost more than they pay off in the short term, so they are often a long-term investment.

A research field demonstrates how corn fares under drought conditions when it is grown using conventional tilling. (Photo courtesy of Michel Cavigelli, D5146-1).

UM: Are regenerative practices new, a return to past practices, or some combination of the two?

MC: Many regenerative practices have been around for a long time (millennia, in the case of cover crops, crop diversity, and animal manures; or decades, in the case of no-till). What is new is that we have improved tools and knowledge to better manage these practices. Tractor technology, for example, keeps improving, as does the yield potential of crops. New research on cover crops is helping farmers manage them more efficiently and effectively.

UM: What do we know about the economics of regenerative practices for farmers?

MC: The answer varies for each regenerative practice. No-till, for instance, usually involves investment in new equipment, so it can have steep upfront costs, but production costs decrease almost immediately (if depreciation on equipment isn’t counted). Crop yields may decrease initially, but, in a relatively short time, no-till improves economic performance due to lower production costs. Any increase in yield usually takes longer due to the slow improvement of soil health factors (increased water infiltration, increased soil nitrogen(N) availability, etc.).

Maryland has the largest cover crop adoption rate by quite a bit, and that is due to state subsidies. Some recent surveys have indicated that subsidies motivate farmers to try cover crops initially, but might not be needed to get them to keep using them after they see the benefits, such as improved soil quality and water infiltration.

UM: How do we measure the returns to regenerative agriculture?

MC: From an economic standpoint, it is relatively straightforward. Measuring and knowing why yields might change is more challenging. For ecosystem services, there are a few things we can measure, with some caveats. With soil health, there are up to 10 metrics we can look at; the Soil Health Institute did a paper recently that focuses on the ones they feel are most tractable on a wide soil sampling scale. Since soil health is at the core of regenerative agriculture, perhaps this is the most important target to measure. We also have some approaches to looking at soil erosion. It is generally hard to measure, but people could use the RUSLE2 model, a computer model developed by ARS that predicts erosion by rainfall and runoff. Finally, we might also consider nutrient losses. They are also challenging to measure well, but RUSLE2 approximates them.

A research field demonstrates how corn fares under drought conditions when it is grown using no-till methods, one of the core practices of regenerative agriculture. (Photo courtesy of Michel Cavigelli, D5147-1).

UM: What research is going on that might affect the ways regenerative agriculture is done, making the returns better for farmers?

MC: There is quite a bit, especially on things like improving management of cover crops to improve performance and cut costs. Cutting costs includes optimizing planting rates (seed cost is significant), selecting the correct cover crop (or mix) for the intended function (N-fixing, erosion control, etc.), climate, and soil. We recently submitted a paper looking at the impact of crop rotation diversity on crop yields (individual crops and across the rotation) using long-term data from 20 locations in North America, and the results show greater corn and soybean yields with more complex rotations, especially under poor growing conditions.

UM: Will climate change affect the returns to regenerative practices?

MC: Regenerative practices may be helpful in some ways under conditions of climate change. For instance, no-till allows better water infiltration into soil. That could increase crop yields under drier conditions.

Our initial data on crop rotation complexity suggest that returns will be higher in a more stressful growing season (higher yields under stressful conditions, but same production costs).

UM: Are there other potential benefits to regenerative agriculture, beyond soil health and possible longer-term economic gains?

MC: No-till, cover crops, and perennials in the rotation reduce runoff losses of soil (but can increase runoff losses of P and N losses via leaching—the latter relevant for no-till only). In my experience, there are often tradeoffs with most, if not all, management practices. There is no magic bullet, so the goal is to optimize all practices to address both short- and long-term production and economics, and environmental performance.