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A few years ago, I created a professional mission statement for myself — using the powers of business and storytelling to inspire a sustainable future. Today is a big milestone in achieving that mission as I introduce myself to the Food Weekly community as the latest addition to the GreenBiz food systems and nature team. While I am not superstitious, my journey to today has left me feeling a little stitious like Michael Scott.
Going forward, you will be seeing my name in your inbox as Theresa, Jesse and I collaborate to bring you the latest from across the food system. With my first article, I’m going to explore the agroforestry landscape in the United States. Why? Because it may be the most underused regenerative agriculture technique given its potential for positive climate impact.
An effective yet overlooked tool
Agroforestry is defined by the U.S. Department of Agriculture (USDA) as “the intentional combination of agriculture and forestry to create productive and sustainable land use practices.” In temperate climates, there are five main agroforestry practices: alley cropping: planting crops in between rows of trees; silvopasture: incorporating trees, pasture and forage into a single system; forest farming: growing crops under a forest canopy; riparian forest buffers: maintaining trees, shrubs and grasses along waterways; and windbreaks: lining fields with trees to protect crops and soil from wind
According to Project Drawdown’s 1.5 degree celsius scenario, these agroforestry practices have greater carbon sequestration potential than regenerative annual cropping, the form of regenerative agriculture getting the most attention today. Silvopasture has the highest potential for carbon sequestration of the agriculture techniques included in Project Drawdown’s solution list and could be 82 percent more effective at drawing down carbon than regenerative annual cropping systems if scaled to its full potential. Beyond carbon sequestration, agroforestry systems also deliver better water quality, soil health and biodiversity outcomes than simplified row crop agriculture. The evidence points to the increase in biodiversity as a driver of the improved land performance.
To understand the state of agroforestry business in the U.S., I caught up with Ethan Steinberg, CEO and co-founder of Propagate, one of only a few agroforestry startups in the U.S.
As regenerative agriculture’s re-emergence started gaining momentum in 2017, Steinberg’s entrepreneurial journey began with a question, which he recounted to me: “Why is nobody talking about trees given that from an ecological standpoint, trees are — by a landslide — the most effective tool in the toolkit? What’s going on that’s keeping trees from being a more central piece in the narrative around regenerative agriculture?”
Steinberg and his co-founders, Jeremy Kaufman and Harry Greene, found that farmers, service providers, agronomists and agrifood companies lacked clarity on the economic value of the trees and struggled to determine which trees were right for a farm’s economic, ecological and geographic characteristics. There were no agronomic tools for landowners to consider agroforestry as an option and no appropriately structured financing available for transitioning farmland to agroforestry, so they would simply not consider it.
Propagate’s approach to agroforestry at scale
Based on the conversations with stakeholders across the food system, Propagate’s business model began to take form with a focus on supporting farmers and landowners with technology and financial solutions for agroforestry transitions.
First up was Overyield, a software product that helps farmers understand key variables such as costs, revenues, yield projections and labor needs that can be used to make informed decisions.
I saw how Steinberg was answering the back half of that question about trees he first raised to me. Software and digital tools in agriculture give decision-makers an organized view of the economic, environmental and social benefits that nature provides. By synthesizing multidimensional data sets, it provides a clear view of the value nature provides. It enables us to work with nature instead of against it.
A second component of Propagate’s model provides context-specific financing for farmers and landowners looking to transition to agroforestry. Steinberg looked to the solar industry where models such as Wunder Capital and Mosaic have been successful at leveraging finance for projects. With these models as a framework for adaptation, the Propagate team launched a financing vehicle, Agroforestry Partners, in collaboration with food producer Cargill and speciality investment advisor Walnut Level Capital.
The value of the agricultural goods far outweighs the value of the carbon at today’s prices.
Through this model, Propagate leases a portion of a farmer’s land and takes over the operations of that land to plant trees such as hazelnuts and chestnuts while paying a leasing fee. Instead of a traditional crop business that requires an upfront investment to plant, grow and harvest before any financial return can be realized, by leasing out the land the landowner is able to get income from the very first year. This is especially important for tree crops because it can take 10 years for these trees to produce a profitable crop. Agroforestry Partners is the money backing this business model by aggregating investors to pay the leasing fees. The investors then get their returns from the sales of the tree crop harvests.
Along with operating the tree crops, Propagate supports farmers and other key stakeholders along agroforestry value chains such as geneticists, nurseries and processing facilities with technical assistance and knowledge sharing.
As Steinberg explained the financial model to me, I was waiting for the point where carbon offset payments came into the calculation. It never did. When I asked about them, he said, “The value of the agricultural goods far outweighs the value of the carbon at today’s prices.” He added that they have detailed baselines and feasibility studies so that they understand the carbon potential but that the financial model stands on its own without needing offset payments.
While Propagate has been making headway on simplifying agroforestry for farmers, there is still a long way to go. Currently, less than 1 percent of U.S. agriculture uses these practices. Given the gap between practice uptake and its potential for climate impact, you might expect the practice to be central in the USDA Partnerships for Climate-Smart Commodities projects.
However, just 2 to 7 percent ($60 million to $187 million) is going to scaling agroforestry practices of the $2.8 billion in funding to over 70 large-scale climate-smart commodities projects in the program. Only one project, expanding agroforestry production and markets, led by The Nature Conservancy with Propagate, Cargill, Danone, Simple Mills, General Mills and Applegate along with a large network of technical and academic partners, has the practice as its main focus.
While a small share of the federal funding pie is going to agroforestry, I’m optimistic that it represents momentum that will accelerate going forward. Kris Johnson, director of North American agriculture at The Nature Conservancy, shared that agroforestry has been an underused tool in the NGO’s toolbox to date but that they will deploy it at a greater scale going forward. “The priority outcomes we care about in agriculture include more resilience, more diversity, better habitat for biodiversity, better impacts for water and for climate and improved livelihoods for farmers and rural economies. Agroforestry checks a lot of those boxes,” he said.
Steinberg is hopeful that the grant will help provide the infrastructure the industry needs to scale and that the USDA can point to it in the future as a successful project that demonstrates agroforestry’s importance for both the environment and farmers in this country.
This article originally appeared as part of our Food Weekly newsletter. Subscribe to get sustainability food news in your inbox every Thursday.