How can start-ups tackle the challenges of natural resources management for sustainable supply chains in agriculture and forestry?
Tuesday, Jul 18, 2023
On Monday, March 27, 2023, we hosted a pre-Forum event asking the question ‘How can start-ups tackle the challenges of natural resources management for sustainable supply chains in agriculture and forestry?’. This article is a summary of the discussion.
Natural resources management can be challenging enough on its own. Doing it sustainably adds a few more levels of difficulty, from the planning, production and delivery of natural resources to the impact on ecosystems to the innovations needed to optimize our use of natural resources and promote stronger ecosystem services.
Yet, those challenges and more are what a recent online pre-forum session for the Forum of the Future of Agriculture looked to tackle. Bringing together three small-business leaders from the agriculture and forestry industries – Ivo Degn, CEO and co-founder, Climate Farmers; Georg Koenig, COO, Kiebitz; and Alexander Vilsmeier, Forestry Expert and Sales, Tree.ly – the webinar was a discussion on how different start-ups approach these challenges and positive steps for the future.
As the president of the Committee of the Young Friends of the Countryside (YFCS), Marie-Christine Schönborn was able to lean on her expertise supporting young rural entrepreneurs through YFCS to moderate the discussion. She had an innate understanding of how the agility and innovative thinking of small businesses are exactly what is needed to answer the call for sustainable management of natural resources, and her focus throughout was to help those understand and support the viewpoints the speakers shared to inspire more entrepreneurs like them to help solve these challenges.
Being a farmer, himself, Koenig acknowledged he has the deepest motivation to make environmental protection a profitable business case for farmers and foresters. Problem is, there’s a €700 billion annual funding gap between those who want to rebuild our ecosystems and the money they’d need to do it. That’s where his company, Kiebitz, hopes to close that chasm by helping channel private investments into the building up of trustworthy nature capital solutions. At the same time, they’ve created an app that helps farmers share pictures of any biodiversity measures they’ve implemented to help get government subsidies, with more pilot programs in the works all centered around funding environmental improvements throughout Europe.
For Vilsmeier and Tree.ly, it’s not a monetary problem they’re trying to attack but an awareness issue, saying they’re in business to “unlock the full potential of our forests ecologically and emotionally.” By connecting societies and companies with data-driven technology and software, they’re pushing for a better understanding of forests’ impact to drive better forest management. They currently create digital representations of forests, allowing them to accurately show CO2 storage (with future plans to provide biodiversity estimates for things like water, reservoir capacities, etc.). Once the CO2 storage is understood, they bring trading partners, companies and enterprises together with the forest owners to create a collaborative effort.
More funding and awareness are huge efforts towards improving natural resources management, with Degn and his team at Climate Farmers seeing a scaling interest in things like regenerative agriculture in recent years. Where his company comes in is focusing on building the infrastructure to handle the increased scaling. Often, farmers pioneer these efforts but ultimately work in silos. By creating networks, communities and conferences, Climate Farmers works with farmers to connect them with other farmers on the same journey. Climate Farmers even takes it a step further in those connections by matching farmers with financing opportunities.
With so many innovative ideas and concepts shared, questions began to stream in from viewers on topics like carbon credit generation, regenerative agriculture, subsidies and more.
With a direct question to Degn about subsidies, the CEO acknowledged there are skeptics who feel the regenerative agriculture business model is not sustainable unless there’s a subsidy. Fortunately, its increased usage in recent years has created increased data showing it can be sustainable. But the important part is understanding the business model and yield are two separate parts of the equation, and profitability should be the focus. Because if it is, Degn says regenerative agriculture is the clear choice. Yet, there still needs to be a shift from policy makers to “paying farmers for the outcomes, not subsidies.”
That led into the idea of how we’re going to be perceiving the role of farmers in society in the future. According to Koenig, regenerative agriculture will “put the farmer at the center of attention,” as it puts value creation back to the farms not needing to buy as much fertilizers and other products they needed in the past. Then it’s a matter of seeing their increased value (and subsequent increase in pay) not just from yield but environmental impact at the societal level.
Vilsmeier completely agreed with his fellow entrepreneurs, but then posed his own question: Is it possible to combine subsidies and public funding with afforestation with the project? He acknowledged it’s possible, but it’s a cumbersome process, and ultimately, he believes it’s through innovations and not subsidies that a true impact will be made in this space.
As for the question of carbon credits, Degn and Vilsmeier addressed it on a number of fronts, from standardization to prices to the support needed to make the program more successful in the future.
Schönborn then asked the panel for any final messages, with all of them focusing on the understanding that what they’re tackling is a huge task, but by working together, it’s one that can either improve or completely transform agriculture for the better.