Regenerative Capital: Aligning Intention with Reality

Like regenerative agriculture, regenerative capital needs to be looked at from the perspective of what it regenerates, how this capital is different from traditional extractive approaches, and the process by which the intended regenerative outcomes actually materialize. By understanding and applying the mindset and approaches that we use to build regenerative agriculture, we can also begin to understand regenerative capital frameworks.

In regenerative agriculture, the goal is to engage in processes that result in healthy ecosystems. The regenerated landscape is capable of performing its basic bio-physical and chemical processes only as biodiversity of fauna and flora above and below the soil is managed for this purpose. An ecologically regenerative outcome is not the result of a single agricultural practice or input elimination, rather a complex system that can be best understood when removing the colonizing mindset of conventional extractive systems.

Developing indigenous-based land management can be done by deeply studying any given ecology. Defined by the geo-evolutionary processes that determined the diversity of life, soil structure, and the resilience of the species present, the indigenous mindset is the product of years and generations of training the mind, the body, and the spirit to be in alignment with evolution, and natural research and development.

On the capital side, ensuring an interconnected network of players to dedicate investments in support of this process of healing and reweaving of the natural pathways is central to any regenerative capital framework.

From an indigenous ancestral understanding of regeneration, a farm cannot be regenerative on its own. Only at an ecosystem level can the conditions for regeneration come together. This involves larger-scale application of coordinated practices. As ecosystems reach regenerative conditions the outcomes materialize, along the path from conventional to regenerative. These outcomes include soil improvements, plant biodiversity, and introduction of animals to manage the landscape. The increase in amount and diversity of output per acre will continually generate benefits at a farm level.

However, soil tiling, ditches, tilling, heavy equipment, are all part of an extractive system and their impact does not just disappear overnight. The fragmentation of the landscape, one of the most important ecological disruptors and barriers to regeneration, is not easy to fix. It requires farmers working the land and absentee landowners coming together to reconnect wildlife corridors and rebuilt wetlands.

On the capital side, ensuring an interconnected network of players to dedicate investments in support of this process of healing and reweaving of the natural pathways is central to any regenerative capital framework.

The concept of regeneration needs the perspective of an indigenous mindset, not the colonizing framework of capitalism. The business ecosystem includes those who own and control land management, as well as the marketing, branding, and distribution of products. How that wealth is accumulated and reinvested in the system is central to regenerative capital frameworks. If an investor is not directly part of the land system, how can they be part of a regenerative business ecosystem? If an investor sets terms focused on the repayment capacity or return on investment when providing capital to new operation, this capital cannot be called regenerative. It is simply out of sync with the process of regeneration.

The ecosystem-level view of the landscape is central in order to codify a process that can give us a better path towards how capital investments may deliver regenerative outcomes. To do this, let’s visualize “mother earth.” Right now, this mother is sick and unable to properly function. She cannot support a diversity of life to deliver high quality foods. The energy flow across the planet has been disrupted, polluted and exterminated which eliminates the earth’s capacity to support hundreds of thousands of micro-climates that are responsible for her health. That mother, as sick as she is, still wants to heal. With a little help, she can. There must be an understanding of this before defining regenerative capital.

  • We must restore her to health. This means restoring her organs like water reservoirs, fungal communities, land and ocean infrastructure that form her organs such as wetlands, hydrology of the soil, coral reefs, rainforest and rivers. Plant biodiversity can bring carbon back into carbon-based life, repair and let heal of the lungs of the planet–the forests. As this happens, she will start again generating the outputs we need. The first step is to invest in her, to give back, all of this is for her to keep. Capital to remove damaging land tiling infrastructure, for example, wetland restoration, and storm water management that can be used to restore biological diversity. All of these investments are to be made with the return of the earth to health as the primary goal, so she can operate as a living organism again.
  • As we engage on the initial process of regeneration, we continue to restore the biophysical and chemical systems we have disrupted. These define the magnificent capacity of an ecosystem to cycle energy. Ecosystems evolved to transform energy efficiently from solar into plant biomass through photosynthesis, from which thousands of animal species depend. Animals break down those photosynthetic outputs and feed the soil biota, this in turn increases the photosynthetic capacity of plants and builds soil biomass and the ecosystem’s capacity to support more species.
  • The practices implemented, although purposed for generating harvestable energy to meet human needs, must aim to re-establish the natural biophysical and chemical processes that allows an ecosystem to regenerate and evolve. A regenerated ecosystem needs little or no outside inputs. A farm within an ecosystem may need inputs from other parts of the geographical region where it resides, but the ecosystem as a whole does not. To achieve regeneration requires more than just land-based practices, policies and regulatory frameworks must also be put in place to defragment the ecosystem so that new wildlife corridors are established, wetlands restored, migratory birds habitat rebuilt, native species replanted, and within all of this, the reintroduction of critical foods, fiber, and livestock.
  • The result is an accelerated optimization of energy cycles and energy outputs in the form of fruits, vegetables, meat, nuts, grasses, etc. Even as some harvests become an income source, investments continue to be made for the restoration of the health of the ecosystem. As harvestable ecosystem outputs improve, so do the ecosystem services such as water quality, carbon sequestration, elimination of soil loss and water retention. One way to recodify current agribusiness subsidies, is to instead provide those funds to communities so that the capital can go directly to support the ability of the public to pay the real price of food directly. Paying it to the industrial food system as it is done today still costs the tax payer – in terms of the degradation of Mother Earth and degradation of human health and nutrition, but it gets pocketed at the top. When all costs are balanced, regenerative agriculture is a far less expensive way of feeding the world.

A regenerative framework starts with a tridimensional understanding of the ecological landscape. It seeks to optimize the biophysical and chemical processes involved from deep in the ground all the way to the height of the highest canopy. How specifically this tridimensional energy transformation infrastructure is established and managed will vary depending on economic, social, and ecological outcomes the community is pursuing. To illustrate this process, we use the regenerative poultry framework currently deployed in the bordering region of MN-IA-WI at the hands of a rapidly growing business ecosystem led by the Regenerative Agriculture Alliance.

Phase I: Initiate a Systemic and Rapid Recovery of the Ecosystem Health

Systematization of transition. For the regenerative poultry system this means – planting perennial pastures, perennial understory species (hazelnuts or elderberries, or both), breaking tiling systems to restore the hydrology of the land, plant tree species, capture carbon in any way possible (trimmings, chipping, spread manure, mow pasture). Build poultry production coops and perimeter fencing infrastructure and initiate poultry production. All of this can be done in a single year, enabling poultry production the following year. During the first phase (first three years) a jungle-like habitat will develop.

Phase II: The Return to Productivity

This phase focuses on restoring the foundational land-based infrastructure for regeneration of the ecosystem. The landscape has healed significantly during the first phase of regeneration. As the ecosystem strengthens it starts to generate an energy surplus that is edible by humans and can be harvested, as well as energy that is not edible for humans but that is edible to trillions of macro and microorganisms. This phase can begin to deliver material returns on investments while continuing to improve on the energy transformation infrastructure.

Phase III: The Optimization of the Regenerative System

This phase will see regional integration of activities on the land and an alignment among farming operations so that aggregation of individual large, medium, and small farms can be coordinated for consistent and standardized output, agronomical advancements, research and development, collective organizing and regional governance structures. Capital infrastructure can be installed, product aggregation, processing, marketing, branding, distribution can be organized at scale. This phase has the capacity to regenerate economically, ecologically, and socially.

It is only at this point – at the optimization of the regenerative system – at which the investor can foresee recuperating their capital.

Building regenerative capital frameworks and measuring expectations based on the regenerative systems framework above can serve to better align the intentions of investment in regenerative agriculture with the actual outcomes.

And finally, it is hard to imagine that a regenerative outcome is possible without placing serious boundaries around the power of capitalism to generate the conditions that drive individuals to extract profit from the land. Governance infrastructure to keep this capital accountable is critical. Without this accountability, the capacity of the investment to be regenerative can be eliminated, and replaced with a few extracting once again. With such limitations on the power of capitalism, the chances of ensuring that the ecosystems can regenerate and continue to do so in perpetuity are greatly enhanced.

Reginaldo Haslett-Marroquin is a recognized leader around the world in the movement away from extractive systems and toward regenerative agriculture systems. He is co-founder/CEO of Tree-Range Farms, farmer Salvatierra Farms, founder/board president Regenerative Agriculture Alliance, and co-founder of Regenerative Agriculture Solutions.