Hailey Morris, Executive Director of her family office The Morris Group, is an experienced investor and a leading voice in the move to leverage capital to transition to a healthier food system in Australia. She is also co-founder of environmental non-profit Sustainable Table and a software and consultancy business, Impact Sustainability. At last year’s inaugural RFSI Australia event, Hailey shared what she’s learned in 12 years of investing in this space, how she qualifies the opportunity, the barriers that exist, and how capital and resources can provide pathways forward.
The following is a transcription of what Hailey shared at last year’s RFSI Australia event, edited for clarity. Be sure to join us for this year’s RFSI Australia event to learn how innovators and investors continue to address these.
Hi everyone. My name’s Hailey Morris, joining you from Barragunda Estate, the family farm of the Morris family, which I’m a part of. We’ve had this property for about 22 years now and we also have a family office. Within that family office, we have investing as well as philanthropy, and we’ve made a focus of regenerative food systems more broadly for about 12 years now. I’ve personally played a relatively active role, both in that granting and the investing and also in the on-ground activity from a not-for-profit perspective, as well. So, I guess you could argue, I’ve had some good time to have a look at what I think that this system needs to help it progress and to broadly look at the question about why hasn’t practices like regenerative agriculture become the norm, despite the benefits of what we are seeing around productivity, product quality, and our farmer’s mental health.
Barriers to Transition: A Barragunda Estate Case Study
I’ll tell you a little bit about the property here. We’re on about 1,200 acres, which is about 400 hectares, and we have a mixed enterprise of cattle, sheep; we have an orchard and we have a market garden. We (back in 2021) are only about 18 months into our regenerative journey, which might sound surprising considering the amount of time we’ve been focusing on it from an investing and a giving perspective. But I think looking at why this has taken us some time to get started is interesting in itself for clarifying what are some of the challenges that we are seeing and experiencing amongst farmers and why they’re not taking up these practices as quickly as we’d hope.
The first ones to talk about is cultural issues. The previous farm managers were very resistant to change and every new practice or idea that was brought to them was more broadly considered to be different and therefore often found the reasons why it wouldn’t work. This leads into the second point around succession. Their main area to report was to my father and although he’s very on board with the changes we’ve made now, at the time he was taking advice from his farm managers and therefore we didn’t get a lot of movement.
We also had a technical knowledge gap and we weren’t really sure where to go, where to get the best information, or where these education resources were. We also didn’t know what farmers in our local area were doing to learn. Finally, of course, there were the costs. Even though the cost isn’t necessarily a barrier for us, understanding the amount of costs and the change is still significant. All that and of course, we don’t really want to jump in, if we don’t really know what we are doing.
That’s a bit of our journey since we’ve made the changes. It has been amazing to see how quickly the farm has responded to some relatively small management changes, which has given us the real confidence to make some much larger changes and some much larger investments on the farm.
Australia’s Food System
I’ll take a step back now and just talk more broadly about the food system here in Australia and this transition that we’re working towards to a more regenerative food system with regenerative agriculture at its heart. I’ll look at what I feel like I have seen over the last 12 years, and look at where I feel like we’re not progressing fast enough because there are some key areas.
Firstly, I think there’s been a real lack of coordination and connection with the work that’s happening on the ground. People are really working in silos, not learning from each other as much as possible, and we’re not telling stories, therefore the amplification of change is generally limited.
There’s some fabulous research which has taken place. However, research often happens by research organizations who are not necessarily skilled in the appropriate communications and advocacy about how we can make that change within an industry and government level.
Innovation has really been stifled through government grants, which has been the main source of funding into research. They’ve also got very specific terms of reference and what they’re after to achieve. So the regenerative agriculture movement has really found this to be limiting.
There are also some key gaps that exist, and now that we have a better sense of the pathways that we think need to be invested in for change, when we are missing a gap within these pathways, because of the interdependence of the systems, it can cause blockages and really limit the amount of change and the transition that needs to take place.
The last point I wanted to make here was that a lot of the work that is taking place is not necessarily funding ready and that both crosses across philanthropy and investment. So there is a real role to be played from an investment perspective to help businesses and enterprises through an incubation process before they’re ready for funding.
Opportunities for Investment
What are the opportunities for investment into this space that I can see? My thoughts and opinions on this have really been driven by a piece of research, which we conducted last year called The Blueprint for Impact: Regenerating Agriculture in the Great Barrier Reef Catchments. We specifically chose this region because the great barrier reefs biggest challenges at the moment are driven by climate change and agriculture runoff. Regenerative agriculture really gets to the heart of both issues in one solution. This piece of research involves speaking with over 50 people, practitioners, and experts across the spectrum within the food system and asking them what they thought was needed to transform the food system. This led to the development of seven pathways, which have been due diligence framework for how we assess what needs to happen.
To support these pathways, we have investment principles, which we believe are important that all of these projects are investments really have at their heart to ensure success. Four of the pathways are really around knowledge and culture, similar to the challenges that we’ve experienced on Barragunda. Three others are around economic drivers. Here, I’ll talk more about transition finance – where there’s a bit of activity happening. I’ve chosen to actually talk about transition finance while standing next to some fencing, which we have been in the midst of putting in place at the moment. This is obviously a hugely capital intensive and labor-intensive process, and we are putting it in place to be able to do managed rotational grazing with our cattle
Transition finance models that I’ve seen often come in the form of debt or lower interest rates or refinancing of debt. Even in Australia, our banks are quite engaged in this process because they’re understanding that farms that are managing their natural capital and undertaking practices like regenerative agriculture provide a lower risk to them in the long term. They’re interested in ways that they can measure this so they then can provide lower debt. Other models I’ve seen around bonds that provide lower interest for transition finance. While I’m supportive of all this, I’m also mindful of the fact that debt is also a large issue for our farmers and many of them are at such high levels of debt, that it is difficult for them to be thinking about any new changes because of the risks involved. So, I think for these models to be successful, we really need to make sure there’s wraparound services involved, trusted parties are involved to the farmers, and it’s not just a form of debt, but really a whole model around education and support.
Another one of the pathways we identified was payments for ecosystem services and markets that support these, for example soil carbon credits, forestry carbon credits, and biodiversity credits. What I like about these programs is that they’re rewarding for farmers, for looking after areas like this, which is our native vegetation area and it’s also encouraging farmers to be looking after their soil health and increasing their soil carbon, which we know is at the heart of regenerative agriculture. Opportunities for investors in this area are around funding the upfront transition costs for farmers and being paid back through these credits and the opportunity to be receiving income from them. This way, the farmer receives the longer-term benefit of the productivity and profitability gains on the farm, as well as the long-term income from these credits payments. In addition, we are finding that, uh, funds that are managing properties and converting them to regenerative agriculture are being able to use these markets as a way to be much more profitable than some of the other more traditional, conventional agriculture managed funds.
The final pathway that I wanted to talk about is investing in the move to value-based supply chains. What we mean by this, is moving away from commodity markets and ensuring that we are properly valuing products for the nutrient value and health benefits that they’re providing to consumers or eaters. Opportunities for investment into this space are really around the following:
- the development of new or investing into existing emerging brands that buy exclusively from regenerative farms;
- localized infrastructure, such as food hubs that support the shortening of the supply chain and allow producers to really showcase what their product is and how it’s different from the norm; and
- localized processing such as flower mills or even mobile avatars.
Our parents used to tell us that eating an apple a day keeps the doctor. Unfortunately, it’s not as simple as it used to be because the nutrient density and the health benefits of the apple that is grown here at Barragunda Estate is remarkably different to an apple that I would pick up on a supermarket shelf. At the moment, there’s no way for us to know that, other than the fact that this one tastes great and likely better than the other. We need ways that we can measure effectively the performance of the farm, as well as the actual nutrient density of a particular product. When that is achieved, I think we’ll also see much greater control and demand for this sort of (regenerative) product coming from the consumer, which will also help this transition.
The barriers and opportunities that Hailey discusses are as much true today as they were a year ago… BUT regenerative agriculture and natural capital has continued to expand in the past 12 months, as has interest and investment in the space. Be sure to join us for this year’s RFSI Australia event to learn from those investing in the space and those doing the work on the ground.