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🌎 Latin America’s Role in the Rise of Regenerative Agriculture
Policy: If the goal of regenerative agriculture is planetary restoration, the Americas will have a catalytic role. While The Regeneration Weekly mainly focuses on the U.S., our ecological and agricultural systems are so intertwined that our southern neighbors merit much more attention - and investment in opportunities. Be it in addressing agricultural overproduction, scaling regenerative coffee, or cutting through the chicanery surrounding grass-fed labels, isolationist thinking will not lead to a more nutritious food system with positive environmental outcomes.
The stakes are high in Latin America, as the region hosts over 50% of the world’s biodiversity, 31% of its freshwater, 12% of its mangrove forests, and the largest expanse of wetlands. The region’s economies are largely built on natural capital and resources, but the extractive nature of many of these industries. By 2028, 25% of all global agricultural and fisheries exports will be from Latin America. In particular, 46% of agricultural GDP comes from livestock, which is mainly focused in Brazil, Uruguay, Paraguay, Mexico, and Argentina. Brazil is home to the world’s largest commercial cattle herd, with over 200 million head. Furthermore, the region provides over 60% of the world’s soybean exports, 44% of the world’s imported beef, and a third of its corn.
As the most biodiverse region on the planet, and now as the world’s largest net food exporter, Latin America is positioned to show the world how biodiversity can be a core source of agricultural productivity and profitability. While its importance as a global food provider continues to grow, that growth has come at a price and many challenges remain. The World Bank recently reported that two-thirds of Latin America’s farmland has already been degraded, and studies show the region’s agriculture sector has become a leading global emitter of greenhouse gases. Meanwhile, the convert-and-deplete approach to farming continues to threaten some of the world’s most environmentally sensitive natural habitats – from the Amazon forests and Argentina’s Gran Chaco to Colombia’s Orinoquia and through to the biodiversity hotspots of Central America and Mexico.
Let’s consider the following two graphs:
Land-use changes, such as deforestation for agriculture purposes, are the biggest driver of environmental degradation in Latin America. In Argentina, for example, this accounts for 94% of the loss of ecosystem services. Put financially, the costs are roughly around $75 billion when considering the sustained loss of land values, biodiversity, and other forms of natural capital. The Brazilian Cerrado region is another key example. We previously wrote about it as a case study in enhanced weathering for industrial agriculture purposes, but 45% of what was once a “mosaic of natural habitats” has been cleared for agriculture. This has negative feedback loops in hydroecology, yet the bubble in agricultural land in the region (perhaps driven by consistent agricultural returns) has led to continued land conversion.
However, there are strong tailwinds supporting a transition to a truly regionalized, regenerative system - as well as many folks already practicing it. The agroecology movement in Latin America is one of the most powerful advocates of ecosystem-level thinking in agriculture. It borrows from traditional and indigenous local farming practices and combines it with experimentation free of pesticides, GMOs, and other agricultural innovations from the Green Revolution with negative externalities. This being said, agroecology was born as a resistance movement to neoliberal policies that swept the region in the 1970s, and so it never received multinational corporate nor elite political support at the time.
Specific behaviors have still emerged over the past decades and now, as we have noted, many multinational corporations are making regenerative commitments that will take place on the ground in Latin America. In the absence of specific subsidies and government-related crop insurance practices, Latin America has experienced a much faster and greater adoption of no-till practices than the U.S., with Brazil coming in at an estimated 75% no-till adoption rate. The economics of no-till make for a great fit in tropic soils and potentially drier climates. Even now, the Brazilian government has committed to cutting carbon emissions from its farming sector by over a billion tons by 2030. Various on-the-ground networks of producers have led the charge towards more regenerative practice. A key example is Ovis21, a hub for regenerative grazing helping hundreds of pastoralists across thousands of hectares throughout Argentina with technical assistance and environmental monitoring.
The change will be driven two-fold in Latin America: finding the right practice adoption and technical support for said conversion, and attracting capital to finance said conversion, be it through multilateral entities or private capital. The change will occur with both the continent’s 14 million smallholders and the larger, corporate outfits that have been taken to task for overgrazing and deforestation.
The Mustardseed Trust recently funded and released a report focused on scaling regenerative that hones on three key areas: livestock, agroforestry, and broad-acre annual cropping. Growing practices like silvopastoralism can make a massive impact on smallholder producer viability with a massive As more pilot projects prove the economic viability of regenerative transitions to local financing bodies and philanthropic capital, such as seven recent FAO projects over tens of thousands of hectares, landowner adoption and investor capital will become more prevalent.
As Mark Tercek puts it in his article, “ETFs for the Amazon? LBOs for Biodiversity?”, the rise of natural capital will enable a diversity of financial instruments focused on regeneration. Be it through the new post-COP 26 international carbon markets, Amazon’s recently launched Agroforestry and Restoration Accelerator with TNC, via instruments like a recent $215M bridge loan to protect 150 million acres, or one of the other 156 nature-based solution projects currently active across Latin America, Mark’s understanding of the evolution of natural capital is materializing. The Global North has an opportunity to fund the regeneration of the Global South at a profit to all parties involved - we must not squander it.
Travel: Following our regenerative agritourism piece last week, two readers (h/t Anthony Corsaro and Dan Miller) separately recommended checking out Yonder, which is “purpose built for farmstays and founded by a farmer.” The experiences - directly tied to ranches and farms across the nation and internationally - are tied with helping stewards get capital to regenerate landscape and helping vacationers experience nature.
Additionally, if you’d like to keep reading more about agritourism - check out Dan’s piece on the rise of on-farm hospitality and check out Steward’s forthcoming content series on the matter.
Disclaimer: The Regeneration Weekly receives no compensation or kickbacks for brand features - we are simply showcasing great new regenerative products.
If you have any products you would like to see featured, please respond to this newsletter or send an email to Kevin(at)soilworksnaturalcapital.com