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AGRO-ECOLOGICAL BLOGRise of the Ecologically LiterateI was at recent agricultural investment conference where I met a number of interesting people, including people at various stages of researching farmland as an asset class and those quite active in the sector. The most positive aspect was the level of interest in farmland and agriculture. I was not however entirely convinced that the true nature (full picture) of the agri/farmland theme was fundamentally being interpreted correctly or at least that ecologically based issues were uppermost in people’s minds. One thing in particular struck me and that was soil was not even mentioned until day 2. This was slightly disconcerting given that soil is so entirely fundamental to food production and life as a whole. On the subject of soil an agronomically focused PHD bearing colleague of mine thoroughly recommends the book ‘Dirt’ by David Montgomery which I have not yet had the pleasure of reading. It is important for anyone interested in agriculture, which should mean anyone who finds value in eating, to at least have some understanding of soil and ‘Dirt’ might be a good place to start. The fundamental theme, the genuine ‘elephant in the room’ when it comes to agriculture and farmland operation/investment is ECOLOGY....and how often do you see that word associated with farmland or agriculture or food production.....not often if at all. They actually combine quite well to make ‘agro-ecology’. It is ecology (agro-ecology) that underpins all functioning agriculture and damaged ecology that underpins all non-functioning (or underperforming) agriculture....of which there is plenty. There is however a colossal disconnection between the two which is far and away the dominant reason for the majority of the issues/limitations facing agriculture. The understanding, enhancement and intelligent optimisation of ecology is essential to generating a healthy, genuinely sustainable and profitable agriculture. An agriculture that actually responds, adapts and achieves resilience in the face of the relevant pressure points/themes confronting agriculture (water, climate change, soil erosion/degradation, oil etc). In agriculture we create the most robust, resilient and sustainably profitable enterprises through the application of agro-ecological understanding. As the IAASTD state in their excellent report “Business as usual is no longer an option” although I am not convinced this reality has made much progress in the wider agri-sector. We don’t always hear what we don’t want to hear. This report is hardly one alone on this theme either. There are many (many!) papers that cover specific aspects of this broad theme from many angles and that are all remarkably clear cut in their findings and therefore of course their consequences. The drive around ecosystem services and the bringing together of economics and ecology to better support positive outcomes is an incredibly exciting area. The basic idea being that if we can value these ecosystem services e.g. water quality, bio-diversity, soil carbon sequestration etc etc and create a mechanism for exchanging value then those who create and optimise outcomes in these areas can achieve additional income streams and therefore profitability which makes for a big incentive for others to follow suit. Tim Gieseke explores this concept in his forthcoming book EcoCommerce 101. The Economics of Ecosystems and Biodiversity (TEEB), UNEP FI and many others are all pursuing this theme, this critical need. That is the need to incorporate the ecological, not just in agriculture but in all human activity. From an investors point of view and that means anyone active in the agri sector from a small tenant farmer to an institutional fund manager or global food business, this is an area of material risk but also opportunity. A better understanding of environmental services, their value and the means to reward those generating positive ecological outcomes is one of our best means to eliminating ecological-illiteracy and therefore unsustainable practices (and their consequences). It offers the prospect of rewarding those with the relevant knowledge and acts against those who are not sufficiently well adapted or capable......the literate thrive and the illiterate whither....a true expression of genuine ecology in action.
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