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Outperformance DriversResilienceIn the context of farmland investment, resilience is defined as ‘the ability of an agro-ecosystem to return to its original state after being disturbed’. That is, the ability to resist and perform when stresses are applied. The most obvious stresses in a farming environment are climatic, in the form of drought and flood and pest/disease. The focus on the creation of robust and resilient agro-ecosystems underpins the Agro-Ecological management approach. This manifests itself in superior water retention in soils thus creating superior performance under dry conditions, drainage of water post extreme wet events and in more stable and healthy crops/animals. This results in greater consistency, lower costs and, most valuable of all, superior yields relative to the competition at times of supply disruptions, i.e. when commodity prices tend to be higher. Superior resilience generates superior performance of the operational farming system, profitability and ultimately in the value of the farm asset itself.Hidden ExposureThe unspoken secret of conventional agriculture is its overwhelming exposure to the cost of fossil fuel based inputs. Fertiliser and biocides are all products of the fossil fuel industry and, as critical farm inputs, are amongst the most significant determinants of farm profitability. An ecologically scientific approach to sustainable farm management actively works to minimise this hidden exposure to rising input costs. This is achieved through the elimination of nitrogenous fertiliser and the energy hungry beast that is the Haber Bosch process (see Climate Change and Investment in Ecological Agriculture), the elimination of self-defeating biocides and a concentration on feed self-sufficiency within the farm system. Rigorous Science and EvaluationAt Agro-Ecological we go beyond sustainable. We focus on the science of ecology and in particular agro-ecology, with all the corresponding rigour and discipline that implies in terms of definition and practice. The organic certification process (including annual audits) is an indelible mark of the level of seriousness with which we take the concept of ‘sustainability’, and confirmation that investors are accessing an independently measurably sustainable and responsible investment. This more ecologically literate and scientifically sophisticated approach is better adapted to the increasingly significant environmental challenges agriculture faces and fundamental to achieving superior investment outcomes. Global Climate ChangeThe detailed scientific evidence is conspicuous, material and very clear; ecological/organic agriculture is comfortably superior to conventional agriculture in terms of climate change performance. As an example, a study in the United States demonstrated 30% superior yield of organic over conventional crops. As far as the science of global climate change is concerned, conventional agriculture has been weighed, measured and found wanting. This evident truth is largely unrecognised by the investment community. This is damaging the development of genuine advances and responses to global climate change in the agriculture sector. The more positive and exciting aspect of this lack of recognition however is the opportunity it affords those with, or with access to, the requisite but otherwise remarkably scarce levels of genuinely sustainable, ecological farmland management knowledge. It is this superiority of knowledge that drives the ability to achieve superiority of investment outperformance.
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For a full list of our Investment Research papers, please refer to our Investment Research page.
Fighting climate change with grassland (FAO) The Browning of the Green Revolution (The Organic Centre) Organic Agriculture and Carbon Sequestration (FAO) Eating the Planet (Compassion in World Farming) The Myth of Nitrogen Fertilization for Soil Carbon Sequestration (Journal of Environmental Quality) Mitigating climate change through food and land use (Worldwatch) Sales of organic products in the US are rising(The Independent)
Organic Farming Delivers Healthier, Richer Soil and Nutritionally Enhanced Food (American Association for the Advancement of Science) Nutritional Superiority of Plant-Based Organic Foods (Dr. Charles Benbrook)
Researcher measures organic orchard sustainability (Stuff.co.nz) Research abstract and ‘Green revolution’ can ensure enough food for entire world (UN environment agency) The Environmental Food Crisis: The environment’s role in averting future food crises (report quoted in above article)
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