Investing in regenerative agriculture has the potential to address not only the food supply but also climate change, peace and conflict resolution and the water supply to boot. This impact investing strategy could be the biggest lever for creating positive change available to investors today. It also appears to generate healthy financial returns.
Craig Wichner, 49, founder and managing partner for Farmland LP, a fund manager that invests in converting conventional farmland to regenerative, organic farming. “It has so many benefits to the environment, to human society,” he says. “But we’re also demonstrating that you can grow a great, healthy, wonderful food and be more profitable than conventional agriculture systems.”
Farmland LP acquires traditionally managed farmland, typically used to produce commodity crops and converts it to organic using regenerative practices. Wichner reports generating gross margins of 40 to 50% on wine grapes. Margins hover around single digits for conventionally-grown commodity crops, which is why the firm works to convert its farms to other crops. He notes that returns during the three-year organic conversion period are lower.