Agriculture is one of the world‘s most pressing challenges. As the human population nears 10billion people, there is more demand on our natural resources to feed them. The habitat conversion caused by increased agriculture is also one of the major drivers of climate change.
Latin America is experiencing this pressure acutely. The area has increased its global calorie production by 50% in the last 60 years - and is set to produce 127% of the regional food demand by 2030. However, the increased production has also accelerated degradation of the natural resources critical for producing large quantities of healthy food.
Implementing healthy agricultural systems is the way to increase productivity and ensure sustainability as we face a growing global population and the effects of climate change.Unfortunately, current market forces make adoption of these practices unprofitable in the short term.
Our challenge was to create a holistic futures market for the Latin American agricultural system that incorporates the long-term value of land.
An important design guideline we took from our project partner was the adage: “no one is the enemy.” In the context of the global agricultural system, that means that large for-profit companies like traders, agrochemical companies, and international retailers traditionally derided for ecologically damaging business practices shouldn’t be ruled out as potential collaborators.
Instead, we identified them as some of our most valuable leverage points.
To narrow our seemingly overwhelming problem, we focused on large-scale commodities like soy and grain. We identified commonalities across countries like the land use cycle - how forested land is first purchased for cattle ranching and then sold within the decade for crop production.
We approached the problem with the intention to bend the traditional linear value chain and create new relationships between stakeholders.
The outcome of this project is a three-pronged platform targeting producers, large-scale traders, and socially conscious consumers in an effort to redesign agriculture in Latin America.
Through a collaboration with the national government, producers are assigned an accurate assessment of their level of sustainable agriculture behavior in the form of a land score. As they improve upon their score, they receive increased access to financing, training for conversion to regenerative agriculture systems, and better relationships with traders.
Traders are also assigned a similar version of a land score comprised of an aggregate of the scores of the producers they buy from and a reflection of other reforestation initiatives in which they are involved. NGOs and governments can put forth projects for bidding, like a particular region in need of habitat recovery. In exchange for traceability throughout the value chain, traders unite in a trade association. They gain more visibility to foreign investors and secure the profitability of their business in the long-run.
Socially conscious consumers are brought into this system through a low-return investment process that defrays the prohibitive costs of conversion to sustainable practices on the producer level. At scale, the land score provides an effective screen for foreign investment services seeking opportunities that align with pro-environmental values.
A major highlight point is the rapidly changing landscape of Latin American agriculture that added complexity to the challenge but also opened the door to new solutions.
With developing technologies like improved satellite data and blockchain infrastructure, stakeholders are better able to increase traceability in the value chain, a common barrier for success.
Additionally, rising demand from countries like China and India has disrupted long-standing export behavior and trade relationships. It has placed more pressure on the system to increase yield, exacerbating unsustainable agricultural practices and shortening the timeframe of productive years of the land
There is also a growing consciousness of the importance of environmental and social sustainability. More than ever, consumers want to know where their food comes from and its environmental impact. Large retailers and traders understand that the effects of climate change will place the future of their businesses in jeopardy, and as a result are more willing to collaborate on projects that don’t maximize profit in the short-term.