WHY ONTARIO’s REGENERATIVE AGRICULTURE CANNOT GROW TODAY

The elephant in the room

During a project with EFAO, I conducted in-depth interviews with around 15 farmers on why they shift to farming regeneratively, and barriers for this shift. The responses were quite staggering: There is almost no further potential to increase deeply regenerative agriculture in Ontario.

Donella Meadows taught us that change-makers are successful if they chose the right leverage point. In Southwestern Ontario, landscape degradation is rampant – and agricultural intensification is the main driver. However, I believe that agriculture is not the root cause – and farming has almost no agency for change, given our current policy context.

What is regenerative agricultural production?

When transitioning to regenerative farming, farmers must first invest into rebuilding healthy soil and a biodiverse ecology. This increases the soil carbon stock and also accelerates the cycling of carbon, nutrients, and water (Fig. 1).

• In a degenerative production system, soil carbon levels are low and soil microbes are not capable of supplying plants with nutrients. So farmers rely mainly on external inputs to manage nutrients and plant health. Unfortunately, the external inputs (especially fertilizers, fungicides) further destroy soil microbiology and soil carbon – a vicious cycle. With agrochemicals and machinery, farmers take total control over nutrient flows and everything else in the field, making soil health unnecessary for growing their crops.

• In a regenerative production system, soil microbes generate most nutrients endogenously – nitrates from nitrogen in the air, phosphorus from the minerals, and micro-nutrients are mined and transported by soil fungi. Soil microbes and the surrounding biosphere also foster plant immunity and health. Soil microbes also turn soil into a “sponge” that absorbs water and slows down leakage and erosion, making water plant-available. In regenerative production systems, farmers mainly nudge the ecological system as needed, e.g. by complementing missing micro nutrients and inoculating soil microbes – a science and art.

• The transition from the degenerative to regenerative production system, from “controlling” to “nudging” in a caring manner, takes around 4 to 5 years. The transition mostly requires that farmers invest in learning and capacity building, gain awareness of the ecological processes, and put time into planting some trees and recuperating some core ecosystem functions (habitat for overwintering, nesting, feeding of insects and birds).

Successful regenerative farmers report yields that are equal or even higher than conventionally managed yields, at drastically reduced need for agrochemicals – fertilizer, herbicides, and pesticides. Consequently, profitability skyrockets, and the farm shifts from negative to positive externalities for our society.

What is the barrier to taking up regenerative production methods?

As economic sector, most agricultural research requires cost share funding by the agricultural input industry and by financial investors. Industry and investors alike expects profitable returns to their investment, mainly by selling patent-protected inputs. Regenerative agriculture uses far less inputs, and most of these are not patentable. This results in a large research gap for regenerative practices, and a general bias of research toward high-input agriculture. Likewise, media tends to echo research – and often joins the choir of high-input agriculture.

However, farmers did not state this research gap as a main barrier. Instead, farmers stated one of two main barrier to transitioning land into regenerative production:

1. some plan to retire very soon and the transition is not worth the bother as they are seeking to sell their land, and
2. most others rent land without long-term secure access to land. This insecurity makes it too risky to invest into the transition.

While those who retire welcome high prices for agricultural land, most other farmers are squeezed out of the land market and rely on short-term rental.

What is driving land prices and what are the consequences?

In today’s Ontario, it has become impossible to purchase agricultural land with agricultural earnings. Land prices are driven up by three demands for agricultural land:

1. For re-zoning from agricultural to residential, investors (often international) are purchasing farmland around settlements. Return of this rezoning is $10 to $50 on each dollar invested, or $10 Million per farm. Investors buy dozens of farms and push planning departments to rezone. As one property is rezoned, part of the profits can be reinvested into more farm purchases, while the other properties also increase in value due to land price inflation. To save land taxation, land is rented out to farmers with short-term contracts.
2. Land gaming. Many farmers who already own land are benefiting from land price explosions. With annual land price increases around 10%, farmers can leverage owned land to purchase more land. The returns on each farm property in this “land game” are around $100,000 per year and vastly exceed agricultural incomes (typically $20,000/farm property). A retired farmer friend pointedly stated: “Many farmers want to own 40,000 acres – they seem to drive for scale for the sake of scale”. For those playing the land game, only degenerative cash cropping with huge equipment is feasible.
3. Urban out-migration. Many urbanites resettle to rural areas. With urban house prices skyrocketing, they can easily afford a 100 acre farm property and then rent out land to farmers to access the agricultural land tax break (only 25% of regular land taxes!). Without deeper knowledge in farming, most rely on short-term rental contracts.

The unintended outcome of land speculation is more short-term land rental, an ever-growing scale of agricultural equipment, and a consolidation of degenerative farming practices. Consequences are vast: reduced soil carbon, increased erosion, increased use of agrochemicals, leakage of nutrients into drinking water supplies and water courses, destruction of wind breaks and hedgerows to accommodate for every-increasing equipment size, drainage of wetlands, conversion of pastures into cash crop fields, a dramatic reduction of biodiversity habitat, and reduced climate resilience. We are pushing our biosphere toward collapse.

Who are these land speculators and who benefits?

Land speculators are national and international agencies – pension funds, portfolio funds that invest on behalf of affluent individuals, public land holdings. Investors are located in Toronto, Canada, China, Europe, the US, East India –wherever money is looking for profitable opportunities. Pension funds maximize returns for Canadian retirees. Portfolio funds seek to increase their share in low-risk land, such that they can speculate in high-risk stocks. Savvy business people buy land on behalf of their families and friends. It’s the wild wild Southwest, investors heard that “Ontario is open to growth” – and swarm us like flies.

But not only investors benefit from the surge in land prices. Actually, all landowners do. Last year, our own farmland gained five times more value than we are able to net with our farm business. Retiring farmers gain greatly, and in consequence, some farm organizations with an older farmer membership push for MORE land speculation, MORE rezoning and development, MORE opening of markets to foreign investors. Even some pension funds have massive assets in land, and spread land profits to their urban clients.

Why does that matter?

With many powerful people benefiting from landscape destruction, the first step to change is to recognize the scale of Ontario’s land crisis. Within only a decade, farming in Grey Bruce has been turned over completely. Gone are permanent pastures, gone are small fields. Excavators are ripping out hedgerows non-stop, farm houses are demolished  and leveled for tax savings. Farm machinery has become so big that municipalities struggle with infrastructure maintenance – bridges and roads bend and collapse from the unprecedented weight of equipment. Meanwhile, our rivers have turned into a muddy yellow color that choke fish and amphibians. Insects disappear from landscape-scale use of neonicotinoid pesticides that render plants toxic. Birds lack feeding grounds and nesting areas as trees disappear around fields. Meanwhile, forestry has become increasingly hard – where some old trees were once spared for owls and other birds, an “efficient” carbon landscape maximizes forest growth with little regard to biodiversity. Even on conservation land! In spring, more fields are now fallow until late June. Dark and bare soil causes a rural heat island effect that reduces rainfall in May and June. Later, flash rainfalls cause flooding, erosion, and infrastructure destruction. Our region is losing its resilience so that investors make billions.

With cash crops dominating today, Southwestern Ontario only photosynthesizes 50% of its regional potential. This means that plants only absorb half of the sun’s energy for transpiration (cooling) and carbon sequestration. The rest of this solar energy heats the ground, evaporates moisture, and builds a rural heat dome in agricultural areas (Figure 2). In addition to global warming, our land management is creating our very own rural sauna!

What could be done?

The drivers of this degenerative agricultural development are outside the realm of agriculture. They cannot be addressed by tweaking agricultural production methods, or by disseminating new production knowledge or BMPs. Land speculators are literally destroying the little nature that is left in Southwestern Ontario.

If land speculation and land gaming is the root cause of unsustainable landscapes, then solutions must also start here. Solutions can use different leverage points:

• Clear communication & education around land speculation, as broad initiative of multiple farm organizations. This communication must include a focus on regenerative landscape outcomes, external costs of land degradation, and the collapse of rural communities.
• Immediate outside-of-the-box workarounds, e.g.:
  • Community farms with external investors, e.g. my idea of a “Co-operative farm with burial sites” that is financed by retirees;
  • Ecological Farming easements with land trusts;
  • Regenerative long-term land agreements between private landowners and farmers (today, this is not feasible with international investors or corporate land holdings!).
• Municipalities take an active role in rezoning:
  • Restrictions on property developments that prioritize first-time home buyers and include natural habitat;
  • Slowing down of rezoning and densification in settlements;
  • Municipalities can purchase land for rezoning and funnel financial gains into their budget.
• Collaborative investment schemes into land, such as
  • see my compendium (here)
• Structural policy changes, e.g.:
  • Tony McQuail’s proposal to prohibit rezoning for all landowners. Only land that is owned by a new crown corporation can be rezoned. The crown corporation purchases land at agricultural land prices, and sells it at residential value; profits go into the provincial budget.
  • Agricultural land taxation incentives that reward regenerative outcomes, not a minimum production revenue;
  • A shift of all agricultural subsidies toward regenerative landscape outcomes. This includes crop insurance subsidies, price stabilization subsidies, environmental subsidies, and the support of specific Best Management Practices.

I am convinced that continued promotion of regenerative agricultural practices has very limited potential, unless farm-scale explosion (“the land game”) and speculative land pricing for rezoning prevails. Many civil society initiatives and government agencies are wasting precious energy when targeting farmer behavior. At least in our region and others driven by large-scale land acquisition by investors, should organizations target land speculation instead?