WEBVTT 1 00:00:01.492 --> 00:00:06.763 I think that it's time for the farmer to be properly valued for what they do, 2 00:00:08.345 --> 00:00:10.950 not only in the farming ecosystem, 3 00:00:11.013 --> 00:00:13.692 but at the community level, 4 00:00:14.036 --> 00:00:14.919 at the country level, 5 00:00:15.880 --> 00:00:16.458 in terms of 6 00:00:17.360 --> 00:00:18.442 what we say in economy, 7 00:00:18.641 --> 00:00:22.547 positive externalities in terms of health of people, 8 00:00:23.047 --> 00:00:24.106 health of the environment, 9 00:00:24.227 --> 00:00:25.547 biodiversity and everything. 10 00:00:25.586 --> 00:00:28.453 So I think this is really something that is undervalued today. 11 00:00:29.110 --> 00:00:30.032 Why do you think that is? 12 00:00:30.313 --> 00:00:33.758 Why are we not valuing farmers as much as they deserve to be? 13 00:00:34.524 --> 00:00:34.821 For me, 14 00:00:34.883 --> 00:00:43.680 the biggest reason to that is that we have considered the farmer in this industrialization as an industry. 15 00:00:44.936 --> 00:00:51.564 And the farmers and the farming in general is not an industry. 16 00:00:51.705 --> 00:00:58.111 We are more than any other sectors working with nature, 17 00:00:59.369 --> 00:00:59.713 working, 18 00:01:00.392 --> 00:01:01.127 feeding people. 19 00:01:01.798 --> 00:01:07.064 And so it's a very complex sector that is not really comparable to an industry, 20 00:01:07.720 --> 00:01:11.642 an industry that is transforming a product A into a product 21 00:01:12.017 --> 00:01:12.142 B. 22 00:01:13.136 --> 00:01:14.437 Farming is about cycle, 23 00:01:14.718 --> 00:01:15.419 recycling, 24 00:01:16.099 --> 00:01:23.050 and about bringing a lot of other value than just producing a product in the community. 25 00:01:23.604 --> 00:01:23.745 Yeah. 26 00:01:24.784 --> 00:01:26.690 I think I understand what you're saying here. 27 00:01:26.808 --> 00:01:36.112 We've been considering and treating farming as a purely extractive activity in the same way we consider mining coal, 28 00:01:36.144 --> 00:01:36.597 for example, 29 00:01:36.612 --> 00:01:37.378 from a coal mine. 30 00:01:37.565 --> 00:01:37.675 Yeah. 31 00:01:37.956 --> 00:01:38.269 where... 32 00:01:39.044 --> 00:01:44.488 the farmer's only purpose is to mine the soil and to produce food from it. 33 00:01:45.289 --> 00:01:45.852 But actually, 34 00:01:46.152 --> 00:01:47.449 farming is a lot more than that. 35 00:01:47.551 --> 00:01:52.418 Farmers are the interface between society and the living world. 36 00:01:52.637 --> 00:01:55.348 And the work they do also impacts the climate, 37 00:01:55.426 --> 00:01:57.238 it impacts biodiversity, 38 00:01:57.254 --> 00:01:58.723 it impacts water cycles, 39 00:01:59.738 --> 00:02:04.582 the landscapes that we love to see when we go on a walk in the countryside in the weekend. 40 00:02:05.129 --> 00:02:07.848 And so farmers are not just a productive tool that's... 41 00:02:08.340 --> 00:02:25.845 is there to be squeezed as hard as possible so that it can produce as much food as possible for as cheap as possible it's a lot more than that and when not at present time considering enough all of these other benefits of farming activities on 42 00:02:25.876 --> 00:02:33.423 society on the planet on the ecosystems yes yes i think so and uh and i don't want to be um 43 00:02:34.636 --> 00:02:37.521 fighting for the image of the farmer. 44 00:02:38.183 --> 00:02:42.466 I want to fight for the profitability of the farmers. 45 00:02:50.804 --> 00:02:54.627 There's the total value created by the entire supply chain. 46 00:02:55.649 --> 00:02:58.051 And maybe the value, 47 00:02:58.231 --> 00:03:02.496 the part of that value that goes to the farmer is not high enough. 48 00:03:03.840 --> 00:03:06.621 When you analyze that in different value chain, 49 00:03:06.622 --> 00:03:10.418 you will very quickly discover that the costs... 50 00:03:11.004 --> 00:03:15.793 of the farming activity in the final product of many different products. 51 00:03:15.794 --> 00:03:21.781 I'm always using the case of the barley in the beer because we like that in Belgium. 52 00:03:22.742 --> 00:03:25.711 But the barley costs in a beer, 53 00:03:25.992 --> 00:03:26.711 it's ridiculous. 54 00:03:29.236 --> 00:03:29.516 This can... 55 00:03:30.137 --> 00:03:30.718 Ridiculous how? 56 00:03:31.358 --> 00:03:32.720 If you take one liter of beer, 57 00:03:34.120 --> 00:03:40.725 the contribution of the barley cost into this liter of beer will be around 58 00:03:41.811 --> 00:03:45.397 2 to 4 euro cents per liter of beer. 59 00:03:46.772 --> 00:03:48.350 Think about the value of a liter of beer. 60 00:03:49.538 --> 00:03:52.897 I let you make the calculation and realize how small this is. 61 00:03:53.679 --> 00:03:54.585 I used to say that it's, 62 00:03:55.054 --> 00:03:55.460 of course... 63 00:03:55.507 --> 00:03:55.663 um 64 00:03:56.536 --> 00:04:11.992 a disappointing news for the farmer to realize that actually his contribution into the value chain is nothing but this is also an element of optimism because it means that rewarding the farmer properly or 65 00:04:12.617 --> 00:04:23.570 significantly higher depending of what the good is doing to the planet to the soil to the community is actually not 66 00:04:24.244 --> 00:04:26.606 as difficult as we intend to think. 67 00:04:28.007 --> 00:04:28.530 I see. 68 00:04:28.550 --> 00:04:29.511 If you look at it this way, 69 00:04:29.512 --> 00:04:33.390 if the farmer is getting such a small share of the final value of the product, 70 00:04:34.491 --> 00:04:36.515 paying the farmers a lot better, 71 00:04:37.257 --> 00:04:40.343 even let's imagine twice as much in the case of barley here, 72 00:04:40.702 --> 00:04:41.327 would mean that... 73 00:04:43.041 --> 00:04:58.312 the total cost of producing that litter of beer is only two more cents right right it goes from two cents to four cents if i'm doing the math right yes yeah and so there's a real opportunity there to actually reward farmers who farm 74 00:04:58.313 --> 00:05:10.125 in a way that is taking care of nature ecosystem the soils biodiversity and all of these things that we really need uh for exactly and and and you know um 75 00:05:11.373 --> 00:05:12.174 I'm not saying that, 76 00:05:12.333 --> 00:05:12.654 again, 77 00:05:12.955 --> 00:05:16.357 to negotiate with the rest of the value chain and to say, 78 00:05:16.358 --> 00:05:16.478 OK, 79 00:05:17.279 --> 00:05:18.181 we want more money. 80 00:05:19.041 --> 00:05:24.466 I am really convinced that things have to change in farming. 81 00:05:24.849 --> 00:05:26.724 So there is a lot to do. 82 00:05:26.826 --> 00:05:29.505 And we're going to talk about that when we talk about region ag. 83 00:05:30.333 --> 00:05:34.068 So it's not that the farmers would be rewarded for just. 84 00:05:34.313 --> 00:05:38.497 the fact that he has been doing hard work for the last 30 years and so on. 85 00:05:38.618 --> 00:05:38.735 No, 86 00:05:39.157 --> 00:05:40.079 it's about the future. 87 00:05:40.157 --> 00:05:44.767 And I think that if you there is a possibility in the market, 88 00:05:45.665 --> 00:05:46.188 to my view, 89 00:05:46.868 --> 00:06:00.657 to reward properly the farmer for the change he will bring to incentivize also properly the farmers for farmers who are not convinced that they should change without automatically 90 00:06:01.213 --> 00:06:09.662 ask to the consumer to pay a huge contribution or to increase drastically his spendings. 91 00:06:11.545 --> 00:06:12.045 Of course, 92 00:06:12.701 --> 00:06:21.256 beer is an extreme case where these costs of the farming part is very small. 93 00:06:21.818 --> 00:06:24.678 But if you look at the bread, 94 00:06:24.709 --> 00:06:25.318 for example, 95 00:06:25.943 --> 00:06:27.162 if you look at the other crop, 96 00:06:27.334 --> 00:06:27.647 you will 97 00:06:28.409 --> 00:06:37.702 Most of the time realize that the farmer's contribution into the final product in terms of cost is small. 98 00:06:38.116 --> 00:06:46.608 And that's actually if the farmer increases costs or the value of his product to the first buyer in this value chain, 99 00:06:47.327 --> 00:06:48.874 the reflex of the buyer, 100 00:06:49.671 --> 00:06:51.655 the first one and the next one, 101 00:06:52.218 --> 00:06:56.421 would be to take a margin on the premium that the farmer would receive. 102 00:06:57.309 --> 00:07:16.240 the change he's bringing and the next one will take a margin on the margin and so if we are not really careful about keeping this premium in the pocket of the farmer and avoiding to inflate this premium an 103 00:07:16.256 --> 00:07:16.724 increase 104 00:07:17.321 --> 00:07:25.249 of price for the farmer will always end in a quite important increase of price for the consumer. 105 00:07:25.428 --> 00:07:27.311 I don't know if you understand. 106 00:07:27.631 --> 00:07:27.788 Yeah, 107 00:07:28.350 --> 00:07:28.749 I think so. 108 00:07:29.092 --> 00:07:30.053 I think I understand. 109 00:07:30.655 --> 00:07:33.881 Can I maybe try and re-explain this with my own words just to see if 110 00:07:34.319 --> 00:07:35.303 I understood this correctly? 111 00:07:36.319 --> 00:07:42.038 So when a farmer is producing food in a way that is regenerative or organic or both, 112 00:07:42.991 --> 00:07:43.866 that farmer is 113 00:07:44.265 --> 00:07:46.726 making an extra effort and is taking extra risk. 114 00:07:47.289 --> 00:07:47.969 And therefore, 115 00:07:48.789 --> 00:07:52.594 it makes sense for that farmer to sell their produce with an added premium. 116 00:07:53.453 --> 00:07:55.234 So let's take an example. 117 00:07:55.314 --> 00:07:57.277 I'm going to use completely made up numbers, 118 00:07:57.278 --> 00:07:58.117 but just to make the point, 119 00:07:58.176 --> 00:07:58.359 right? 120 00:07:59.160 --> 00:08:05.262 So let's imagine a farmer who's selling a product for one euro and decided to add a 20% 121 00:08:05.723 --> 00:08:10.012 premium because he or she is farming in a regenerative manner. 122 00:08:10.715 --> 00:08:13.887 So that farmer is now selling the product with a 20% 123 00:08:14.215 --> 00:08:16.168 premium at one euro and 20 cents. 124 00:08:16.699 --> 00:08:22.668 So you would think that the final consumer buying that same product at the supermarket at the end of the chain... 125 00:08:23.149 --> 00:08:23.529 would pay 126 00:08:24.010 --> 00:08:24.911 20 cents more. 127 00:08:25.372 --> 00:08:26.832 So that premium from the farmer. 128 00:08:26.932 --> 00:08:32.821 But what actually happens is that every step of the value chain inflates that premium. 129 00:08:33.258 --> 00:08:38.125 And so the final price for the consumer is really high. 130 00:08:38.305 --> 00:08:39.506 a lot higher than the 131 00:08:40.367 --> 00:08:43.691 20 cents added value for the farmer. 132 00:08:44.390 --> 00:08:51.074 And that makes the product much less attractive and that creates a lot less traction in regenerative products and farming. 133 00:08:51.199 --> 00:08:52.722 And same thing goes for organic. 134 00:08:52.800 --> 00:08:54.425 Is that sort of right? 135 00:08:55.035 --> 00:08:55.160 Yeah, 136 00:08:56.347 --> 00:08:58.238 it's exactly what I was trying to explain. 137 00:08:58.488 --> 00:09:03.269 So the conclusion of this simplistic calculation, 138 00:09:03.332 --> 00:09:04.332 which is a reality, 139 00:09:04.894 --> 00:09:06.035 is that the consumer say, 140 00:09:07.175 --> 00:09:07.316 Okay. 141 00:09:07.317 --> 00:09:07.379 Oh. 142 00:09:07.397 --> 00:09:23.747 people we say very nice what the farmers are doing very nice this concept of regenerative agriculture or organic agriculture but too expensive only the rich or the richest part of the the community is able to afford it which 143 00:09:23.779 --> 00:09:35.951 is actually not true if we look at who has made the the change and the effort and has taken the risk the rest of the value chain will definitely 144 00:09:37.591 --> 00:09:42.038 have a little bit more cost to isolate the batches of grain to 145 00:09:43.061 --> 00:10:05.765 communicate to certify whatever but nothing compared to what the farmer has put in terms of risk effort investment yeah so the big share of this premium if we call that a premium should go back to the pocket of the farmer obviously without impacting too much the consumer yeah yeah makes a lot of sense doing 146 00:10:05.781 --> 00:10:09.609 this podcast and releasing new episodes every single week it's 147 00:10:09.777 --> 00:10:14.440 a lot of work and it's actually a full-time job for me right now and 148 00:10:14.983 --> 00:10:17.983 I couldn't do it without the support of Soil Capital. 149 00:10:18.085 --> 00:10:30.210 So I just want to thank them for supporting me and my vision and my work doing this podcast for the last two years already and for giving me the total freedom to choose my guests, 150 00:10:30.272 --> 00:10:31.179 to choose the topics, 151 00:10:31.180 --> 00:10:32.272 to choose the questions. 152 00:10:32.944 --> 00:10:33.616 So yeah, 153 00:10:33.819 --> 00:10:36.507 just a little moment of gratitude towards them. 154 00:10:36.857 --> 00:10:39.277 And towards all of you who are listening to the deep sea, 155 00:10:39.338 --> 00:10:40.318 thank you so much as well. 156 00:10:40.377 --> 00:10:45.795 Let's get back to this conversation before I start to annoy you and you decide to skip to something else. 157 00:10:45.881 --> 00:10:46.139 Let's go. 158 00:10:47.178 --> 00:10:51.482 So Cultiva is a cooperative we created seven years ago, 159 00:10:51.662 --> 00:10:51.998 I think, 160 00:10:52.623 --> 00:11:03.326 when we actually realized that having implemented region act practices in a certain number of farms in the region here, 161 00:11:04.186 --> 00:11:05.061 in the center of Belgium. 162 00:11:05.893 --> 00:11:11.159 Having achieved savings using more efficiently our pesticides, 163 00:11:11.597 --> 00:11:14.300 reducing the tillage and reducing the fuel consumptions, 164 00:11:14.979 --> 00:11:17.581 having basically achieved 165 00:11:18.065 --> 00:11:23.878 70% of the potential of the savings and the cost benefit of those transition, 166 00:11:24.706 --> 00:11:29.784 and having also spent a lot of time investing in new practices, 167 00:11:30.159 --> 00:11:32.393 taking risks to develop that, 168 00:11:32.612 --> 00:11:34.018 to adapt that to the region. 169 00:11:34.749 --> 00:11:44.141 we were still selling our crop and our clients were still selling their crop in the same channels as a conventional farmer. 170 00:11:44.875 --> 00:11:48.000 And so we as agronomists, 171 00:11:48.321 --> 00:11:49.024 consultants, 172 00:11:49.025 --> 00:11:49.500 farmers, 173 00:11:50.266 --> 00:11:59.196 we should develop a different link between the farmers and the consumer and between the regenerative farmers and the consumer. 174 00:11:59.961 --> 00:12:01.055 We should try to create... 175 00:12:01.733 --> 00:12:03.036 some value also. 176 00:12:03.638 --> 00:12:08.773 And so we very simply decided to talk with a few 177 00:12:10.541 --> 00:12:19.853 small craft breweries around us because there was a development of these new industries in the region here. 178 00:12:19.908 --> 00:12:27.595 So I asked guys if you would be interested or not to have local barley produced with Regenac principles. 179 00:12:27.642 --> 00:12:29.267 And very quickly, 180 00:12:29.283 --> 00:12:31.126 we had one or two guys interested. 181 00:12:32.601 --> 00:12:33.062 to do that. 182 00:12:33.302 --> 00:12:36.184 There was a brewery close by here called Valduc. 183 00:12:36.926 --> 00:12:39.266 Another one also was very interested. 184 00:12:39.309 --> 00:12:45.594 And so we started selling them a few tons of barley to produce beer. 185 00:12:46.172 --> 00:12:47.360 We had a collaboration with 186 00:12:47.875 --> 00:12:48.844 Moultrie to do that. 187 00:12:50.531 --> 00:12:57.641 And actually very quickly we understood that this was a good way to go. 188 00:12:58.533 --> 00:13:00.915 because there was a certain traction from other breweries. 189 00:13:01.556 --> 00:13:13.509 The mortar was between the farmer and the brewer and that we were working with Bortmelt was also interested to continue to develop this idea. 190 00:13:13.510 --> 00:13:16.173 And we had actually one... 191 00:13:17.617 --> 00:13:20.300 employee of this big malt tree, 192 00:13:20.360 --> 00:13:20.880 Bortmald, 193 00:13:21.962 --> 00:13:24.665 was really interested to understand about regenerative agriculture. 194 00:13:24.666 --> 00:13:27.946 There was a personal interest into that and 195 00:13:28.384 --> 00:13:37.321 Alexander decided to try to advocate and to speak to his clients who were buying malts, 196 00:13:37.477 --> 00:13:38.102 so the brewers, 197 00:13:38.681 --> 00:13:39.337 about Regenac. 198 00:13:40.257 --> 00:13:43.460 He did a good job and very quickly we went from 199 00:13:44.020 --> 00:13:46.985 30 tons the first year to 100, 200 00:13:46.986 --> 00:13:47.645 200, 201 00:13:47.965 --> 00:13:49.149 500. 202 00:13:49.150 --> 00:13:52.907 And now we're going to produce a few thousand tons of regenerative barley. 203 00:13:53.547 --> 00:13:56.016 And this was actually the beginning of the cooperative. 204 00:13:57.079 --> 00:13:57.594 In parallel, 205 00:13:57.797 --> 00:14:04.797 we also realized that producing and storing barley or cereals 206 00:14:05.277 --> 00:14:10.662 to sell to the industry is also something that you have to do professionally. 207 00:14:11.244 --> 00:14:11.904 You can do that. 208 00:14:11.982 --> 00:14:15.408 You can do one trailer and store it in your warehouse. 209 00:14:15.970 --> 00:14:16.650 That's no problem. 210 00:14:16.752 --> 00:14:18.806 But if you have to store more, 211 00:14:19.314 --> 00:14:20.791 you have to build infrastructure. 212 00:14:21.033 --> 00:14:25.634 That was one important conclusion from the beginning. 213 00:14:25.916 --> 00:14:27.494 So having the facility to do that. 214 00:14:28.478 --> 00:14:33.884 Second important observation is that you can't do that alone. 215 00:14:34.690 --> 00:14:40.021 one farmer as we were doing at the beginning we were just working together with one friend, 216 00:14:40.119 --> 00:14:40.841 Nicolas again, 217 00:14:41.783 --> 00:14:42.662 producing his barley 218 00:14:43.317 --> 00:14:44.098 for one brewery, 219 00:14:45.140 --> 00:14:46.101 you can do that one year, 220 00:14:46.239 --> 00:14:46.659 two years, 221 00:14:47.062 --> 00:14:49.784 but the day we don't have the quality to deliver, 222 00:14:50.585 --> 00:14:51.323 you have a problem. 223 00:14:51.925 --> 00:15:07.456 And so the idea of collaborating with a number of farmers to de-risk this project and also to ensure to our growing brewers that we're going to have the quality year after year and 224 00:15:07.487 --> 00:15:09.237 that the day they're going to print. 225 00:15:10.137 --> 00:15:15.161 on their stickers that it's local regenerative barley used for the beer, 226 00:15:15.985 --> 00:15:18.868 we will be able to continue the production every year. 227 00:15:19.485 --> 00:15:23.188 So that was an important factor to scale, 228 00:15:23.290 --> 00:15:24.547 is to put farmers together, 229 00:15:25.633 --> 00:15:29.610 not only to share that with many farmers and to have a bigger impact, 230 00:15:30.344 --> 00:15:33.485 just for the security of supply and quality. 231 00:15:33.907 --> 00:15:38.626 So that was the two elements we faced when we started. 232 00:15:39.601 --> 00:16:01.224 uh the cooperative yeah and so how has it gone so far you how many farmers do you have now in the cooperative today um so as i was as i said we increased the volumes to a few thousand tons are we going to reach 10 000 tons uh soon of production uh and uh we've been very surprised because our we've 233 00:16:01.286 --> 00:16:08.021 developed uh storage and and sorting cleaning activities as well but those uh 234 00:16:08.689 --> 00:16:24.679 infrastructures are not big enough so we are partnering with other merchants or cooperative to use and death farmer also to produce for the different industries we are working with so 235 00:16:24.804 --> 00:16:34.616 the barley was the start but we also for the last year developed partnership with other industries agro industries so we now work 236 00:16:35.481 --> 00:16:41.989 with people who are using wheat for the flour and the bread. 237 00:16:42.407 --> 00:16:46.712 We're working with people using oats to do milk. 238 00:16:48.313 --> 00:16:51.845 We are also working with people who are using spelt, 239 00:16:53.001 --> 00:16:53.391 rye, 240 00:16:54.141 --> 00:16:54.626 and different... 241 00:16:55.485 --> 00:16:59.923 So there's some connections being made with other actors trying to do something similar to you, 242 00:17:00.048 --> 00:17:02.001 but in different fields with different crops. 243 00:17:02.126 --> 00:17:04.470 And there's sort of synergies between you. 244 00:17:04.825 --> 00:17:04.985 Yeah, 245 00:17:05.045 --> 00:17:14.724 and I think the first idea is and was to enable a regenerative farmer to value not only one crop, 246 00:17:14.771 --> 00:17:17.544 but several crops into a dedicated value chain. 247 00:17:18.005 --> 00:17:19.646 So that was the first idea. 248 00:17:20.427 --> 00:17:25.732 The second idea was also to bring to the same table a certain number of agro-industries. 249 00:17:26.372 --> 00:17:33.357 and hopefully this is not completely materialized today but to create some synergies and some 250 00:17:33.893 --> 00:17:37.876 common way of measuring regenerative agriculture, 251 00:17:38.536 --> 00:17:40.298 defining a premium for the farmers, 252 00:17:40.861 --> 00:17:44.767 and to have that together with these industries and not having 253 00:17:45.540 --> 00:17:46.986 Danone that we work for, 254 00:17:47.025 --> 00:17:47.587 for example, 255 00:17:47.665 --> 00:17:49.790 would define a certain framework and having a 256 00:17:50.525 --> 00:17:52.087 Puratos, we work with them as well, 257 00:17:52.572 --> 00:17:58.493 would define also another way of measuring and a different way of to be in relationship with the farmer. 258 00:17:58.494 --> 00:18:02.353 So the cooperative wanted to try to make the link between 259 00:18:03.169 --> 00:18:08.016 those different agro-industry and the different farmers and the different production. 260 00:18:08.074 --> 00:18:16.422 That was also an idea to try to contribute to certain harmonization of the way we produce, 261 00:18:16.445 --> 00:18:18.305 the way we build those value chain. 262 00:18:19.000 --> 00:18:23.031 And we're working today with a little bit more than 100 farmers. 263 00:18:24.344 --> 00:18:25.688 So more Yes. 264 00:18:26.885 --> 00:18:30.673 The footprint of the cooperative would be around 10,000 hectares today, 265 00:18:30.692 --> 00:18:31.792 10,000, 266 00:18:32.034 --> 00:18:32.995 15,000 hectares.