By Kudzayi Mazikana, Head: Sustainability Strategy, Nedbank Business and Commercial Banking
At a Nedbank-hosted media event at NAMPO Cape, I joined stakeholders from across the agricultural value chain to explore what it will take to help farmers move from conventional to regenerative agriculture. One message came through clearly: If we want regenerative agriculture to move from pockets of adoption to adoption at scale, we need to change the conversation.
The transition from conventional to regenerative agriculture is, at its core, a business decision. It requires different equipment and inputs, new skills, and changes to established farming practices. In some cases, yields may come under pressure before the benefits of healthier soils, lower input costs, and greater resilience begin to show.
For a farmer operating under constant pressure from weather, input prices, interest rates, and market conditions, that initial uncertainty matters. And, if the agricultural sector is serious about regenerative agriculture, we need to ask a different question: How do we collectively support farmers through the transition?
The incentives are real
A strong business case is emerging for regenerative agriculture, but the incentives need to be understood in the context of each farming operation.
The first is market access. Consumers are becoming increasingly concerned about how their food is produced, while retailers and other market participants are looking more closely at the environmental impact of their supply chains. Farmers who can demonstrate responsible production practices will likely strengthen their access to markets.
The second is lower input costs. Reducing dependence on fertiliser, pesticides, fuel, and other external inputs improves the economics of farming over time. That does not mean an immediate and dramatic reduction in costs, but it does create the potential for more efficient and resilient production systems.
The third is carbon income. Where regenerative practices result in measurable carbon removal or emissions reductions, farmers may be able to access an additional revenue stream through carbon markets. Certification can be complex, measurement is essential, and farmers may have to commit to programmes over many years before receiving their first payment, but this is an important opportunity that must not be overlooked.
And finally, there is resilience. Agriculture is inherently exposed to climate variability, and the risks are becoming harder to ignore. Farming systems that improve soil health, water retention, and resilience to climatic shocks have demonstrably strengthened underlying business resilience.
These are meaningful incentives. The challenge is that they do not necessarily arrive when the farmer incurs the cost of changing practices.
The transition cannot sit with the farmer alone
This is where the concept of the transition ‘J-curve’ becomes important. The costs and risks tend to be concentrated at the beginning, while the benefits emerge over time. A farmer may invest in new practices today, potentially experience lower yields during the transition, and only later see the benefits through lower input costs, improved resilience, market opportunities, and carbon income.
If the farmer carries all that initial risk, adoption will inevitably be slower. This is where the wider agricultural ecosystem plays a crucial role.
The transition to regenerative agriculture is not a single transaction or a tick-box exercise. It is a journey that requires an understanding of the investment needed, each farm’s specific circumstances, and the potential short-term impact on cash flow and yields. At Nedbank, our financial solutions take these considerations into account, supporting farmers as they navigate the transition and build more resilient businesses over time.
Retailers and other market participants can support growers through advisory programmes, technical support, and clearer pathways to market. They can also reduce transition risk by committing to buy agreed volumes through offtake agreements, giving farmers greater confidence in future demand as they adopt regenerative practices.
Technology providers and input suppliers have an equally important role to play. They can help farmers interpret information in the context of their particular soil, rainfall patterns, and farming systems, while supporting them in identifying and adopting the inputs and practices that best suit their transition.
Government and industry bodies also need to work together to make the support available to farmers more coordinated and easier to navigate.
Measurement is the common language
One of the strongest messages from the discussion was that measurement must sit at the heart of this ecosystem. Measurement is critical for accessing carbon markets because carbon claims require credible evidence. But its importance goes much further.
Good data enables farmers to understand whether a change in practice is delivering the expected result. It can help financiers better understand the trajectory of a farming business. It can give retailers confidence in the progress being made within their supply chains. And it can help farmers make better decisions about where to invest.
In this sense, measurement is not simply about proving that a farmer is sustainable. It is about making the farm more investable, more understandable, and ultimately more resilient.
Regenerative agriculture is a collective investment
Regenerative agriculture has the potential to strengthen both the environmental sustainability and long-term resilience of farming businesses. But achieving this at scale requires us to stop thinking of the transition as the farmer’s responsibility alone. The future of regenerative agriculture depends not only on how farmers change the way they farm, but on how the rest of the value chain changes the way it supports them.
Source: Percheron Strategic Communications
