Innovative Business Models for Soil Health: A NOVASOIL Project Overview

The NOVASOIL project, funded by the European Union’s Horizon 2020 research and innovation programme, aims to develop and promote innovative business models that improve soil health. This initiative is crucial for ensuring food security, mitigating climate change and maintaining the overall health of our ecosystems. The project focuses on three primary business models: public payments for ecosystem services, carbon credit markets and value chain payments for ecosystem services. Each of these models provides a framework for rewarding farmers who adopt sustainable soil health practices.

The information presented in this article is based on Deliverable D2.2 of the NOVASOIL project entitled “Business Models and Social Innovations“. This document is part of the WP2 work package focusing on the analysis and development of business models to promote soil health. Three main business models are considered: public payments for ecosystem services, carbon credit markets and value chain payments for ecosystem services.

The importance of understanding business models for farmers

Understanding innovative business models is crucial for farmers for a number of reasons, all of which focus on improving both the profitability of their businesses and the sustainability of their practices.

Economic improvements
Business models that promote soil health offer financial incentives such as direct payments and price premiums. This helps to increase farmers’ income and financial stability.

Long-term sustainability
Adopting sustainable practices improves soil fertility, reduces erosion and increases water retention. This leads to healthier crops and higher yields in the future.

Access to new markets
Consumers prefer sustainable products and are willing to pay more for them. Farmers can benefit from increased demand and better prices.

Compliance and regulatory support
Knowledge of these models makes it easier to comply with new regulations and can provide access to additional funding and technical resources.

Environmental and social benefits
Sustainable practices improve biodiversity, reduce emissions and protect water resources. They also improve the farmer’s reputation and strengthen relationships with the community.

Public payments for ecosystem services

Public payments are financial incentives given to farmers to adopt sustainable farming practices. These payments are financed by the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) under the Common Agricultural Policy (CAP). Environmental schemes are a key component where farmers receive payments for implementing practices that go beyond the legal requirements and thus contribute to environmental sustainability.

Carbon credit markets

Carbon credit-free markets are a private initiative where farmers receive remuneration for their carbon farming practices. These practices include activities that capture and store carbon in biomass or soil. Carbon credits are certified units that represent one ton of carbon removed from the atmosphere. European regulation is developing a framework to guarantee the quality and sustainability of these credits.

Value chain payments for ecosystem services

This model involves contracts between farmers and other actors in the agricultural value chain, such as food processors and retailers. These contracts provide incentives for farmers to adopt sustainable practices, such as price premiums for products that meet certain environmental standards. A concrete example is Barilla’s sustainable agriculture project in Italy, where farmers receive price premiums for adopting practices that improve soil health.

Key factors for farmer acceptance

Farmers’ acceptance of these business models depends on several factors, including financial incentives, length of contracts and additional benefits such as improved soil fertility and biodiversity. It is essential that contracts are clear and provide financial stability to motivate farmers to adopt sustainable practices.

Conclusion

The NOVASOIL project is leading the way in developing innovative business models that promote soil health through public and private initiatives. These efforts are essential to ensure food security, mitigate climate change and improve the resilience of agricultural ecosystems.