Report mapping existing incentives for sustainable soil health business models

This NOVASOIL project blog post refers to the report (Deliverable 3.1) developed by our partners Dimitre Nikolov, Ivan Boevsky, Martin Banov, Ekatherina Tzvetanova, Krasimir Kostenarov and Tsvetelina Marinova, which introduces the concept of incentive mapping for sustainable soil health business models and lays the groundwork for the detailed analysis that follows (WP3).

The objective of this report was to understand soil health business models and link them to existing models through an inventory and mapping process. The work addresses how these models contribute to sustainable and competitive agriculture, using a structured approach to map incentives for ecosystem services and exploring the integration of these incentives with soil restoration technologies. The report also includes an inventory of incentives from 2014-2022 in all NOVASOIL partner countries, improving the understanding of soil health practices.

Before unpacking the report, it is worth explaining what we mean by “mapping existing incentives“. Mapping existing incentives” in the context of the NOVASOIL document refers to the process of identifying and classifying different types of incentives that have been implemented in the agricultural and forestry sectors. This process aims to support business models that improve soil health, taking into account social, economic and environmental aspects.

Imagine, for example, that there is a government subsidy programme that offers money to farmers who use sustainable farming practices such as crop rotation to maintain soil health (this is the case with the European Union’s Eco-Schemes, isn’t it?). Incentive mapping would therefore identify this subsidy programme, rank it according to its impact on soil health, and analyse it to see how it relates to other objectives, such as the economic sustainability of farms and environmental protection.

How was it done and what were the steps?

The steps taken to achieve the objectives can be summarised as follows: 

• Initial questionnaire: At the outset, project partners in different countries completed a questionnaire to collect baseline data on incentives in their regions.
• Types of incentives: These incentives can be of different types, ranging from government regulations to voluntary measures, and include both public programmes and private initiatives.
• Benefits of incentives: Examines how the combination of these incentives can improve ecosystem services (such as air and water quality) and reduce social costs.
• Detailed analysis: Analyses the nature of the incentives (whether they are policy-driven or voluntary), the financial support they receive, and how they align with key global goals, such as those of the 2030 Agenda for Sustainable Development.
• Impact on land use: We look at how incentives affect the way land is used, noting that some change land use while others have no impact.
• Incentive mapping: Incentives are categorised according to their impact on social, economic and environmental aspects of soil health business models in agriculture and forestry.
• Analysis tools: A simplified version of the Business Model Canvas will be used to analyse the business models, taking into account socio-economic and environmental/technological factors.
• Analysis of ecosystem services: Finally, we examine how incentives improve thirteen key areas of ecosystem services, focusing on their impact on soil health, biodiversity and climate regulation.

How can incentives improve farming? A look at the business model canvas

In the NOVASOIL project, we wanted to understand one thing: how can certain “subsidies” (called incentives) help farmers to take better care of the soil and at the same time run their business? To find out, we use a special tool called the Business Model Canvas (BMC). Think of it as a big poster showing everything important about a farm business: from what it offers to how it makes money.

Now think of incentives as small grants or benefits that can come in many forms, such as extra money from the government to buy things that care for the soil. We wanted to see how these incentives affect different parts of the business. For example, if a farmer gets money to use soil-friendly mulch, how does that change the way he works? Does it make your products more attractive to customers who care about the planet?

Using the BMC, we put these incentives into every part of the business and see what happens. Do they help make better offers to customers? Do they change the way farmers relate to their customers? Do they make the business more profitable in the long term?

The great thing about using the BMC is that it allows us to look at the big picture. Not only are we looking at ways to make farming more environmentally friendly, but we are also ensuring that farmers can continue to run their businesses successfully. It is like putting together a jigsaw puzzle, where every piece is important to create a picture of sustainable and prosperous agriculture.

More than just an interesting set of results

We encourage you to read the report or contact us directly to find out more about its very interesting findings. However, we will give you a brief summary here.

At the heart of the NOVASOIL project is the analysis of how different European countries are using incentives to improve soil health. These incentives are not only vital for sustainable agriculture, but also for the future of our environment. Here, we take a look at the most significant findings:

Diversity in the Number of Incentives

Countries are grouped into three categories based on the number of incentives available. For example, countries such as Bulgaria, Denmark and Spain have fewer than 10 incentives, while Germany leads in the second group with 30 incentives. This variation reflects different national approaches and priorities in promoting sustainable agricultural practices.

Types of Incentives in Germany and the United Kingdom

Germany: Stands out for a balanced mix of mandatory, flexible and voluntary incentives, including green bonds and direct payments for ecosystem services.

United Kingdom: Voluntary actions with direct return on investment predominate, focusing mainly on payments for ecosystem services.

Impact on Soil Health: These incentives are key to promoting agricultural practices that are not only economically viable, but also environmentally friendly. From specific bans to rewards for adopting sustainable practices, each country is taking unique steps to protect and improve the health of their soils.