The document entitled “NOVASOIL: INNOVATIVE BUSINESS MODELS FOR SOIL HEALTH” is the new output of the NOVASOIL project, led by WU with contributions from UCPH and ZALF. The main authors are Insa Thiermann and Liesbeth Dries. This project, funded by the European Union’s HORIZON-AG programme, explores business models and social innovations to promote soil health.

You already know that NOVASOIL is a pioneering initiative funded by the European Union to develop innovative business models to promote soil health. The project explores regenerative farming practices that not only benefit the environment, but are also economically viable for farmers.

Soil health and its importance

Soil is the basis of our food production and a key ally in the fight against climate change. NOVASOIL highlights the urgency of adopting agricultural practices that regenerate and maintain the vitality of our soil, from managing payments for ecosystem services to participating in carbon credit markets.

Business models for a sustainable future

NOVASOIL evaluates different business models, highlighting those based on public payments for ecosystem services and private initiatives that seek to compensate farmers for their sustainability efforts. These strategies aim not only to improve soil health, but also to ensure that farming practices are economically viable for farmers.

Call to action

This project is an invitation to all farmers and agricultural stakeholders to explore and adopt the strategies proposed by NOVASOIL. In doing so, we will be investing not only in the health of our soil, but also in the resilience and sustainability of our food system.

Key findings

  • Environmental effectiveness: The potential of outcome-based rather than action-based payments to improve the environmental effectiveness of policies is highlighted. Carbon markets offer purely outcome-based payments, while CAP payments are often action-based. It is mentioned that hybrid approaches could be viewed critically when focusing on soil health measures aimed at carbon storage.
  • Fairness to stakeholders: Fairness needs to be considered in all business models. In particular, it is suggested that ESA schemes that aim to be outcome-based should include farmers with high soil carbon levels. It is also mentioned that payment schemes across the value chain should take into account asymmetries in market power to ensure that farmers are adequately compensated.
  • Regulatory compliance: The compatibility of soil health measures with regulatory frameworks is questioned when carbon credits are sold on carbon markets. Preference is given to carbon storage in rewetted peat soils, afforestation and agroforestry, while soil health measures are viewed critically due to issues of reversibility and permanence.
  • Acceptance: Consumer preference for claims such as ‘climate neutrality’ is noted, and farmers’ willingness to accept share-based payments rather than performance-based payments is discussed. It is mentioned that payment schemes involving share-based payments may be preferred by farmers.

The findings underline the complexity of promoting soil health and climate change mitigation through agribusiness models. They highlight the importance of environmental effectiveness, fairness, legal compliance and farmer and consumer acceptance as critical factors for the success of these initiatives.

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