Enhancing Soil health through Values-based business models

Background and Objective

Business models are ways in which individuals and organisations create and capture value. Land managers (agriculture, forestry) combine man-made resources with natural resources (ecosystems) to produce marketable products like food, feed, fiber and wood, but at the same time produce ecosystem services that are generally not marketed or compensated, such as clean water, clean air, biodiversity, aesthetic landscapes, etc. Healthy soils in particular contribute to many ecosystem services. However, land managers generally have little incentive to invest in healthy soils, as they cannot sufficiently capture the value generated by these ecosystem services. This is why, globally, communities are investigating the feasibility of setting up financial mechanisms to overcome this problem. Most of the scientific literature focuses on payments for ecosystem services (PES) either through government subsidies (e.g., agri-environmental schemes) or private incentives, mainly in the form of price premiums. Other mechanisms such as equity investment or compensation for risk or cost reductions as well as hybrid incentive schemes combining public and private incentives are relatively under-investigated.

SoilValues aims to fill this research gap by exploring how to enhance the conditions for developing successful soil health business models.

Soil health business models are models in which land managers make production decisions that result in higher levels of soil-based ecosystem services (SES) and in which they are paid for the non-marketed SES they generate. In other words, land managers’ supply of soil-based ecosystem services has been met with a demand for these services. Supply and demand form the core of any business model. In order for such business models to function, three important conditions need to be fulfilled: (1) the outcomes of SES need to be measured, thus requiring knowledge, indicators and models, (2) the data and information generated by these indicators and models need to be exchanged to facilitate monitoring, reporting and verification (MRV), and (3) all these activities should be governed by an appropriate institutional framework consisting of the necessary legislation, standards and incentive schemes. In addition, digital technologies may greatly enhance all these components. For soil health business models to be successful, all these components need to be present, so the assessment and improvement of soil health business models requires an integrated, systems-based approach, taking into account multiple levels (farm, value chain, territory).

Approach

To achieve these specific objectives, SoilValues will carry out activities organised in five interdependent work packages plus a project management WP (WP6) in three phases: an exploration phase, a test phase and a scaling up phase.

WP1 will create an assessment framework (SO1) incorporating all relevant components at multiple levels, based on various inputs: existing cases worldwide, insights from a community of practitioners (WP3) and insights from action research carried out in six EU-wide testing grounds (WP2) in Belgium, Denmark, Germany, the Netherlands, Poland and Portugal. These testing grounds will be used to analyse new and emergent initiatives and their supportive environment (institutions, knowledge and data exchange), but also to improve them and create new, innovative models (SO2). Insights from WP1 and WP2 will be upscaled through the community of practitioners (WP3) who act as ambassadors for soil health business models (SO3). WP4 will design an interactive toolbox of incentives and policy recommendations based on a thorough analysis of incentive mechanisms globally as well as on the incentives investigated in the testing grounds (SO4). WP5 will increase awareness of the importance of soil health and the opportunities among a wide set of stakeholders and will showcase good practices and communicate project results using a variety of communication approaches geared towards different communities, including the general public (SO5).

Data and Methods

The SoilValues project aims to contribute to sustainable management of soils throughout the EU in order to improve the quality of the soils in support of the EU Green Deal ambitions. Particular focus is on financial impulses and incentives for land managers for improved soil management, thereby linking (1) farm management (e.g., soil and crop management and carbon storage) and landscape management, and circularity of resources, (2) long term ecosystem services and other externalities and (3) involvement of other stakeholders (ranging from governments to NGOs.

In order to be able to reach its objectives, SoilValues will use a multi-actor approach, in which practice actors will be engaged either in (national) testing grounds and in a more transversal way through the communities of practice. The SoilValues consortium include a wide set of practitioners, including farmer organisations, NGOs, policy makers, value chain actors, advisors, financial institutions and research organisations.

Our Research Questions

To enhance the conditions for developing successful soil health business models, SoilValues has the following specific objectives (SO):

• To provide a comprehensive assessment framework addressing all factors influencing the development of business models for investing in soil health (SO1)
• To establish 6 testing grounds across Europe to test and improve emerging and designing new soil health business models (SO2)
• To establish 12 communities of practice of land managers, value chain actors, investors and public authorities for soil health business models (SO3)
• To design a comprehensive toolbox of incentives and policy recommendations to facilitate soil health business models (SO4)
• To raise awareness and exchange knowledge for soil health business models (SO5)