September 19, 2017

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Economics of Soil Health: Key to Adoption

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Introduction
The current world population of approximately 7.4 billion is projected to increase to approximately 9.7 billion by 2050.  Growing enough food, while also sustaining and improving our natural resources, is one of the greatest challenges of our time.

Recently, the concept of “soil health” has captured wide-ranging interest as a focal point for simultaneously achieving food production and environmental goals.  Peer-reviewed, scientific research has in fact shown that many of the same farming/ranching practices to improve soil health can also reduce nutrient losses to ground- and surface water, reduce greenhouse gas emissions, reduce erosion, increase yield, suppress plant diseases, and provide pollinator and other wildlife habitat.  However, we must recognize that farmers and ranchers are not only land stewards, but are also business men and women.  Therefore, the economics of soil health-promoting practices play a critical role in their adoption.

There are several aspects of economics that can influence land management decisions.

Profitability
The most obvious economic aspect is the relationship between monetary costs and returns.  Some soil health-promoting practices may require additional costs when producers shift their focus to improve soil health.  Examples include the cost of a no-till planter and cost of cover crop seed.  However, these same practices can also provide significant savings, such as less fuel consumption using no-till and greater nutrient retention through the cover crop.

Every farming operation is a unique blend of soils, macro- and microclimates, production systems, management decisions, and their interactions, so calculating potential profitability of different soil health-promoting systems requires a large amount of information before reliable conclusions can be drawn.  Currently, partners such as the Soil Health Partnership led by the National Corn Growers Association, are addressing this need through on-farm demonstration and evaluation sites across the Midwest U.S. 

Risk
A key aspect of economics that is often overlooked is the concept of economic risk.  This is another area where we may have some real opportunity. 

While the concept of soil health includes chemical, physical, and biological properties, our ability to increase a soil’s organic matter content cuts across all three.  Most accurately measured as soil organic carbon, increases lead to enhanced nutrient availability, reduced erosion, greater water holding capacity, increased rate of water infiltration (therefore reduced runoff), and other benefits.  It should also not go unstated that increasing soil organic carbon is a major component of what is often described as “carbon sequestration.” 

A review of several studies showed that a 1% increase in soil organic carbon increases a soil’s capacity to hold plant-available water by approximately 2500-12,000 gallons per acre in the top 6 inches alone!  Consequently, increasing soil organic carbon through soil health practices not only benefits the environment, but also enhances on-farm resilience to both drought and heavy precipitation.  We, at the Soil Health Institute, hypothesize that such increases in resilience lead to greater yield stability and therefore reduced economic risk for producers.  Thanks to a recent grant from the Walton Family Foundation, we are currently conducting that analysis and plan to widely distribute those results to farmers and ranchers by next winter.

Monetization of Soil Health
To the extent that healthier soils reduce economic risk and enhance productivity, it naturally follows that soil health assessment could conceivably become an important component of land valuation.  This may be expected to drive additional adoption of soil health-promoting practices and systems. 

Although much more complex, establishing economic values to the ecosystem services derived through soil health could be yet another important aspect of monetizing soil health to drive adoption.  Such efforts could include water quality and climate change mitigation benefits, whose quantification would contribute to expanding water quality and carbon markets.

Conclusions
The current interest in soil health represents a rare opportunity for simultaneously addressing our food production and natural resource needs.  Together, with additional collaborations that include manufacturing partners such as General Mills, agricultural partners like us the Soil Health Partnership and National Association of Conservation Districts, private conservation partners such as The Samuel Roberts Noble Foundation and The Nature Conservancy, public partners such as USDA-NRCS and USDA-ARS, and many others, economically viable solutions can be advanced to benefit farmers, society, and the natural resources upon which we all depend. Learn more at soilhealthinstitute.org.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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