ImpactAlpha, April 14 – U.S. farmers plant more than 85 million acres of soybeans to supply animal feed, industrial biofuels and everyday food products. But soy farming is linked to deforestation, soil erosion and other negative environmental impacts.
Agricultural giant Cargill and the Walton Family Foundation are partnering with the Iowa Soybean Association to encourage the state’s 40,000 soy farmers to invest in soil health improvements and water conservation through a pay-for-success funding initiative called the Soil and Water Outcomes Fund. Grants from the two partners will compensate farmers for water quality improvements and soil carbon sequestration.
Approximately 10,000 Iowa farms have enrolled in the fund’s pilot program, which offers farmers payments of $30 to $45 per acre based on their results, Reuters reports. If successful, the fund’s first year could remove 100,000 pounds of nitrogen and 10,000 pounds of phosphorus from water by stemming chemical run-offs.
Quantified Ventures, which has supported other pay-for-success environmental initiatives, helped design the fund. Sustainable Environmental Consultants is tasked with verifying results.
Other efforts to support regenerative farming practices include Iroquois Valley Farmland, which lets investors to finance farmers’ conversion to organic practices; Ejido Verde in Mexico, which is financing reforestation on productive, communal lands; and regenerative agriculture financing from Danone North America, Rabobank, and a raft of other investment firms (see, “Agriculture funds are investing billions to regenerate soil – and communities”).
The Soil and Water Outcomes Fund is unique for its outcomes-based financing.