A transition to a regenerative system will lead to low yields and margins in the short term, but long-term regenerative agriculture will “improve” soil quality.

That’s according to land agents Savills, which has recently published a report on the importance of soil health and whether or not regenerative agriculture is financially viable as part of its Savills Rural Research.

The report recognises the importance of soil health and states that soil is a “living catalyst for production”, and how the dependency on soil health can impact a farms inputs and resilience.

Soil health solutions

In order to improve soil health and lead to profitable farming, Savills’ research suggests a “holistic soil-health approach”.

One of the methods it suggests is reducing cultivations, as this can “allow beneficial networks” of fungal hypae to improve soil structures in order to prevent blackgrass.

It also mentioned dung beetles and, according to the company, “dung beetles perform about £473 million worth of work each year helping fertilise land and aerate soils”.

However, these beetles have had their population reduced due to wormers; it suggested to “mob graze” in order to reduce the need for wormers.

Cover crops were also highlighted, with Savills adding: “Cover cropping can significantly increase soil organic matter, leading to improved soil quality and mineralisable nitrogen supply.”

Regenerative agriculture

Regenerative agriculture is a collection of practices that improve soil health, sequester carbon, and have positive impacts on water and biodiversity – while still producing food.

The Food, Farming and Countryside Commission’s 2021 report found that the UK’s cereal yields were 27% lower with regenerative farming practices than in a conventional system.

The report found claims that the intensive nature of modern agriculture has “reduced soil health and impacted its productivity, causing a reduction in the ecosystem services it provides to society.

Regenerative agriculture is set to be a main component in reversing this trend.

The returns

Savills said that the consensus view is that six years is a “reasonable assumption” for the turning point in profitability.

It said that by this point a significant increase in soil organic carbon (SOC) is commonly observed. An increase in SOC of up to 2% has been shown to increase yields and reduce the reliance on nitrogen fertiliser.

Source: Savills Research

It added that to “unlock” widespread take up of regenerative farming practices could be in “carbon payments”, to minimise the financial risk to potential regenerative growers.

Benefits to regenerative farming according to Savills are resilient yields; improved soil health and biodiversity;increases in crop nutrient quality and flavour; lower expenditure on fertilisers; reduced fuel use and field traffic; and carbon sequestration.

Source: Savills Research

The company modelled the adoption of regenerative system on its own virtual farm. It consists of an 830ha top 25% arable producer on clay-based soil in the East Midlands, UK.

In its first year, the virtual farm’s net margin was 41% lower than the conventional system, despite the additional carbon and sustainable farming incentive (SFI) income.

Savills said that when analysing the figures in year six, the profitability had increased to 18% above that of conventional agricultural practices.

According to the research, pest burdens reduced
under the regenerative system and yields
were increased by 7% in year six.

Variable costs were cut by a further 10% to 26% lower than conventional agriculture.

Savills Research said that “there is no one-size-fits-all approach
to regenerative agriculture” and it added that an understanding is required that “significant change and the benefits will take time”.