Environmental Services Revenue
Note: Core innovation in Klaus Mager's Regenerative Agriculture model discussed during the OGM 2025-11-06 call.
The Concept
Farmers grow two crops:
- Food crop - traditional revenue stream
- Environmental benefit crop - new secondary revenue stream
How It Works
Payment for measurable environmental benefits:
- Soil health improvement
- Cover crops planted
- Nitrogen runoff reduction
- Carbon sequestration
- Biodiversity enhancement
- Water quality improvement
The Process:
- Farmer promises specific practices
- Create contract
- Monitor and measure outputs
- Pay for verified benefits
The Cascade Effect
Example: Nitrogen Reduction
To reduce nitrogen runoff, farmers must:
- Improve soil health
- Plant cover crops
- Consider no-till farming
- Rotate crops
- Possibly add perennials
Result: "All these other things fall into place"
One payment stream triggers system-wide regeneration.
Successful Example
Mississippi Delta:
- Farmers paid to reduce nitrogen into Mississippi River
- Easy to measure
- Incentives sufficient to motivate conservative farmers
- "There's just so much money at stake that they are going to do it"
Why It Works
Economic alignment:
- Makes regeneration profitable
- Not asking farmers to sacrifice income
- Adding revenue, not replacing it
- Measurable and contractible
System change:
- Single incentive shifts entire system
- Positive feedback loops
- Cascading benefits
Scalability
Klaus's belief: "You can absolutely shift into regenerative practices at scale if farmers are being incentivized and paid for it"
The Challenge
Support structure needed:
- Equipment costs for new practices
- Technical assistance
- Market infrastructure
- Measurement systems
Related Concepts
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