Food giants set out to sell producers on regenerative ag

Pepsico and Walmart want to see regenerative agriculture practices used on two million North American acres by 2030

HOUSTON, Texas — Adam Kiel has some advice for farmers confronted by the dizzying array of regenerative agriculture programs.

“There are many opportunities, and they are confusing, I’ll be the first to admit. But that doesn’t mean you shouldn’t try something,” said the managing director of the Soil and Water Outcomes Fund, a program run by the Iowa Soybean Association.

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“Trying something doesn’t mean all of your acres. You can try it on one field and get a flavour for the program and see how it works.”

His organization has partnered with PepsiCo and Walmart in a seven-year, US$120 million program that encourages U.S. and Canadian farmers to improve their soil health and water quality.

The goal is for farmers to adopt regenerative agriculture practices on more than two million acres of farmland, delivering four million tonnes of greenhouse gas emission reductions by 2030.

David Allen, vice-president of sustainability with PepsiCo Foods North America, said it is an opportune time for these types of programs.

“We’re at a once-in-a-generation moment with regard to policy and financing that is available to enable this type of accelerated transition,” he said during a panel discussion at the 2024 Commodity Classic conference.

PepsiCo’s global agricultural footprint is seven million acres, half of that in the U.S. The company is dedicated to shifting much of that land to regenerative agricultural practices because consumers and investors are demanding it.

Claire Brierley, senior manager of strategic initiatives with Walmart’s corporate affairs department, said the world’s largest retailer set a target to reduce or avoid one gigaton of greenhouse gasses across its supply chain by 2030.

It achieved that target six years earlier than anticipated by sourcing 46 percent of its global energy needs through renewable fuel purchases, shifting packaging to recyclable and compostable products and diverting 78 percent of its waste from landfills.

“It’s a whole company effort and a whole global supply chain effort,” she said.

Allen said it all starts with agriculture. PepsiCo’s approach is that it wants to keep it voluntary.

“We want folks to opt in,” he said.

The company recognizes that some growers already use regenerative agriculture practices and it has programs to encourage them to continue or expand those practices. It also has programs for those starting out.

“We don’t expect a full field conversion or a full farm conversion right out of the gate,” said Allen.

The decision to work with the Iowa Soybean Association as a middleman was influenced by farmers.

“They want folks that they know and they can trust,” he said.

It was a way to provide growers with the agronomic help and peer-to-peer support.

“Change is hard, especially if you’re one of the first,” said Allen.

Kiel said farmers can propose a change in practice and within 48 hours they will get feedback on how much that change would pay. If they accept that offer, they will get 50 percent of that year’s contract value deposited in their bank account within a week.

Contracts are signed on a year-to-year basis.

“There’s a lot of unknowns with regenerative agriculture and locking yourself in to a 10-year contract may not be a good thing,” said Kiel.

The U.S. Department of Agriculture is footing the bill to administer the program for the first five years. During that time, farmers will receive 100 percent of the program funds.

After five years, the expectation is that growers will get 75 percent of the funds and the balance will cover administrative costs.

Both companies say they are in it for the long haul and have committed considerable resources to this and other sustainability programs.