How to Weather the Coming Storm
João Roseiro, Agronomy Director for Europe at SLM Partners, explains how regenerative agriculture can improve climate resilience and support attractive long-term financial returns.
The landscape of global agriculture stands at a critical inflection point. When torrential rains descended on Valencia last month, delivering a year’s rainfall in just eight hours according to meteorologists, in addition to the terrible human cost the floods devastated farmland in a region that produces two-thirds of Spain’s citrus fruits, a critical export.
It was yet another stark warning about the fragility of our global agricultural systems and the urgent need for innovative investment strategies that can withstand increasingly volatile climate conditions. Currently, 74% of Spain is at risk of desertification and by the end of the century, nearly a fifth of its land could turn permanently arid, threatening some of the country’s most important agricultural regions.
The vulnerability of traditional agriculture
The problem is exacerbated by unsustainable farming practices, particularly in regions like Almería. There, intensive greenhouse farming has undoubtedly boosted crop yields but at a cost: groundwater is being depleted faster than it can be replenished and soil quality is rapidly deteriorating – with impacts on fertility and drainage. These farming methods, once the engine of Spain’s agricultural success, are now speeding up the environmental crisis they were supposed to address.
The fundamental challenge is clear: traditional agricultural models have inadvertently created fragile ecosystems. Global food systems have drastically reduced crop diversity, with just four crops – soybeans, wheat, rice and corn – dominating nearly half of the world’s farmland. The genetic base within these staple crops is narrow, leaving crops vulnerable to pests and diseases, as well as extreme weather events.
Climate change only amplifies these risks. Extreme weather events, from unprecedented rainfall to prolonged droughts, can decimate monocultural farming systems models designed to maximise short-term yield – and changing climates combined with ever-increasing global trade raises the risk from non-native diseases and pests.
An emerging alternative: regenerative agriculture
Part of the solution could lie in regenerative agriculture. The core proposition of this investment approach is radical yet simple: by emphasising complex soil ecosystems, diverse crop systems and integrated habitat management, we can align nature-positive practices with food production in a fast-changing market.
Regenerative agriculture is all about growing nutritious food and other products, such as textiles, building materials and bioenergy, in a way that improves soil health, supports a stable climate and enhances biodiversity while remaining economically viable.
This approach is gaining traction among investors, who are increasingly drawn to opportunities that not only generate strong returns but also create positive environmental impact – as explored in our recent white paper.
A strategic response to climate risk
Regenerative agriculture offers a promising path forward and many large corporates are already onboard. It represents a step change in agricultural investment that goes beyond sustainable farming. It’s about building resilient, adaptive agricultural ecosystems that can withstand and mitigate climate volatility. By focusing on practices that improve soil health, boost biodiversity and reduce greenhouse gas emissions, regenerative farming strengthens climate resilience across agricultural supply chains.
Examples of regenerative approaches include permanent crops like tree nuts and olives in Portugal and Spain, in areas with favourable climates and water availability, with investors partnering with expert local operators deeply integrated within their local value chains.
Because inputs such as fertilisers, pesticides and water are often inefficiently managed in conventional irrigated orchards, they can result in water pollution, soil degradation and biodiversity loss. In contrast, regenerative approaches work with nature to minimise negative impacts on the environment.
This can mean planting cover crops between the trees, minimising tillage, applying compost and biodiversity-enhancing fertilisers, mulch pruning residues and planting hedgerows to create pollinator habitats. Such methods improve soil health, enhance water retention capabilities and reduce irrigation requirements.
This approach not only helps farmers and food systems survive extreme weather events by building agroecosystems that are more resilient to heavy rainfall, flooding, strong winds and extreme temperatures. It could also slow climate change and reduce the severity of climate-driven disasters by capturing more carbon.
Aligning profit with planet
Regenerative agriculture is not a compromise between environmental responsibility and financial performance. They are not competing priorities but interconnected outcomes.
The economic advantages go beyond traditional sustainability metrics, with regenerative agriculture able to deliver superior, risk-adjusted financial returns to farmers and investors.
As well as environmental benefits, regenerative land management can be better for business than conventional farmland investments. These advantages stem from multiple sources, including reduced input costs through decreased chemical dependency, premium pricing for high-quality produce and better risk mitigation to extreme climate events.
Investing in resilience
In today’s world, climate resilience is no longer optional; it’s a fundamental investment factor. And investors have a unique opportunity – and responsibility – to managing climate-related agricultural risks and align their portfolios with resilient, future-ready practices.
Financial performance and environmental responsibility are dynamic, interconnected systems that can be strategically managed. Regenerative agriculture not only addresses urgent environmental challenges but also offers a competitive advantage through better risk management in the face of extreme weather.
As recent events in Valencia demonstrate, the cost of inaction far exceeds the investment required to build resilient agricultural systems. The shift to regenerative agriculture isn’t just beneficial for farmers and ecosystems. It’s a smart, sophisticated, forward-looking investment strategy that offers both financial returns and meaningful, positive impact, transforming potential vulnerabilities into strategic opportunities.
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