How to finance the future of farming | Berry Marttin

Summary

TED Talks Daily: How to Finance the Future of Farming | Barry Martin

In the March 5, 2025 episode of TED Talks Daily, hosted by TED, Barry Martin delves into the critical intersection of agriculture and climate change, presenting innovative financial strategies to transform farming into a cornerstone of environmental sustainability. As both a seasoned banker specializing in agricultural finance and a practicing farmer, Martin offers a unique perspective on the challenges and solutions facing modern agriculture.

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1. The Current Impact of Agriculture on Climate Change

Barry Martin begins by highlighting the significant environmental footprint of contemporary farming practices:

• Greenhouse Gas Emissions: Agriculture and land use change contribute over 20% of all greenhouse gas emissions globally. This encompasses activities like deforestation, the use of chemical fertilizers, emissions from livestock, and diesel-powered machinery. (02:26)

• Water Usage: Agriculture accounts for a staggering 70% of all global water withdrawals, placing immense pressure on water resources.

• Biodiversity Loss: Modern farming is a major driver of biodiversity decline, affecting numerous species and ecosystems.

Despite these challenges, Martin emphasizes that agriculture holds immense potential to mitigate climate change. "Scientists estimate that farmers can take carbon out of the air by means of growing trees or putting it in the soil. The impact is estimated as big as wind and solar," he asserts (03:10), positioning farmers as pivotal players in the fight against global warming.

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2. Barriers to Sustainable Farming Transformation

Martin outlines several obstacles that hinder the transition to more sustainable agricultural practices:

• Time-Intensive Biological Processes: Improving soil quality or altering livestock requires significant time, often 5 to 10 years, before tangible benefits are realized. (04:00)

• Variability of Biological Processes: Factors like weather, fire, rain, and drought introduce unpredictability, complicating the implementation of sustainable techniques.

• Lack of Regional Adaptation: Many climate-smart agriculture methods are not yet tailored to specific regional needs, limiting their effectiveness across diverse farming environments.

• Financial Constraints: Transitioning to sustainable practices demands increased labor, new machinery, training, and poses risks of crop failure, making it financially burdensome for farmers.

• Market Limitations: Consumers are currently neither willing nor able to pay premium prices for sustainably produced foods, diminishing the economic viability of such transitions.

Martin encapsulates the predicament with a poignant observation: "If you put all this together, it takes a lot of time, effort, and money to transition. There is no viable business case at this moment. It costs the farmer more than it pays to transform." (05:30)

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3. The Role of Carbon and Biodiversity Credits

To address these challenges, Martin advocates for leveraging carbon and biodiversity credits as financial incentives for farmers:

• Lack of Standardization: There is an absence of standardized metrics and accounting rules to accurately measure carbon sequestration at the farm level. "We don't have standard metrics or accounting rules to measure carbon at the farm level," he notes (06:15).

• Ownership Ambiguity: Uncertainty surrounds the ownership of carbon and biodiversity credits—whether they belong to the farmer, the government, or product buyers.

• Price Transparency: Unlike commodities like corn, which have clear pricing mechanisms (e.g., Chicago Board of Trade), the price for selling carbon credits remains opaque. "You really don't know," Martin emphasizes (07:00).

• Permanence and Risk: The variability of carbon sequestration due to environmental factors necessitates robust insurance schemes to protect farmers against potential losses from events like droughts or wildfires.

• Government Intervention: Martin calls on governments to establish a legal framework that defines ownership, ensures minimum pricing benchmarks, and facilitates the scaling of carbon credit systems. "Governments, please set the basic legal framework for us to be able to use those credits and very important, a minimum price for the benchmark," he urges (09:05).

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4. Success Story: Project Acorn

Illustrating his vision, Martin shares the success of Project Acorn, a pioneering initiative designed to finance eco-services for smallholder farmers in challenging regions:

• Technology Integration: Utilizing satellite imaging and mobile phone photography, Project Acorn accurately measures the amount of carbon stored on farms. (08:20)

• Carbon Credit Generation: The data collected is used to issue certified carbon credits, which are then auctioned to the highest bidders on the international market, fetching up to $35 per ton of carbon. "It doesn't look much, but if you're living on $2 a day, it's quite substantial," Martin explains (09:50).

• Scale and Impact: To date, Project Acorn has reached over 310,000 farmers and generated 300,000 tonnes of carbon credits, with ongoing growth. "If we could scale this up to the whole world, customize it to the needs of farmers in Brazil or Bangladesh, I think we could accelerate change," he envisions (10:15).

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5. Envisioning the Future of Farming

Concluding his talk, Martin paints an optimistic picture of the future farm:

• Integrated Financial Systems: Farmers will seamlessly trade carbon credits alongside traditional commodities like corn, with real-time pricing accessible via mobile apps. "I have two prices, one of my carbon and the other one of my corn in my pocket," he imagines (10:50).

• Economic Stability: By monetizing eco-services, farms will achieve consistent cash flow, ensuring economic viability for future generations. "On that farm, cash is king. It will cash flow for the generations to come," Martin affirms (11:00).

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Conclusion

Barry Martin's insightful presentation underscores the urgent need to reimagine agricultural financing to combat climate change effectively. By adopting standardized carbon and biodiversity credit systems, providing economic incentives, and fostering government support, farming can transition from being a significant contributor to climate challenges to becoming a pivotal solution. His success with Project Acorn offers a tangible blueprint for scaling such initiatives globally, promising a sustainable and prosperous future for both farmers and the planet.

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Notable Quotes:

• Barry Martin: "Scientists estimate that farmers can take carbon out of the air by means of growing trees or putting it in the soil. The impact is estimated as big as wind and solar." (03:10)

• Barry Martin: "We don't have standard metrics or accounting rules to measure carbon at the farm level." (06:15)

• Barry Martin: "If you put all this together, it takes a lot of time, effort, and money to transition. There is no viable business case at this moment. It costs the farmer more than it pays to transform." (05:30)

• Barry Martin: "Project Acorn has been able to obtain up to $35 per ton of carbon. It doesn't look much, but if you're living on $2 a day, it's quite substantial." (09:50)

• Barry Martin: "On that farm, cash is king. It will cash flow for the generations to come." (11:00)

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This comprehensive summary encapsulates Barry Martin's key discussions on financing sustainable farming, the challenges faced, and the innovative solutions poised to revolutionize the agricultural sector in the fight against climate change.

Transcript

[Tony]

G'day America. It's Tony and Ryan from the Tony and Ryan Podcast from Down Under.

[Ryan]

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[Barry Martin]

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[Barry Martin]

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[Elise Hu]

You're listening to TED Talks Daily, where we bring you new ideas to spark your curiosity every day. Hi, I'm your host, Elise Hu. Modern farms and current agricultural practices are vital to life as we know it. They're also a major contributor to climate change. As a banker who works with farms and a farmer himself, Barry Martin is deeply aware of the problem, but he believes that farming is also a major part of the solution. Coming up, innovative efforts to make agriculture a leader in the fight against climate change.

[Tony]

Well, at the farm, cash is king. It's a business. I'm a farmer myself. I raise cattle, grow corn, I build hay. But I'm also a banker and I financed farmers for more than 30 years I actually had the honor to sit at the kitchen table of large and small farmers on all continents except Antarctica. Not many farmers there. Well, one thing I can assure you, farming is a risky business. Profits are very small, you are dependent on the weather and you don't know what that's going to be. You grow a crop, you don't know the price, you don't know the quantity, and you don't know the quality. So there's not much room for error there. And yet farming needs to change if we want to reach the goals of Paris and feed a growing population. More than 20% of all greenhouse gases actually are emitted by agriculture or land use change. This includes deforestation and let me show. Let's stop that immediately. Chemical fertilizers, emissions from animals, diesel of your tractor. But global farming is also using 70% of all water withdrawals. It's also major contributor to biodiversity and species loss. Add that all together quite impactful. However, it's also big part of the solution. Scientists estimate that farmers can take carbon out of the air by means of growing trees or put it in the soil. The impact is estimated as big as wind and solar. Quite something. So if that's the case, why farmers are not rushing to change their ways and save our planet, the reality is quite different. First of all, biological processes take time, at least five to 10 years to start changing the quality and the characteristics of your soil. It takes time to change your herd or to grow trees. Also, biological processes are very variable. They depend on weather, they depend on fire, rain, drought. Also, we actually have not fully tested all climate smart agriculture techniques. Some of them have not even been adapted to regional needs. Then you have the cost when you change, you need more labor, you need new machines, you need training. Probably a failure of a crop. Then you have the consumer. The consumer today is not willing or able to pay for more sustainable foods. So if you put all this together, it takes a lot of time, effort and money to transition. There is no viable business case at this moment. It costs the farmer more than it pays to transform. Meanwhile, at the other side of the fence, my neighbor who didn't change his ways of farming is enjoying a nice cash flow. I call this the valley of death. This transformation is long and is the best way actually to of my neighbor to buy me out. As one farmer once said to me, the best way of guaranteeing my farm for the next generation is to pay my bills tomorrow. Why should I risk the farm? Let's help the farmer then to do the transition. Actually I'm a true believer. I'm a true believer that we should pay for eco services, that we should pay the farmer for the investments in nature and in carbon. We do have the instruments already that are the carbon and the biodiversity credits. But why are they not scaling? First? We actually don't have standard metrics or accounting rules to measure carbon at the farm level. Let's even go further. We actually don't know actually who really owns those carbon and those biodiversity credits. Is it the government, is it the farmer? Or is it the one that's buying the products? We don't know about the price. We don't have a price transparency. It's actually a big wild west out there. If you want to sell corn, you can get the price immediately from the Chicago Board of Trade. If you want to sell a ton of carbon from your farm, you actually don't know. You really don't know. And then we have the discussion about permanence. And once. What is that? Is that carbon and biodiversity are very variable and they're dependent on weather and fire, so the farmer needs to be protected against those variations. We need a good insurance scheme. And last, the government. Governments, please set the basic legal framework for us to be able to use those credits and very important, a minimum price for the benchmark. Farmers are great stewards of the land, good entrepreneurs, smart operators, and once the right conditions are set, I'm absolutely sure they will quickly adapt and change. How do I know that? While I was at Rabobank, I have participated in many structures and schemes to support farmers to transition. Some of them failed, some of them were very successful, but all the good ones, all the successful ones involved some form of income or risk mitigation. Let me share with you one successful project, one I'm pretty proud about, and that's Project acorn. ACORN was designed to pay for eco services to smallholder farmers in small and very difficult countries. What we have done there is that we used satellite imaging and very simple pictures taken by mobile phones of trees on your farm. Cross the data and calculate how much carbon was actually stored. With this calculation, we issued certified carbon credits to the international market through an auction system and we just sold them to the highest bidder. We have been able to obtain up to $35 per ton of carbon. It doesn't look much, but if you're living on $2 a day, it's quite substantial. Acorn today reaches more than 310,000 farmers and has issued 300,000 tonnes of carbon and is still growing. I think it's an amazing project and if we could scale this up to the whole world, customize it to the needs of farmers in Brazil or Bangladesh, I think we could accelerate change. But let's be realistic. This is not easy. Many carbon and biodiversity credit schemes have failed. However, it's not different than what happened with agricultural commodities bonds of shares. It took time and effort to get them standardized and quoted on global stock exchanges. Let's see how all of this comes together and how I see it working out on the farm level. For that, I want to invite you back to my farm on One morning I'm sitting on my horse, kind of dreaming. I look at the horizon. It's a green horizon full of trees. I take my mobile phone out, I push my app, my trading app, and I see two prices, one of my carbon and the other one of my corn in my pocket. I just have my last financial carbon statement and it shows I did well. I have 40,000 tons of carbon in surplus. I have a big decision to make. Shall I sell this carbon or the corn to buy my neighbor? That's the farm of the future where we will be paid for our eco services and to produce nutritional food. On that farm. Cash is king. It will cash flow for the generations to come. Thank you very much.

[Elise Hu]

That was Barry Martin at TED's Countdown Dilemma series on the future of food in 2024. If you're curious about TED's curation, find out more at ted.com curationguidelines and that's it for today's show. TED Talks Daily is part of the TED Audio Collective. This episode was produced and edited by our team, Martha Estefanos, Oliver Friedman, Brian Greene, Lucy Little, Alejandra Salazar and Tonsika Sarmarnivon. It was mixed by Christopher Faizy Bogan. Additional support from Emma Tobner and Daniela Balaurazo. I'm Elise Hu. I'll be back tomorrow with a fresh idea for your feed. Thanks for listening.

[Dr. Catherine Saunders]

Dr. Catherine Saunders is a leading obesity specialist at Weill Cornell Medicine and co founder of Flight Health, a software and clinical services company. Democratizing access to medical obesity care. One of her goals as a physician is to create a long term relationship with her patients and break down stigmas surrounding obesity. She recently sat down with one of her patients, Barbara, to talk about what an empathy and science based approach to healthcare actually looks like.

[Barbara]

I really battled obesity and I have been battling it my entire Life. In 2010 I weighed about 340 pounds. I had a roux en y bypass. I probably lost about £150 and I felt pretty good, but my weight gradually began to creep up. I went back to my bariatric surgeon. I was looking for help. He looked me straight in the eye. He was very blunt, and he said, go see Dr. Katherine Saunders.

[Dr. Catherine Saunders]

We talk a lot about how it's so important in this field of medicine to have a good partnership between the patient and the care team against the disease, especially in the field of obesity medicine. It's so critical that we as healthcare providers listen to our patients. They've heard from so many other healthcare providers. Oh, just eat less and exercise more. Just go off and lose weight. It's a long term relationship where there has to be trust.

[Tony]

Yeah.

[Barbara]

Dr. Saunders, you said there are going to be bumps in the road, and when that happens, I want you to contact me immediately. The fact that you gave me that permission, it was almost like vaccinating me against failure.

[Dr. Catherine Saunders]

Yeah. It's so much better for us to understand early what's going on. We have to be detectives, and we can very often pinpoint what it is.

[Barbara]

Dr. Saunders, you probably remember the time I came to you and I said, I've started eating in the middle of the night and I have no idea why. I was flabbergasted. We talked and came up with a plan.

[Elise Hu]

Yeah.

[Dr. Catherine Saunders]

And it's my job to figure out why is this happening, what's not working? I think we adjusted the timing of one of your medications to cover nighttime better. When you reached your health goals. We decided to transition from the phase of weight loss to the phase of weight maintenance. We recognized at that point that your prediabetes was gone, your blood pressure was in the normal range, and all of the health complications that were associated with your higher weight were improved or gone.

[Barbara]

That was really exciting. You allow yourself as a patient to start to think about what that means for your life. I realized that I didn't fear being around food anymore.

[Dr. Catherine Saunders]

It's really important for people to understand that what they are struggling with is not their fault and there are effective treatment plans. Hearing stories like Barbara can change so many lives.

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