Figure 2: A model for blended finance in a landscape. This illustrative blended finance model is one of several potential financing models that can be considered for scaling regenerative agriculture. It was developed by Pollination.
The capital to support farmers with agronomic advisory is typically provided by philanthropic capital. With concessional finance in place to de-risk potential early losses in transition, blended finance models make investments into a landscape’s transition appealing to private investors. With these two funding sources in place, commercial capital providers can offer farmers lower interest rates, longer tenor and/or grace periods on loan repayment.
All of these blended or coordinated funds are then re-enforced by insurance and re-insurance programs catered to the regional risks associated with regenerative agriculture transitions and incentives from corporate off-takers, who offer transitioning farmers additional incentives such as price premiums, long-term off-take agreements and payments for ecosystem services.
Further, the financial structuring work that is done in preparing a blended finance model lifts much of the administrative burden of financing from farmers, who are presented with the resulting package of incentive and supports.
Activating landscape partnerships for impact on the ground
Landscape collaborations sit at the core of agricultural transitions. OP2B aims to serve as an activation hub for collaborations across landscape initiatives, farmers, industry, policy and finance to scale landscape projects. In 2025, this will take shape through scaling transitions, innovating, and creating public private partnerships.
Figure 3: OP2B’s 2025 ambitions to activate landscape partnerships for accelerated transitions in Europe
The OP2B coalition has learned through its 2024 work that meeting farmers’ transition needs will rely on coordinating and collaborating toward common sustainability and nature goals to overcome financial barriers transition as well as collaboration for harmonized metrics and MRV and advocacy.
The OP2B coalition calls on public and private agriculture and food stakeholders to join our growing cohort of value chain, finance, local entities, public bodies and farmers to build transition pathways to scale regenerative agriculture in Europe. Collective action allows stakeholders to pool resources, share knowledge and leverage collective influence to meaningfully support farmers in transitions. Join us in building a better future for agriculture in Europe.
Reach out to Lucy Schroder at [email protected] to learn more.
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Publish date : 2024-12-18 00:16:00
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