Potential profit reduction. A lack of financial incentives. Poor experience with implementation.

Those were the three biggest barriers to the adoption of conservation practices for farmers today, according to Purdue University's latest Large Commercial Producer (LCP) Survey.

Yet nine in 10 farmers said they know data and technology can help them make smarter decisions tied to on-farm operations, including efforts to reduce their environmental impact.

Insights from this report and other research conducted by Lourival Monaco, Research Assistant Professor in the Agricultural Economics department at Purdue University and DIAL Ventures Research Manager, paint a picture of a farming community that knows embracing climate-smart technologies and sustainable practices is best for them and the environment.

They simply need the correct incentive structure to get started.

That means providing them with emerging tech that can boost their on-farm productivity and positively impact their bottom lines. It also means connecting them with dedicated partners who can support them during their transition to more sustainable practices.

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Moving to climate-smart tech and practices proving difficult in the farming community

Regenerative agriculture is being adopted by many farmers — just to varying degrees.

Consider the latest data from the USDA Census of Agriculture. Its research found many U.S. growers and producers have implemented reduced- or no-till practices recently.

Despite this, many farmers remain hesitant to alter their approaches. They need assurances that such a switch could be done efficiently and affordably.

Which climate-smart approaches and tech farmers adopt also depends on the ROI they believe they'd realize from implementing them.

Lourival noted how farmers need proof points that emerging ClimateTech — such as those he's helped bring to market at DIAL Ventures, a Purdue-operated venture studio building AgriFood companies with High Alpha Innovation — will provide strong financial results.

The more farmers know how a potential tool, service, or piece of equipment can improve their crop yields, boost worker productivity, reduce labor costs, streamline back-office tasks, and/or address other pain points, the more likely they are to invest in them, Lourival added.

The same applies to climate-smart tech:

‍Seeing the value it offers them and other AgriFood value chain members they partner with can entice them to invest their money, time, and resources into the tools.

"The adoption of climate-smart tech that help farmers implement sustainable, regenerative agriculture practices is more than just saying yes or no to them," said Lourival. "It involves deep business implications for farmers, including financial and cash-flow ramifications."

Farmers need upfront capital, insights into short-term yield risk, risk-sharing incentives, and other financial knowledge and assurances to switch over to regenerative ag operations.

Many growers and producers also need clarity around what the term technically means.

On its face, it seems pretty clear: a land-management approach that aims to improve soil health while reducing negative environmental impacts.

But University of Colorado Boulder researchers recently discovered dozens of studies and journals that use differing definitions for regenerative agriculture.

At the end of the day, education — both in terms of regen ag at large and the big-picture value it will provide — remains critical to spurring farmer adoption, Lourival added.

"Creating transformative climate-smart tech will only help stakeholders across the AgriFood space if farmers are able to onboard those tools seamlessly and have the resources, financial backing, and time needed to transition cost-effectively," said Lourival.

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Making the switch to climate-smart solutions work for everyone in AgriFood

Many farmers nationwide — many of whom are 60-plus years old and have had their farms in their families for decades — are resistant to changing 'the way it's been done.' They’re skeptical of adopting regen ag if they don’t have incentives, financial or otherwise, to do so.

The harsh reality is this transition is already happening in many places, albeit at different rates.

Ag industry leaders know the potential for new government regulations and increasing pressure from stake and shareholders will likely push for on-farm changes. That means producers will have to implement climate-smart practices sooner rather than later.

Farmers rightfully will factor in their own financial interests when making these changes.

But other AgriFood value chain members have a vested interest in climate-smart improvements — specifically, those that can help them meet sustainability goals and ensure landpartners' long-term success.

Consider ag retailers.

"Retailers understand that business opportunities that emerge from these practices are of fairly low margins, especially on cover crops, but they may help the farmer to have better financial results in the right circumstances but, more importantly, they solidify retailers’ position as trusted advisors," recent Purdue research found.

So, how can AgriFood value chain members— producers, processors, manufacturers, and distributors — work together to support climate-smart tech adoption so they all benefit?

According to Lourival, close coordination and collaboration is a must.

"Agriculture is one of the most important sectors that can promote sustainability," said Lourival. "While farming is the main engine that makes this industry run, it's not the only part that will create the solution.

"If we desire to have a sizable, long-term impact, the entire AgriFood value chain has to work together," Lourival continued. "A systems approach is fundamental and the only way shared goals can be achieved."

That's where DIAL Ventures enters the equation.

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Getting CPGs more involved and invested in climate-smart conservation adoption

One AgriFood value chain member that arguably wants to see climate-smart agriculture practices implemented as soon as possible are consumer-packaged goods (CPG) brands.

Many CPGs have target goals to reduce greenhouse gas (GHG) emissions. They aim to do so with carbon offsetting: having farmers make climate-resiliency changes on their behalf.

‍This issue many CPG brands face is convincing landpartners to adopt climate solutions, like carbon sequestration, that can help lower GHG emissions.

Lourival and the DIAL Ventures team are working to better enable CPGs to implement programs that help farmers adopt climate-smart practices that are measurable, reportable, and verifiable (MRV) and, in turn, create real value to all AgriFood stakeholders and shareholders.

"Today's CPGs have made bold promises regarding their sustainability goals," said Lourival. "They realize they don’t currently have the optimal approach to realize those goals, though.

In most cases, CPGs don’t have direct, upstream relationships — ones with growers and producers — to actively influence changes in on-farm production systems that will help them meet their own customers' and shareholders' demands, Lourival noted.

Lourival added how many CPGs' initiatives tied to GHG emission reductions are "one-offs" with very narrow, regional targets. In other words? They're low-impact initiatives.

And since there's very little industry-wide collaboration toward sustainability, they're far from appeasing their shareholders.

"These companies have a procurement-level structure, when it comes to sustainability results, meaning that they are looking to fulfill a need for regen ag sourced or low carbon goods" said Lourival. "Short-term goals and outcomes need to be met before longer-term goals."

That's where farmer incentivization by CPG brands can help.

DIAL Ventures is at the forefront of developing novel, potentially industry-altering concepts that could empower CPGs to financially back farmers' transition to regen ag and climate-smart practices.

"Creating a brand new ecosystem in which CPGs can provide the right incentives to farmers to cover the direct and indirect costs of this shift is something we're actively exploring," said Lourival.

"This would create an opportunity for a premium on products grown on farms and offer risk-sharing," Lourival explained.

Having already created transformative ag-focused startups, including Make Hay, Oaken, Croft, and Gripp, DIAL Ventures is committed to continue building and launching new companies in partnership with High Alpha Innovation that positively impact the AgriFood industry.

"The work being done in this latest venture-build program with DIAL is just another exciting opportunity to bring new, potentially disruptive climate-smart technologies to market," said High Alpha Innovation Director Ryan Larcom.