The big-picture benefits of regenerative agriculture are clear (and have been for some time):

Reducing greenhouse gas emissions by implementing more sustainable, on-farm changes enhances soil health, mitigates soil erosion, improves water quality, and increases crop resilience.

Long term, embracing a permaculture approach also offers financial benefits for farmers.

A 2023 World Business Council for Sustainable Development report found growers who shift from “conventional” farming to regenerative agriculture systems should see a return on investment of roughly 15-25%.

Consumer pressure for regenerative agriculture adoption is high (and increasing). Yet many wholesalers and retailers don’t see a strong-enough business case to incentivize growers and producers to make the switch.

Without the financial and logistical support structure from these downstream AgriFood value chain partners and investors — and the right technology to embrace a holistic agroecology approach — the status quo will persist.

DIAL Ventures, a venture studio operated out of Purdue University, creates novel solutions and advantaged startups with High Alpha Innovation to help AgriFood stakeholders make progress with their innovation efforts.

With companies including Gripp, Oaken, Croft, Fieldist, and Make Hay already launched to address big ag-related problems affecting farmers, processors, retailers, and other industry stakeholders, DIAL and our team now aim to build a new business that tackles the barriers to regenerative agriculture application.

Identifying innovation opportunities to solve the regenerative agriculture adoption issue

A 2024 AgFunder & ISF Advisors study found more than $56 billion has been invested in 6,300-plus AgTech businesses that have been focused on developing climate-adaptation solutions since 2012.

Yet the need for more (and more-impactful) regenerative agriculture tools remains high for growers and producers nationwide who must adopt more eco-friendly, on-farm practices to achieve Scope 3 emissions reductions goals — ones of importance to them and their supply chain partners (e.g., food brands).

That's why DIAL is working to bring new tech to market that can help farmers more easily and cost-efficiently make eco-friendly changes that can have a positive ripple effect throughout the entire AgriFood value chain.

Together with DIAL Innovation Fellows, we’ve spent more than three years researching the regenerative agriculture problem and identifying opportunity areas ripe for disruption.

We’ve discovered that, while there is seemingly no shortage of business ideas and concepts to explore in the climate-smart AgTech space, a lot of the issues plaguing the ag industry today are simply structural challenges for which no purpose-built solutions exists that can solve them. 

"The list of technological/digital developments that are allowing such disruptive innovations in the agricultural sector is enormous and very dynamic, since new … uses are being discovered every day," Lourival Monaco, Research Assistant Professor in the Agricultural Economics department at Purdue and DIAL Research Manager, recently wrote.

But we also recognize there are technology ‘gaps’ that have yet to be addressed within the agriculture industry that can help those at the top and bottom of the AgriFood value chain make and benefit from sustainability upgrades.

A few areas we’ve narrowed in on that seem ripe for disruption include:

1) Enabling sustainable agriculture through policy and finance

As noted, the potential for long-term profitability is high for producers who transition from conventional farming to a regenerative agriculture approach. But it’s often the first few years that are toughest for growers, given the typically high upfront cost of making on-farm alterations.

“In the first couple of years, as farmers turn to intercropping of soybeans with their wheat, our analysis found that farmers are likely see a decline in profits of up to 60% or more, due to lower crop yields and the added cost of seeds and new machinery,” recent Boston Consulting Group research found.

As Lourival explained, pivoting to green-ag practices “involves deep business implications for farmers, including financial and cash-flow ramifications."

This issue made it clear to us and DIAL Ventures the newer business models that provide farmers who implement regenerative agriculture practices with sufficient crop insurance, crop-plan warranties, and subsidies could enable them to withstand this early-stage yield drag.

Regenerative agriculture innovation opportunities

• Helping ag retailers advocate for farmers who are pioneering the adoption of regenerative agriculture practices by helping coordinate and support enrollment in relevant incentive programs
• Connecting ag lenders with farmers seeking to invest in transitioning their operations, inputs, and equipment to more sustainable options by providing more bespoke financing products
• Empowering crop consultants and agronomy specialists to warranty outcomes with advanced digital-twin modeling and scenario analysis to improve recommendations and success rates of the latest innovative products and practices coming from input manufacturers and university extension offices

2) Providing better environmental stewardship of farmland

"Nutrient runoff from agriculture practices poses a significant risk to waterway health and can have long-lasting and complex implications for the environment, ecosystems, and the human population," a 2023 study published in the Science of The Total Environment found.

Farmers know regenerative agriculture practices like minimizing tillage and planting more cover crops can help them prevent water and chemical runoff that can negatively affect communities in their region.

Union of Concerned Scientists Research Director for Food and the Environment Stacy Woods told ABC News these green irrigation optimization practices can "support healthy soil, and healthy soil can capture chemicals and keep them from running off of fields and into our waterways."

That said, it's clear to DIAL and our team that farmers need help to adopt these practices. Notably, they need to:

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• Secure enough upfront funding to make big, structural modifications (e.g., upgrading capital equipment, such as sprayers, spreaders, and field-monitoring solutions).
• Work with ag retailers and logistics specialists with expertise in nutrient management to make these changes (e.g., purchasing equipment, building diversion channels).
• Monitor water usage to ensure sustainable upgrades have the desired impact.

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We believe creating new, purpose-built tech and startups could help farmers address each of these challenges.

Regenerative agriculture innovation opportunities

• Helping row-crop farmers leverage public and private climate-smart incentive programs so they can tap into financing to make on-farm improvements that deter runoff and nitrate pollution
• Making it easier for farmers to better manage their water resources and soil-health quality so they can optimize their land management and ensure their irrigation systems are efficient
• Enabling landowners and institutional land managers to improve ecosystem development, including adoption of livestock rotational grazing, seeding native plants, and active wildlife management to enhance the survival of local populations and their natural habitats

3) Leveraging data and knowledge for sustainable agriculture

From navigating AgriBusiness supply chain challenges to forecasting near- and long-term weather patterns, analytics continues to play a pivotal role in strengthening and streamlining ag operations for all stakeholders.

"Analytics and its resulting intelligence will drive the success of agribusiness companies across the entire chain moving forward," Lourival recently wrote. "Having the right set of capabilities to leverage data resources that will be created is key to achieving competitive advantage in this space."

The analytics software market is certainly saturated.

But given there are seven or more steps involved in the typical AgriFood supply chain, critical data points are either not captured by specific stakeholders or shared with their partners at each stage in real-time to provide necessary transparency.

High Alpha Innovation and DIAL Ventures have identified several gaps we think are worth addressing to ensure there is strong transparency, accountability, and collaboration among AgriFood value chain members.

Regenerative agriculture innovation opportunities

• Helping processors improve traceability and digitize tracking of produce with its associated carbon-intensity data (i.e., every truck has to be sampled and fill out a log sheet of when they last hauled or washed the inside of the truck is a manual process)
• Enabling ag cooperatives and retailers collect, manage, analyze, and report the Rangeland Analysis Platform (RAP) data efficiently and accurately so they can provide value-added services
• Helping consumer-packaged goods brands aggregate and communicate product-level, carbon-intensity data so downstream buyers can better quantify commodities derived from regenerative agriculture practices
  

Building AgTech startups to solve big industry challenges: Our focus with DIAL Ventures

These exciting innovation opportunities are a result of the active engagement with both public and private organizations: from farmers and scientists, to international brands and industry associations. We are actively pursuing many of these options.

As with our other venture-build programs with DIAL Ventures, our team will work with DIAL Innovation Fellows to pitch the startups we believe will have the biggest impact in terms of regenerative agriculture progress across the AgriFood value chain, with AgTech investment decisions and a business launch to follow.

None of this would be possible without the genuine support of our industry partners across the country as they have most graciously hosted us at their fields, shops, labs, manufacturing lines, and corporate offices.

Our team and DIAL extend an invitation to the broader innovation, investment, and entrepreneur community to join us in our efforts to pursue the abundance of opportunity to create value for all ag stakeholders:

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• Work in the AgriFood space? Co-design solutions with us that you'd actually want to buy and use to make progress in your corner of the ag industry.
• Looking to back AgTech startups that solve big problems? We continue to launch new, innovative companies that are tackling critical AgriFood value chain issues, with the goal of scaling those businesses and providing venture-scale returns.
• Want to run an early-stage AgTech startup and help build and evolve its technology? Help us form and finalize ag-centric business concepts you believe you could help bring to market and disrupt the ag sector.

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We have a lot of work ahead of us, but also a lot of opportunity. Connect with us to learn more about our efforts with DIAL Ventures and how you can join — and benefit from — our venture-building journey.