News & insights The Future of Sustainability 2024/25 Regenerative cotton pilot pays farmers for making positive changes on farms Through an on-farm, farmer-focused pilot program in the Southeastern US, Forum for the Future and the Ecosystem Services Market Consortium (ESMC) explored how we might finance the transition to a cotton sector that benefits soil, ecosystems, climate and farmers. As a Bright Spot, this pilot presents a pathway to ensuring that the financial cost of the climate emergency does not fall on the most vulnerable. Finance can be a barrier to adopting regenerative practices — agricultural systems that work towards sequestering carbon, restoring biodiversity and supporting farmer livelihoods. Farmers may want to shift to regenerative practices, but they might not have the capital. They also need support to weather the ‘waiting period’ when the benefits of regenerative practices have yet to yield results, which can often last multiple growing seasons. The risks associated with transitioning fall mostly on farmers, whose operations are at stake if something goes wrong. Conventional financing mechanisms are often not enough or accessible to many farmers in the Southeastern US — especially historically underserved farmers (Black, Indigenous, smallholder, and young farmers, and others who have been disadvantaged and discriminated against). Cotton bales on a North Carolina farm. Image by Mark Stebnicki. Cotton shirts on a rack. Image by Thirdman. How are ecosystem services market programmes different from traditional business models? Ecosystem services market programmes in the US cotton sector present a new, collaborative solution that enables brands and buyers to invest directly in the regenerative transition for farmers. This collaboration between Forum for the Future and ESMC enabled a European brand to purchase the monetary value of ecosystem benefits that the farmer produced by adopting new practices on their lands (called an impact unit). Those payments for impact units went directly to the four farmers who enrolled in the programme. Concurrently, the brand was able to use the data collected on farms to show their shareholders and consumers how they are lowering Scope 3 emissions within their own supply chain, a process known as insetting. “If there's any sort of premium on that cotton that's being purchased outside of your typical base cotton prices — that's going to be something that will raise a farmer’s eyebrows... [it would be a game-changer for producers] to have that direct link into the buyer, as opposed to a large conglomerate with mills all over the world.” —Dr. Bruce Kirskey, Agronomist and researcher, Agricenter International Inc. And participant in Phase 1 of the regenerative cotton pilot Why does financing a just transition to regenerative agriculture matter? In the US alone, agriculture accounts for over 11.2% of greenhouse gas emissions, with conventional row crops like cotton contributing to massive topsoil loss that threatens food and fibre production. Farmers can begin to reverse these trends by adopting regenerative practices such as nutrient management, cover cropping, and reduced tillage. Through the pilot, Forum and ESMC developed the first-ever protocols to measure, monitor, record, and verify the impact of regenerative practice adoption in cotton. On the four farms enrolled in the pilot, over 191 mCO2e (metric tonne equivalent) of carbon was removed through soil sequestration and reduced (i.e. they avoided emissions, such as through fewer fertilisers). This is the same as the amount of carbon sequestered by 224 acres of US forests over one year, driving 489,907 miles in an average gasoline-powered car, or CO₂ emissions from burning 211,105 pounds of coal. In frame: Cotton yarns. Image by Janko Ferlič. What could the future look like if Ecosystem Services financing becomes the norm? Insetting platforms can play an important piece of the financing puzzle for farmers, helping redistribute risk and cost across all actors across the supply chain. If scaled, this methodology has the potential to link disparate, siloed corners of the supply chain, helping farmers access much-needed finance while allowing brands to better understand where the raw materials in their products originate. In the near future, they may also provide brands with unprecedented connectivity with farmers in an effort to trace products back to the farms where the raw material originates — allowing consumers the ability to learn more about the farmers that played a role in the fibres we wear every day and make more informed choices about what we buy. Creating this transparency and connectivity is the first step towards sharing the burden of changing our agriculture system for the better. “Forum for the Future’s Growing our Future initiative team’s approach to programme management, insight development, and professionalism has greatly influenced our Inclusion and Racial Justice and project management strategy. The team’s publishing of key takeaways and learnings from phase 1 of the cotton pilot – via the ‘Financing the Transition’ toolkit – and proactive approach in leveraging that work in the design of phase 2 has created a model that has inspired ESMC to invest in content and messaging of our own as a vehicle for amplifying and building community around our other project work.” —Doug Adams, Manager, Member Engagement + Equity, ESMC Questions to consider How can we ensure that other financing models for regenerative agriculture prioritize equity and accessibility for historically underserved farmers? What role can consumers and brands play in creating the necessary market conditions to encourage ecosystem services and results in more equitable pay and opportunity for farmers? Meet the Bright Spots A Forum for the Future initiative, in partnership with The Earthshot Prize, Rockefeller Philanthropy Advisors and Trane Technologies, the Future of Sustainability: Reimagining the Way the World Works is showcasing the social and climate initiatives shaping a better future, today. Manage Cookie Preferences