Health as a revenue model for regenerative agriculture

Regenerative agriculture is gaining ground as an alternative to the current food system. It restores soils, enhances biodiversity, and contributes to a healthier living environment. However, large-scale transition remains elusive. A viable model that financially rewards societal value could accelerate the transition. Invest-NL, together with HarvestCare and Social Finance NL, explored whether results-based financing focused on health could contribute to this.

Paying for outcomes rather than effort

Result-based financing does not focus on the effort, but on the outcome. Invest-NL has already applied this financing model to preventive care, and is now exploring whether it is an effective instrument for regenerative agriculture.

The idea: Farmers are rewarded for the societal benefits they contribute to, such as healthier soil, less emissions, or a better living environment. This can work because the societal costs and benefits of agriculture – like health and a cleaner environment – are currently hardly reflected in prices or financing.

Promising, but not yet scalable

Growing evidence suggests that regenerative agriculture can indeed contribute to health improvements. Think of less exposure to harmful substances for farmers, agricultural workers, and residents nearby.

At the same time, the research shows that result-based financing in this context is not yet ready for broad application. Crucial prerequisites are still missing. The evidence for some effects, such as health benefits for consumers, remains limited. There are also no consistent definitions and KPIs to assess results, nor is there suitable legislation.

Without this foundation, it remains difficult to structure investments on a large scale and to distribute risks appropriately.

Realistic perspective, no quick solution

Invest-NL views result-based financing as a promising instrument to accelerate the transition to regenerative agriculture. It helps make societal value visible and fundable.

But before this model can be scaled up, investments need to be made in the prerequisites. This requires clear standards, better evidence, and new forms of collaboration between agriculture, health, science, and finance. A phased approach through regional pilots, combined with subsidies and further evidence-building, offers opportunities.

This exploration was a first step in better connecting societal value with financing. Now, it is up to the government, science, and the market to further develop the foundation.