Producing food, securing livelihoods, protecting human and animal health, and managing natural resources can no longer be viewed and approached in isolation. To achieve these interconnected goals, holistic approaches that include systems-thinking are required. Only comprehensive, integrated strategies that uphold human rights will be able to end poverty, eradicate hunger, promote inclusive growth, sustainably manage the planet’s natural resources, and address climate change and biodiversity loss.
AEEs represent an attractive investment opportunity that is in line with this systemic approach and which generates multiple positive impacts:
- Agroecology offers a holistic and systemic approach, addressing the root causes of food systems failure and enabling a real transition towards equitable, resilient and sustainable food systems.
- Agroecological enterprises offer opportunities for superior risk-adjusted returns that will increase in the long term due to climate change and stricter regulations.
- The global investment environment is changing, and increased regulation and changing consumer demand will increase pressure to move away from traditional investments. The time to become a future-proof investor is now.
- With climate change being the biggest threat to investments in agriculture, investing in AEEs can boost the long-term resilience of investments.
AEEs further build capacity for broader social and environmental change and can alter people’s perceptions and understanding of the value of local food production. They are a key ingredient to transform the agricultural sector, which is one of the main drivers of economic growth and job creation in the Global South. In order to shift away from conventional agriculture, we need innovators and a diversity of tactics at the local, regional, national and global level. Forward-thinking, innovative businesses that look beyond business as usual and try to redirect food systems towards agroecology already exist.
Window of opportunity to get ahead of fast-evolving regulations
Regulatory landscapes for businesses
The regulatory landscape for the agriculture and food sector has undergone a profound shift in recent years by giving greater weight to environmental protection and labour standards. Concerns about climate change, environmental degradation, pollution, biodiversity loss and exploitation of labour are giving rise to a new generation of market regulations, as well as reshaping consumer preferences. Ultimately, the business as usual of the 20th century will become outdated in a growing number of markets. These shifts call for innovative business models and investment strategies that create value through generating positive impacts on people and plants. Businesses and investors that have their eyes to the horizon and keep pace with these changes will be able to tap into promising opportunities.
Amid growing awareness of the harmful effects of food systems, regulatory efforts aimed at steering agriculture and food systems onto a more sustainable path are underway. For example, the European Union’s Deforestation Regulation (EUDR) aims to curb forest loss and degradation driven by agricultural expansion, by imposing strict due diligence and traceability requirements on companies selling products in the European market or exporting them from EU countries. As of January 2025, requirements will apply to seven major commodities (cattle, cocoa, coffee, palm oil, soy, rubber and timber) and their derived products. The scope of affected products is vast, including chocolate, tyres, leather and furniture. Companies in targeted sectors will have to demonstrate compliance with the EUDR if they wish to gain or maintain access to the European market.
Regulatory changes for investments
The EU is also taking measures to steer the flow of private capital towards sustainable investments. For example, the Sustainable Finance Disclosures Regulation (SFDR) requires financial market players and advisors to disclose to investors information about how sustainability factors affect the value of and return on their investments, as well as how they integrate sustainability risks into their investment decisions. The aim is to ensure that investors are provided with sufficiently clear and concise information to make informed decisions.
Additionally, the development of financial sector frameworks – such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the Task Force on Climate-related Financial Disclosures (TCFD) – highlights the increased focus on financial flows that protect biodiversity and the climate.
Due diligence laws aimed at protecting human rights and the environment are being passed in a rising number of countries. Decades of effort to encourage multinational companies to take responsibility for their supply chains have made it clear that the voluntary approach is not enough. An overview of such laws in major consumer markets can be viewed in the Guide to Human Rights Due Diligence laws. Surging awareness among concerned citizens and mounting pressure on decision-makers and lawmakers are driving this trend. By 2019, legislation restricting single-use plastics had been passed in 127 countries, in no small part due to activist and citizen campaigns.
Subsidies in agriculture
Currently, many subsidies support harmful practices in agriculture. However, amid growing evidence about the high costs and harmful externalities associated with our current food systems, more governments are starting to shift their support towards more sustainable and just food systems. Repurposing harmful subsidies and supporting fair and sustainable agriculture offers a huge financial opportunity for governments.
Combined with above-mentioned changes in the policy environment and greater awareness about the true cost of food, changes in the subsidies landscape represent a shift in government strategies that will hugely impact the performance of agribusinesses. In the case of agroecological enterprises, these policy shifts will be strongly beneficial.
The shift in governments’ interests has, for example, been especially noticeable as global economic dynamics and the war between Ukraine and Russia have triggered a surge in synthetic fertiliser prices. This has encouraged governments to focus more on fostering locally produced organic fertilisers.
A growing number of governments in Africa are also becoming more acutely aware of the high costs of food imports, which currently total about USD 43 billion annually for all the continent. Focusing on creating more local and sustainable food systems would require spending USD 15 billion per annum – but would also create estimated savings of USD 201 billion across Sub-Saharan Africa, making doing so an attractive mid-to long-term economic pathway.
Consumer awareness and preferences
Consumers are increasingly mindful of the impacts of their purchases and guided by a desire to do no harm. As a result, consumer behaviour is changing and consumer preferences are shifting towards more sustainable, ethical and healthful products. For example, in the United States consumer products that make environmental, social and governance (ESG) related claims are selling better than similar products without such claims, especially in food product categories. Most telling, a recent study showed that preferences for environmentally and socially responsible products are not limited to high-income or niche populations. Rather, American consumers across incomes, life stages, ages, races and geographies are buying products bearing ESG-related claims.
In the UK, a 2023 study showed that 37% of consumers considered biodiversity when making a purchase. Moreover, one in four consumers were prepared to pay more to protect biodiversity, for products in sustainable packaging, and for products and services from suppliers that respect human rights or commit to ethical working practices. While 35% of British consumers want additional regulations that require companies to offer more sustainable options for consumers, they also want businesses to support them in adopting more environmentally sustainable habits. These trends are reflected in findings by advertising agency Havas Group Worldwide: 73% of global respondents believe that brands must act now for the good of society and the planet and 65% of consumers believe that when it comes to driving positive change, brands bear as much responsibility as governments.
These trends are not exclusive to high-income countries. A market survey carried out in South Africa at the height of the Covid-19 pandemic showed that, despite the great majority of consumers feeling economically stretched, at least half were still willing to pay extra for ‘purpose-driven’ products – i.e. products with a better carbon footprint (54%), that are responsibly sourced (51%) or that are good for company employees (48%). Moreover, 64% of consumers reported a willingness to pay extra for healthier and more nutritious foods. A study on demand for agroecological products by Practical Action in Uganda and Kenya also confirmed consumers’ greater focus on healthy and nutritious food.
Engagement, awareness and action in support of nature and biodiversity are growing globally, according to a study commissioned by the World Wide Fund for Nature (WWF). This change has greatest momentum in emerging markets, where people are experiencing biodiversity loss faster and more noticeably than elsewhere. While pressure on governments to enact regulations that protect the environment and ensure human well-being is growing, and many governments are taking action, consumers also expect businesses to provide products and services that align with these values. In China, the world’s second-largest economy, 41% of consumers report wanting eco-friendly products.
The time to act is now
These developments matter for investors. To prevent non-compliance chipping away at companies’ bottom lines and share prices, investors ought to prioritise enterprises whose business models are fit for new regulatory regimes that centre around ESG. To ensure market access to major markets like the EU and expansion within these markets, investors should bet on enterprises with competitive value propositions that benefit people and the planet. When it comes to tapping into the preferences of conscious consumers, businesses that can demonstrate their commitment to the welfare of people, animals and the planet will fare best. For investors, this means focusing investments on companies that provide sustainable and ethical goods and services.
Agroecological enterprises fit the bill on all these fronts. With support from investors, AEEs will have the means to invest in innovations and new product lines that are competitive in major markets and generate good returns on investment, while contributing to a more sustainable world.
Profitability of agroecological enterprises
Profitability of agroecological production
Growing evidence demonstrates that agroecological farming is profitable in terms of yield, prices, and productivity, even more so given the scarcity and increased prices of chemical fertilizers and other inputs. Additionally, agroecological businesses are inclined to be diverse, which increases their resilience and protects against losses.
Investments in agroecological systems can deliver superior risk-adjusted financial returns
A 2023 study by the World Business Council found that farmers can expect higher profits and yields and a 15–25% return on investment (ROI) after transitioning from conventional to regenerative agriculture systems.
Another study focusing on the economic performance of organic farming systems found that, out of 1,645 farms studied, those that were under organic management enjoyed 144% higher yields than those that were not.
The higher returns can also be linked to the fact that agroecological products can be sold to higher value markets such as organic.
However, transitioning can be expensive and challenging, due to the high cost of gaining knowledge and capacity building. A report by IDH estimates that for a single farmer with about 0.5 hectares, such costs total USD 67. This translates into USD 134 per hectare per year.
👉 Resources: Cultivating farmer prosperity: Investing in regenerative agriculture (World Business Council for Sustainable Development) | How is organic farming performing agronomically and economically in Sub-Saharan Africa? (ScienceDirect)
Agroecology offers comparable or better yields
An overview study by the International Union of Conservation of Nature (IUCN) found that agroecological and regenerative farming systems attained much higher yields – between 68% and 300% higher depending on the practice and region. Long-term yield comparison produced evidence suggesting yields in agroecological farming increase over time and after a transition of three to five years.
👉 Resources: Regenerative Agriculture in Africa report 2021 (iucn.org) | How is organic farming performing agronomically and economically in sub-Saharan Africa? (ScienceDirect) | Profitability on ecological organic farms in the Tropics (fibl.org) | The economic potential of agroecology: Empirical evidence from Europe (ScienceDirect)
Agroecological farming systems have lower operating costs due to reduced need for external inputs
Agroecology focuses on natural cycles and systems and therefore also has an emphasis on closing farm cycles. Agroecological farmers often use composting and other on-farm resources to replace external inputs, which reduces input costs significantly. Additionally, with synthetic fertiliser prices rising and availability decreasing, locally produced organic inputs become more important and offer a more economically viable alternative.
👉 Resources: Positive effect on farmer capital | Agroecology as a response to agri-input scarcity | Economic impact of using organic fertilisers vs. agrochemicals | Profitability on ecological organic farms in the Tropics (fibl.org) | Lower inputs costs for agroecological farmers
Greater community wealth, resulting in market growth and customer retention
As consumer awareness around healthy and nutritious foods increases, agroecological enterprises are well positioned to meet increased local demand. Through its focus on communities and rootedness in local contexts, agroecology can improve the wealth and well-being of whole communities.
Agroecology leads to healthier and more productive communities
Evidence suggests that agroecological farming communities have healthier and more nutritious food and are more food secure than their non-agroecological counterparts.
👉 Resources: Evidence from Ecuador | Human and social values in agroecology (ucpress.edu) | Positive effects on food security/nutrition: Can agroecology improve food security and nutrition? A review (ScienceDirect) | Building resilient and healthier communities: Climate Change, Food Security, and Health: Harnessing Agroecology to Build Climate-Resilient Communities (mdpi.com) | Impact on hunger: Adidja 2019 (ruforum.org) | More Jobs and Community Development in the Global North | Economic and community benefits
Enhanced natural capital, including through regenerating degraded land
Agroecology and regenerative agriculture contribute significantly to regenerating land and conserving soils. This has positive implications for yields as well as for the diversity of ecosystems in soils and on farms.
👉 Resources: Regenerative Agriculture Report: An opportunity for businesses and society to restore degraded land in Africa (IUCN) | Regenerative Agriculture Report (cdn-website.com) | Integrated use of fertiliser micro-dosing and Acacia tumida mulching increases millet yield and water use efficiency in Sahelian semi-arid environment (springer.com)
Superior climate resilience because healthy soils cope better with droughts and floods
Robust scientific evidence demonstrates that agroecology increases climate resilience. A study found that agroecological and regenerative systems increased water conservation, leading to between 40% and 170% higher yields.
👉 Resources: Climate resilience and agroecology | Agroecology as a Climate Adaptation Approach (AFSA)
Positive impacts on ecosystems and biodiversity, plus the chance to be paid for them (e.g. through carbon or biodiversity credits)
Agroecology offers a pathway towards agriculture that enhances biodiversity, restores ecosystem functions and ultimately protects nature. Its focus on diversified systems allows for greater plant diversity and therefore positively affects biodiversity.
👉 Resources: Farming with biodiversity towards nature-positive production at scale (panda.org) | More biodiversity on organic and agroecological farms
Investability of agroecological enterprises
As the field of investing in AEEs is still novel, there is not yet a substantial set of data available, so we will continuously update this section as we and our partner stakeholders collect more.
General observations:
- There is a pipeline of investable AEEs which have emerged under unfavourable conditions, most notably with limited access to external finance. Most are self-financed and therefore present low risk to investors when investment in agrifood enterprises is properly approached.
- AEEs are already profitable, despite being held back by unfavourable conditions. They are ready for take-off if they get the right support and finance.
- Returns on capital are competitive in comparison to other agrifood SMEs.
- As with all agrifood SMEs, investors should still manage risks associated with individual enterprises – such as the risk of an AEE defaulting on a loan – via investing in debt or equity funds that pool together investments in multiple AEEs.
The following data points – and specifically those related to return on capital and assets – provide quantitative evidence that AEEs can be viable investments.
Background: Biovision Foundation and Shona established in 2023 the Neycha Accelerator & Fund with the goal of supporting agroecological enterprises with capacities, capital and access to networks. An analysis of the first cohort of AEEs in Neycha yielded the following initial insights on their investability.
The following table offers a snapshot of which value chains and countries 20 enterprises supported by the Neycha Accelerator & Fund operate in:
Kenya | Uganda | Total | |
Input manufacturing and/or input retailing | 5 | 1 | 6 |
Input manufacturing and production | 0 | 1 | 1 |
Production | 0 | 1 | 1 |
Trading | 1 | 0 | 1 |
Processing (and/or production and/or trading) | 2 | 5 | 7 |
Exporting (and/or trading and/or) processing) | 3 | 1 | 4 |
Total | 11 | 9 | 20 |
AEEs are profitable and growing businesses
The 18 enterprises that participated in Neycha’s bootcamp and for which figures are available had an average annual revenue of USD 120,000 in 2021 (Covid-19 year) and of USD 156,000 in 2022 if we disregard two outlying enterprises (see diagram).
This represents a sales growth of 30%. The average annual revenue for participating Kenyan enterprises in 2022 was USD 291,000 excluding the two outliers on the lower end, and USD 193,300 for 2021. The Ugandan figures are lower: USD 60,200 for 2022 and USD 43,400 for 2021.
The enterprises’ impressive gross and net profit margins, of over 50% and around 20% respectively, are presented in the diagram below (analysis disregards two start-up outliers as well as one company undergoing restructuring).
Returns on capital are competitive
While we don’t yet have data for return on equity ratios, the enterprises’ returns on operating capital – and on total capital – are competitive. In 2021, 16 of the 20 enterprises under study generated a return on capital employed (a measure of how efficiently a business uses its operating assets) of 52%. And their return on total assets (a measure of how efficiently a business uses its entire capital base) was 44.5%. (Ratios are pre-tax. Figures for 2022 are available for only 13 enterprises, so are not presented.)
Internally financed as AEEs lack external financing
Of the 16 first-cohort enterprises for which reliable long-term debt and equity data is available, 10 have a debt to equity ratio (long-term debt divided by share capital plus reserves) of 0%. Two have a ratio of between 1% and 99%, one has a ratio of between 100% and 199%, another one has a ratio of between 200% and 299% and a further two have a ratio of 300% or higher. (No debt to equity figures are available for the remaining four enterprises.)
This indicator of financial risk shows that the majority of enterprises in the cohort have relied entirely on internal sources of financing for growth up until now. And because available equity provides good security for external funders, for most of those that have some external funding, the risk to funders is very low.
For agrifood SMEs, impact investors aim for debt to equity ratios of 1.0 to 1.5, which provides good security for a loan in the case of losses. Furthermore, the debt to equity ratio of agrifood SMEs is often higher if based solely on the formal accounts of the company, as many have use of assets (e.g. land or buildings) that are registered under the name of the shareholder.
The unfriendly financing environment for agrifood SMEs in general and for agroecological agrifood SMEs in particular (e.g. high interest rates and onerous funding terms) is a key reason for such enterprises’ low external and high internal funding levels.
A level playing field in food systems: the true costs of food
True Cost Accounting is an approach that assigns a monetary value to all the hidden costs to society, the environment and health that an economic activity generates.
Food systems are not currently structured to factor in such external costs. AEEs are therefore not rewarded for their positive social, environmental and health impacts. This means they do not operate on a level playing field with conventional agrifood enterprises that cause environmental and social harm and sometimes even receive government subsidies. This can make it difficult for AEEs to compete with producers of food that is cheap but which carries the hidden but very high price tag of environmental destruction and human ill health.
AEEs as an investment opportunity
Market opportunity for AEEs
As agroecological enterprises are not yet widely known, and therefore also not actively selected when investing in small and medium-sized agribusinesses, the market for agroecological enterprises has not yet been analysed in a systematic manner. However, a 2023 study by Practical Action and Biovision examined demand for agroecological produce in Kenya and Uganda and identified value chains for investment:
Agroecology demand and market study Kenya
The study in Kenya, which focused on the tomato and mango value chains as well as biological inputs as a priority sector, identified a strong and clear preference among all income groups for agroecological produce (understood as fairly, healthily and sustainably produced food). It also identified very high demand for such food when prices are equal or only slightly higher than conventionally produced food. As most healthy food in the market is still premium priced or certified organic, the available consumer demand for safe and nutritious food cannot be met. This highlights that there is a need for agroecological production that is less costly than and as safe and nutritious as organic production to be scaled up and to penetrate mass markets. It also highlights that the agroecological movement needs to retain its focus on affordability and advocate for the affordability of agroecological products to become mainstreamed in society, which is in line with agroecological principles and development pathways (shortening value chains; localised, territorial market systems; encouraging conventional farmers to produce agroecologically; and scaling agroecological production). The Practical Action study also argues that more attention needs to be given to Participatory Guarantee Schemes as an alternative to organic certification.
The study identified the following demands from Kenyan consumers, which prove there is a market for agroecological produce:
- Urban consumers want food that is free from chemicals.
- Urban consumers want food that is locally produced and produced by small farmers.
- Many consumers cannot afford high price premiums.
The study further identified AEEs involved in the following activities as especially interesting for investment:
- Trading fresh and raw produce via cooperatives
- Processing and exporting dried and juiced mangos (and other fruits)
- Producing and trading agroecological inputs, such as biological pest control technologies, and especially biofertiliser.
However, the study also found that many AEEs are still relatively small and do not yet require large amounts of finance. This is due to the relative youth of the sector, the playing field being biased against them in comparison to conventional enterprises and the fact that AEEs are not offered adequate finance products or are invisible to financiers.
Agroecology demand and market study Uganda
The study in Uganda, which focused on the tomato and pineapple value chains as well as biological inputs as a priority sector, produced similar results. It identified a strong and clear preference among all income groups for agroecological produce (understood as fairly, healthily and sustainably produced food). The study also identified very high demand for such food when prices are equal or only slightly higher than conventionally produced food. This local demand is driven by health considerations, nutritional value and environmental concerns.
Similarly to the Kenya report, people in Uganda, especially from lower income groups, were found to be unable or unwilling to pay premium prices. As in Kenya, most healthy food in the market is still premium priced or certified organic, and the available demand cannot be met. This again highlights the need for scaling agroecological production and introducing more participatory guarantee systems. The one difference to Kenya is that most people in Uganda consider agroecological production to be the ‘default’ system (i.e. smallholders not having access to or being unable to purchase and apply chemical inputs). This may not always be the case in reality, but consumers’ perception that it is may remain.
The study further identified AEEs involved in the following activities as especially interesting for investment:
- Producing and trading fresh and raw produce through cooperatives
- Processing and exporting dried pineapple products
- Producing and trading agroecological inputs, such as biological pest control technologies and, especially biofertiliser.
In both countries, tomato processing seemed to offer potential. However, it is impossible for local processors to compete under present conditions, given the limited transition so far of tomato production to agroecology, as well as trade barriers in the form of regulations governing the import of processed tomato products.
An underinvested sector
There is further evidence of the investment opportunity presented by AEEs. Multiple studies document the chronic underfunding of agricultural small and medium-sized enterprises (SMEs) despite their crucial role in the economy. In East Africa, for example, agriculture generates up to 30% of GDP and employs about 65% of the workforce, but receives only 2–7% of total bank credit.
A 2023 report by Open Capital estimates the annual funding gap for agricultural SMEs in Sub-Saharan Africa to be USD 82 billion. The report also found that 54% of these SMEs are partially or fully financially constrained. Closing this financing gap could create 21 million jobs and therefore have a tremendous positive impact.
The reasons behind the lack of access to capital differ depending on the type of lender (e.g. local commercial banks versus microfinance providers). Where traditional lenders have trouble assessing the bankability of SMEs in general, commercial banks only serve larger enterprises with a track record and collateral. Microfinance lenders typically finance smaller-sized enterprises, leaving the so called ‘missing middle’ underserved.
This funding gap is even wider for agroecological enterprises. For example, a study on AEEs in East Africa conducted by AFSA confirmed that there are no financial service providers specifically targeting AEEs. Also, many financial service providers offer financial products that are out of reach for AEEs.
A study by the CASA programme further found that only 1.5% of global climate finance is channelled into small-scale agriculture and that only 7% of that finance goes to value chain actors, which mostly consist of small-scale farmers and rural community initiatives. Additionally, the majority of this funding (about 95%) is from public sources. This demonstrates that there is a huge opportunity for financing the sector.
There is also a macroeconomic case for investing in AEEs. By 2040, regenerative agriculture could increase agricultural production by 13%, support nearly five million full-time equivalent jobs, and generate more than USD 70 billion in gross value added (GVA) per year across Sub-Saharan Africa. Other estimates suggest that USD 1 invested in land restoration can create between USD 7 and USD 30 in economic benefits, while protecting biodiversity and fighting climate change.
On a macroeconomic level, a transformation to more sustainable food systems could create up to USD 10 trillion of benefits a year, bring improvements to human health and limit global heating to 1.5C above pre-industrial levels.
Resilience of investments: investing in long-term future-proof enterprises is less risky
Investing in sustainable and social enterprises like AEEs is less risky in the long term than investing in conventional agribusinesses, especially given high inflation, price fluctuations in the agricultural sector and the fact that climate change and water shortages pose the biggest risks to agricultural investments. AEEs are much more climate change adaptable than conventional agribusinesses. And agroecology is the most resilient agricultural system, as it offers greater capacity to respond to extreme weather events such as droughts and floods and stronger defences against pests and diseases, helping make people, communities and ecosystems more resilient.
During Covid-19, AEEs were proven to be the backbone of local food supply. The pandemic additionally demonstrated how resilient food systems rely on linkages and the interrelatedness of human, animal and ecological health. The same was true for the fertiliser crisis caused by the Russia-Ukraine war, during which local organic fertiliser producers stepped up to offer alternatives for synthetic fertilisers that were either expensive or unavailable.
Because protecting the environment and biodiversity is a fundamental part of agroecological enterprises’ business model, investing in AEEs can help funders mitigate broader financial risks. Approximately half of the world’s total GDP, or about USD 44 trillion, is dependent on nature and its services, which means not protecting nature and biodiversity poses a huge risk to the foundation of all profit generation.
Investing in AEEs is also less risky than investing in conventional agribusinesses. And AEEs will perform better in the longer run given the shifts in investment-related regulations, subsidies and trade policies that are described at the beginning of this chapter.
AEEs’ non-financial returns: positive social and ecological impacts
Agroecology’s holistic food systems approach – which addresses the root causes of failings in our food systems and aims for transformative change – means it can generate multidimensional benefits and help us achieve the Sustainable Development Goals (SDGs). Because agroecology is based on diversity, resilience and equity, it can tackle the interconnected challenges facing our food systems, such as climate change, biodiversity loss and food insecurity.
👉 Resources:
- Andhra Pradesh as an example of a scaled agroecological transition and its impact: Natural farming through a wide-angle lens (futureoffood.org)
- Multidimensional benefits of agroecology in Mali: Evidence on the multidimensional performance of agroecology in Mali using TAPE
- Agroecology as a pathway to achieving the SDGs (FAO)
- Modelling of how agroecology contributes to achieving the SDGs (Biovision)
Social and economic benefits
Human health and nutrition
By employing agroecological practices such as crop rotation, intercropping, soil management, integration of livestock, and agroforestry, farmers can increase the diversity of crops and animals grown on their land. This provides a wider range of essential nutrients. A literature review from 2021 found that households in low and middle-income countries with agroecological farming systems enjoyed better food security and nutrition. For example, agroforestry systems that incorporate trees and shrubs into farming landscapes can provide a variety of fruits, nuts and other edible products that are often high in vitamins, minerals and other nutrients. In addition, intercropping, or growing multiple crops in the same field, can help to balance nutrient uptake and soil health, resulting in more nutrient-dense crops.
Agroecology also emphasises the use of organic and natural fertilisers, which can increase soil fertility and the nutrient content of crops. By avoiding the use of synthetic fertilisers and pesticides, agroecological practices can also help reduce exposure to harmful chemicals that can have negative impacts on human health. There is also a strong link between soil health and water availability and quality. For example, healthy soil retains 25% of its volume in water: Soils Store and Filter Water – Improving Food Security and Our Resilience to Floods and Droughts (fao.org).
Furthermore, agroecology promotes the use of traditional and local crop varieties that are often better adapted to local growing conditions and have higher nutritional value than commercial monocultures. By preserving and promoting the use of these crops, agroecology can help ensure that local communities have access to a diverse range of nutrient-rich foods.
The Covid-19 pandemic further demonstrated how industrialised agricultural practices can substantially threaten human health. Covid-19 is one of several pandemics – including, for example, African swine fever and novel influenza H1N1 – to have been linked to large-scale animal production that relies on heavy use of antibiotics and other medications, thereby exacerbating the evolution of drug-resistant bacteria and viruses. Agroecology offers a clear alternative that can increase the health of our whole food system and make it less prone to disease.
👉 Resources:
- Positive impact of agroecology on nutrition and food security
- Malawi: production diversity associated with dietary diversity and positive impact on nutrition
- Chemical Pesticides and Human Health: The Urgent Need for a New Concept in Agriculture
- Agroecology and the emergence of a post-COVID-19 agriculture
- Human health impacts: Natural farming through a wide-angle lens (futureoffood.org); increased dietary diversity in households, lower health costs and fewer working days lost due to illness.
Food security and resilience
Agroecology can help tackle the global food crisis by promoting sustainable and diversified farming practices that prioritise local food systems, reduce reliance on chemical inputs and increase resilience to climate change.
Agroecology can help reduce the number and severity of famines by promoting diversified and resilient farming systems that increase local food production and reduce dependence on external food sources. Agroecological practices such as crop rotation, agroforestry, and integrated pest management can increase soil fertility, reduce crop losses and improve yields, thereby ensuring food security for local communities. In addition, agroecology emphasises the importance of equal access to resources, which can help address the root causes of food insecurity and reduce vulnerability to famine.
👉 Resources:
- Who profits from agroecology to secure food and nutrition? On access of women to markets and assets (frontiersin.org)
- Agroecology as a response to agri-input scarcity (FAO and Biovision)
- Response to the fertilizer crisis in Ethiopia (The Water Channel)
- Resiliency of agroecological systems: Agroecology and the emergence of a post-COVID-19 agriculture
Social justice, equity, and access to resources
Agroecology promotes social justice, equity and access to resources by prioritising the participation and empowerment of local communities, particularly small-scale farmers, women, youth and indigenous peoples, who are often marginalised and excluded from decision-making processes related to food and agriculture.
Agroecological practices such as seed saving, agroforestry, and water harvesting promote local knowledge and traditional farming practices and are often better adapted to local conditions than conventional agricultural technologies. This empowers local communities to be in control of their own food systems and can help to reduce dependence on external inputs such as seeds, fertilisers and pesticides, which are often controlled by large corporations.
In addition, agroecology emphasises the importance of social and economic justice by promoting fair and equitable access to land, water and other resources necessary for food production. This can help address historical and ongoing inequalities in access to resources, particularly for marginalised groups.
Agroecology also values biodiversity and the conservation of natural resources, which can have significant benefits for local ecosystems and the health and well-being of communities that depend on them. This can help to promote environmental justice and protect the rights of future generations to access and benefit from natural resources.
👉 Resources:
- Violence and food systems (ohchr.org)
- Increased social capital: Natural farming through a wide-angle lens (futureoffood.org)
Gender equality
Agroecology offers opportunities for women and can strengthen them through:
- Empowering women to have more agency over resources and compensation
- Knowledge building
- Increasing financial resilience
- Fairness and access to markets by focusing on shorter value chains
- Resilience to climate change effects and shocks to the food system
- Improving family nutrition and health.
Focusing on women offers multiple advantages. As women make up the largest share of food producers, helping them transition to agroecological practices will have a significant impact on food systems. And as women are mainly responsible for the food security and health of their families, empowering women will unlock multiple positive health and nutritional impacts for whole communities.
In conventional agricultural production systems women often suffer from unequal access to agricultural inputs and markets, which leads to lower productivity. Agroecology provides women with the resources and knowledge necessary to diversify their food production and consumption, enabling them to play a more active role in decision-making processes. This results in enhanced resilience and better health for entire families. Furthermore, agroecology promotes the equitable sharing and appreciation of local resources and knowledge, benefiting both men and women. Agroecological entrepreneurship is one of the key drivers for women’s access to resources and resilient organic markets. An FAO report from 2023 quantified that more equality in agrifood systems could boost the global economy by USD 1 trillion and reduce the number of people living with food insecurity by 45 million.
👉 Resources:
- Women especially gain from agroecological production systems – an example from Nigeria: Who profits from agroecology to secure food and nutrition? On access of women to markets and assets (frontiersin.org)
The challenges for small and medium-sized agricultural enterprises, and especially agroecological enterprises, to access finance are further exacerbated for women entrepreneurs. Women receive a small fraction of the little investments going into agriculture. Despite women’s impactful role (about 70% of the agricultural labour force in Sub-Saharan Africa is female), they only receive 7% of the total investment into agriculture. A Root Capital report , based on analysis of its own investment data over 10 years, found that agricultural enterprises with higher levels of female leadership and participation are more stable and grow faster, with compound annual growth rates that are 5% higher than non-female-led enterprises and average annual growth rates that are 10% higher. They also acquire more funding after a first Root Capital loan and default less frequently. Loans to women-led enterprises additionally yield on average USD 17,850 more in profits for lenders than loans to non-women-led enterprises. Further reports calculate that yield would increase by 20–30% if women had the same access to productive assets as men.
As the evidence above suggests, stronger efforts should be made to understand the needs of women and female entrepreneurs and thereby facilitate the development of more gender-sensitive investments.
👉 Resources:
- Entry points for gender lens investing by CSAF, Root Capital and Value for Women: Closing the Gender Gap in Agricultural Investments (v4w.org)
- How agroecology enhances smallholder farmers’ access to productive resources and who benefits: Who profits from agroecology to secure food and nutrition? On access of women to markets and assets (frontiersin.org)
Local value generation and economic opportunities
SMEs are the backbone of communities and many economies. Agroecological enterprises have an additional special role to play in communities as they are proving to be a catalyst for local value creation and job generation, especially for youth and women. With their resilient and diversified practices, they create a robust foundation for economic growth and support diverse and resilient ecosystems. Moreover, the emphasis on local markets and direct-to-consumer sales inherent in agroecological models further amplifies economic benefits, creating a positive cycle of sustainable agriculture, community prosperity and fair job opportunities.
Livelihood improvements for smallholder farmers and poverty reduction
Research provides compelling evidence supporting agroecological farming as a transformative approach to nourishing communities and empowering farmers while advancing the SDGs. Using True Cost Accounting methods, a study by the Global Alliance for the Future of Food compared the economic, social and health impacts of different farming systems in the Indian state of Andhra Pradesh. The findings challenge the prevailing belief that chemically intensive farming is necessary to meet the food production demands of a growing population. The study demonstrates that farms utilising natural inputs achieved yields that were equal to or higher (on average by 11%) than yields from other systems, while maintaining greater crop diversity.
👉 Resources: Positive impact of agroecology on farmer livelihoods in Haiti | Agroecological farming in India and its effect on livelihoods
Appreciation of context specificity of agriculture
Agricultural solutions are always highly context specific and are embedded into local communities. The strength of agroecology lies exactly in its ability to appreciate cultural differences and local knowledge as well as local environmental conditions. Unlike one-size-fits-all approaches, agroecology acknowledges the uniqueness of each ecosystem, climate and community. By intertwining traditional wisdom with modern science, agroecological methods adapt to the specific conditions of a region, harnessing the power of local knowledge. This appreciation for context is crucial in enhancing resilience and sustainability.
As agroecological enterprises have a focus on knowledge exchange and local knowledge integration, these enterprises are embedded in communities and foster a sense of community ownership and empowerment. Agroecological enterprises further understand that agricultural systems are not universal but are tied to the unique features of a particular region. This understanding informs the practices and decisions of AEEs.
Ultimately, this context specificity ensures that agroecological enterprises contribute not only to the ecological health of a region but also to the social and economic well-being of local communities by creating a sustainable and contextually attuned agricultural model.
Environmental benefits
Biodiversity
Agroecology can help to decrease biodiversity loss in several ways.
Promoting crop diversity: Agroecology promotes the use of diverse crop rotation, intercropping and agroforestry systems, which can help to create more diverse agroecosystems. This can support a wider range of plant and animal species, including beneficial insects, birds and other wildlife, which can help to increase biodiversity and support ecosystem services.
Conserving traditional farming practices: Agroecology values local knowledge and traditional farming practices, which often prioritise the conservation of natural resources and the promotion of biodiversity. By promoting the use of traditional and local crop varieties and species, agroecology can help to conserve genetic diversity and maintain unique ecosystems.
Reducing synthetic inputs: Agroecology promotes the use of natural inputs such as compost, biofertilisers and integrated pest management, which can help to reduce the use of synthetic fertilisers and pesticides that can have negative impacts on biodiversity.
Creating habitat for wildlife: Agroecology can create habitat for wildlife through the use of practices such as hedgerows, windbreaks, and riparian buffers, which can provide shelter, food and breeding habitat for a wide range of species.
👉 Resources: Agroecology and Biodiversity | Farming with biodiversity towards nature-positive production at scale (panda.org) | More biodiversity on organic and agroecological farms
Climate change
Agroecology can help mitigate climate change risks and contribute to stopping climate change in several ways.
Carbon sequestration: Agroecology promotes the use of practices that help to store carbon in soil and vegetation, such as agroforestry, cover cropping and conservation agriculture. These practices can help to reduce greenhouse gas emissions and remove carbon dioxide from the atmosphere.
Reduced use of synthetic inputs: Agroecology promotes the use of organic and natural inputs and practices, such as compost, biofertilisers and integrated pest management, which can help to reduce emissions of greenhouse gases associated with the production and use of synthetic fertilisers and pesticides.
Resilient farming systems: Agroecology promotes diversified and resilient farming systems that can better withstand the impacts of climate change, such as droughts, floods and extreme weather events. By promoting crop diversity and promoting the use of local varieties and species, agroecology can help to reduce farming systems’ vulnerability to climate change.
Reduced food waste: Agroecology promotes more sustainable and local food systems, which can help to reduce emissions associated with the transportation and storage of food. In addition, by promoting the use of locally grown and consumed food, agroecology can help to reduce food waste and improve food systems’ overall efficiency.
👉 Resources: Beyond the farm: Exploring the synergies between agroecology and conservation communities (Biovision & FAO Dialogue) | Landscape restoration: 4Returns – Connecting ecologists and economists to restore landscapes (commonland.com) | The potential of agroecology to build climate-resilient livelihoods and food systems (fao.org)
Soil health and regeneration of land
Agroecological enterprises play a crucial role in nurturing soil health and facilitating land regeneration through their commitment to agroecological practices. Unlike conventional farming, which relies heavily on chemical inputs that degrade soil quality over time, agroecological enterprises prioritise methods that enhance soil fertility and structure. Cover cropping, crop rotation and minimal tillage are integral to agroecology, fostering biodiversity in the soil and promoting the activity of microorganisms. By avoiding synthetic pesticides and fertilisers, agroecological practices prevent soil contamination and degradation. The emphasis on diversified planting also mitigates erosion and improves water retention. In essence, agroecological enterprises act as stewards of the land, working with natural processes to revive and sustain soil health, ensuring the long-term productivity and resilience of the ecosystems they cultivate.
👉 Resources:
- An opportunity for businesses and society to restore degraded land in Africa: Regenerative Agriculture in Africa report 2021 (iucn.org)
- The businesses regenerating Africa’s soil: The benefits of regenerative agriculture (cdn-website.com)