Regen Farmers Mutual Case Study
Regen Farmers Mutual (RFM) employs a unique business model that was co-designed by a group of farmers, conservationists and Landcare members in July 2020. Their vision was to create a farmer-owned broker that would enable landholders to better engage in environmental markets – including carbon markets.
RFM helps farmers to recognise the value of their natural assets, share resources and aggregate their market power without a middleman. It has landholder collaboration at its core, including a mutual business model that directs a portion of the revenue generated to the farmer groups that support farmers in their local area.
The Catalyst for Change
- The world is transitioning to net zero. Farmers are looking to diversify income while shifting towards better regenerative agricultural practices to protect ecosystems.
- Environmental goods and services markets are growing, and the Australian market is set to be worth more than $49 billion by 2050, according to the CSIRO report Navigating an Uncertain Future 2030.
- These markets are often difficult to access for small producers.
- The Emissions Reduction Fund has high transition costs linked to monitoring and verification.
- Traditional brokers take large cuts from farmers and are benefiting disproportionally.
“[Regen Farmers Mutual] is the only opportunity currently available for small producers to participate in the growing biodiversity and carbon markets.”
– Rick Humphries, Small Horticultural Farmer, Queensland
The Opportunities
- As a farmer-owned broker, aligned with its land managers, Regen Farmers Mutual: creates the digital infrastructure, transaction processes and governance structures that enable farmers to create value with environmental assets through productivity gains, carbon crops and green provenance.
- Ensures the shared ownership of this infrastructure, enabling greater efficiencies in training, execution and compliance, and broadens the types of transactions and the value captured from data and provenance.
- Attracts private capital to invest in credible and well-structured transactions that work for farmers and the environment.
- Focuses on collaboration, which creates a supportive network for farmers practicing regenerative agriculture.
The Success Story
“The Regen Farmers mutual model is out there, it’s unique, it’s fit for purpose for allowing small producers on a regional basis to aggregate their environmental services and reduce the audit verification and assessment costs dramatically through the mutual model whereby we all participate, we all share the costs, and we all share the benefits.”
– Rick Humphries, Small Horticultural Farmer, Queensland
“The benefits that I see benefitting me personally, or Blue Dog Farm, are that I can use the year-on-year measurements as a factual management tool, for flora and fauna, water and soil carbon, I love that. I can use those numbers to prove provenance in the marketplace, so I can say to my customers, this is what we have done in the last 12 months, and of course the third reason why I am involved is that it will be really nice to trade those benefits in the marketplace.”
– Jacki Hinchey, Blue Dog Farm, Queensland
The Structure
- Regen Farmers Mutual is a company limited by guarantee, meaning it is democratically controlled by its members and has no ordinary shares.
- RFM have members not shareholders. Farmers can participate in decision-making for the mutual, via the Member Council and the Board and surplus earnings will be returned to members as rebates. Farmers become a member through using services of the mutual or its partners.
- Under the mutual business model, 80c for every dollar earned goes to the farmer, 10c to the farmer group that supports the farmer in transaction and 10c to the mutual to cover the costs of transactions and legal governance.
The Next Steps
As of October 2022:
- Regen Farmers Mutual are currently looking to scale their digital platform, Regen Digital.
- Regen Digital allows farmers to build a digital model of their land, to obtain an assessment of environmental values, and test how different environmental actions would impact operations and income.
Find out more…
https://regenfarmersmutual.com/
https://www.facebook.com/RegenFarmersMutual/