The OP2B coalition played a crucial role in 2024 by convening multi-stakeholder roundtables involving various actors in the agriculture value chain. This process led to the formulation of a collective vision for scaling regenerative agriculture transitions in Europe, with a focus on innovative finance, harmonized metrics and MRV, and advocacy.

Key Learnings on the Role of Innovative Finance

Existing financial incentives often fail to meet farmers' needs. Research shows that in the initial years of transition, farmers may experience a decline in profits due to increased operational costs. However, with the right transition supports, farmers can achieve significant profitability and a high return on investment in the long term. According to BCG analysis, farmers can reach between 70% and 120% higher profitability and a 15% to 25% return on investment over 10 years. Roughly €24 billion of public and private funds are available to support regenerative agriculture transitions in Europe, but the transition risks and costs still mainly rest on farmers' shoulders. An analysis by the European Investment Bank estimates that the financing gap for agriculture in the EU was between €19.8 and €46.6 billion in 2020, and the gap for the agri-food industry was more than €12.8 billion.

Integrated Financial Packages for Accelerating Transitions

Europe needs more comprehensive and holistic financial support mechanisms to finance and accelerate the transition. The complexity of the current mix of subsidies, loans, price premiums, and insurances creates a significant barrier to widespread adoption. A simplified financial landscape with integrated public-private financial packages is essential. Figure 1, the farmer financing stack, highlights the common financing needs of farmers during the transition period, such as new capital expenditures, shifted operational expenditures, innovation and local knowledge development, and new business models for ecosystem services. Public-private collaboration is needed to coordinate support to farmers and leverage investments from both public and private actors. Many transition-facilitating projects in Europe are already working on this, led by initiatives like Commonland, The EIT Food Regenerative Innovation Portfolio, Landscape Enterprise Networks (LENs), Livelihoods Funds, the Future Fit Dairy Initiative (FFDI), and Re-Ge-NL. These regional initiatives clarify the contributions of involved parties and present a clear case for farmers to adopt regenerative agriculture.

Blended Finance as an Instrument to Support Farmers

Blended finance at a regional level provides a structure for stakeholders to co-invest and achieve their individual investment objectives. Figure 2 shows an illustrative blended finance model for a landscape. Philanthropic capital typically provides the capital for agronomic advisory, while concessional finance de-risks potential early losses in transition. This makes investments in a landscape's transition attractive to private investors. With these two funding sources in place, commercial capital providers can offer farmers lower interest rates, longer tenor, and/or grace periods on loan repayment. All these blended or coordinated funds are reinforced by insurance and re-insurance programs tailored to the regional risks of regenerative agriculture transitions and incentives from corporate off-takers, who offer additional incentives to transitioning farmers. The financial structuring work in preparing a blended finance model also减轻了 farmers 的融资行政负担.

Activating Landscape Partnerships for Impact on the Ground

Landscape collaborations are at the core of agricultural transitions. OP2B aims to serve as an activation hub for collaborations across different initiatives, farmers, industry, policy, and finance to scale landscape projects. In 2025, this will be achieved through scaling transitions, innovating, and creating public-private partnerships. Through its 2024 work, OP2B has learned that meeting farmers' transition needs requires coordinating and collaborating towards common sustainability and nature goals to overcome financial barriers and for harmonized metrics and MRV and advocacy. The OP2B coalition calls on public and private agriculture and food stakeholders to join the growing cohort and build transition pathways to scale regenerative agriculture in Europe. Collective action allows stakeholders to pool resources, share knowledge, and leverage collective influence to support farmers in transitions. Reach out to Lucy Schroder at schroder@wbcsd.org to learn more.