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  • Matthew McGarvey

The Need for Regenerative Farming in the Mekong

As COP26 draws near, much of the conversation around climate change has been focused on the need to transition the world away from its reliance on fossil fuels. Meanwhile, the role that agriculture—particularly regenerative agriculture—can have in reducing global warming and in protecting at-risk communities and ecosystems against the negative impact of climate change, seems largely absent from the conversation.

This is particularly true in the Mekong Delta, a region among those most exposed to the perils of climate change, but also most likely to benefit from the potential that regenerative agriculture presents in driving climate resilient economic growth.

Like many delta systems across Asia, the Mekong is being radically altered by anthropogenic and climate-driven forces. Large swaths of the delta have become unfarmable (salinized) due largely to industrial development. With a recent study putting 2050 as the tipping point for Mekong Delta salinity—and the UNDP estimating that by 2100 40% of the Mekong Delta would be submerged and 55% of the local population will be directly affected—it is becoming urgent to accelerate private sector-driven, climate resilient approaches to farming that reward at-risk farmers for transitioning to regenerative agriculture while also supporting climate resilient economic growth.

Conceptually, this is easy to imagine. However, in reality connecting farmers in the Mekong to international markets that sufficiently reward them for more sustainable (aka less carbon intensive) methods is a long way off.

The primary reason is risk. There are few pockets of capital willing to share the risk with both farmers and buyers (while not completely diluting equity value). Most early-stage capital is not patient enough for emerging agriculture markets, which usually take years to develop. In the West, this gap is often filled by government and non-profits. However, in Asia this is rarely the case. Due to the local regulatory environment, the public sector is often hamstrung in its ability to effect change and lacks institutional capacity to facilitate market development.

The second reason is that the true cost of carbon and environmental impact is not priced into large food manufacturers’ and commodity traders’ purchases in the region. While this is true globally, it is particularly true in Asia where the impact of climate change has yet to be priced into local markets, and there is almost no incentive for the middlemen who dominate local markets to provide such information.

Finally and possibly most importantly is logistics. The areas most at risk in the region tend to also be the ones that are most difficult to access. Lack of market access in Asia often goes hand in hand with environmental degradation. Supply chain transparency, if implemented thoughtfully (i.e., with the right regulatory oversite) can drive protection of and re-investment back into the ecosystem. This is particularly true in the Mekong where the lack of cold chain logistics and export hubs means that farmers need to focus on carbon intensive monocrops that can be grown at scale and shipped in bulk with little thought to temperature.

Changing this narrative isn’t hard and won’t necessarily cost a lot of money. However, the environmental cost is going to grow exponentially if it is not addressed soon. Small investments can have meaningful returns in terms of transitioning large swaths of the Mekong towards less carbon intense forms of farming that are more climate resilient.

Food buyers should embrace this opportunity: start identifying local partners who can help map out how the supply chain is impacting the ecosystems clear back to the farmer. Then provide the necessary support via bankable purchasing contracts for regenerative crops. For the Mekong this will require regional buyers (who typically sit in Singapore) to better understand their exposure to the Mekong. Finally, capital markets need to provide farmers with access to low-interest, easily repayable loans to help them transition off carbon intensive farming.

The path towards a carbon negative economy is going to require more than reset on the world’s relationship with fossil fuels. It’s going to require a re-examination of the role of food, and in turn soil and its ability to regenerate biospheres. With the biggest growth in demand for food coming from Asia, starting with at risk areas like the Mekong Delta not only makes sense, but it is also imperative.

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