Could this be an answer to Big Food? by Mark Koba @FortuneMagazine February 23, 2015, 6:13 AM EST E-mail Tweet Facebook Google Plus Linkedin Share icons In 2013, Pam and Glenn Halloway gave up their day jobs in Washington D.C. and used their retirement funds to become co-owners of Tourmaline Farms in Deary, Idaho. “Both of us come from farm backgrounds,” says Pam Halloway, 44, a former Army nurse and medical contract manager for a private firm. Glenn, 66, was a chief of local infrastructure for the Department of Homeland Security. “We’re after optimizing the health of every organism in the system, especially the health of our soil,” says Pam, who with Glenn now helps manage 1,280 acres of sustainable dairy farm land that also produces beef and chicken. The Halloways are part of a movement called regenerative agriculture. Based on organic farming principles, the idea is to build soil health and regenerate it for continued use while cutting down on the amount of greenhouse gas used in farming. That’s done by avoiding synthetic pesticides and fertilizers and other chemical hazards that disrupt soil life and cause soil erosion. Regenerative farming is not new. It dates back thousands of years. However, it gained traction as a wave of the future through the efforts of the Rodale Institute, a major proponent of the practice. And it differs in a big way from common industrialized farming methods used by food producing firms like ConAgra or Tyson, argues Mark Spitznagel, chief investment officer of Universa Investments and owner of the organic-based Idyll Farms in Northport, Mich. “Industrialized farming is about mining immediate productivity from the soil at the expense of future productivity,” Spitznagel argues. But can this type of farming feed a hungry world? Some experts doubt it. “There’s some validity to critics who say enough food can’t be grown by this type of farming,” says Mark Reiger, dean of agriculture at the University of Delaware. “In theory, you would need much more land to produce food this way.” Organic Farming Boom The hunger for organic food in the U.S. is reaching record numbers. According to the most recent figures from the Organic Trade Association, sales of organic products in the United States jumped to $35.1 billion in 2013, up 11.5 percent from the previous year’s $31.5 billion — the fastest growth rate in five years. Organic fruits and vegetables continues to lead the sector with $11.6 billion in sales, up 15% from 2012, while the relatively small organic condiments category posted the strongest growth, at 17%, to reach sales of $830 million. There are 18,513 certified organic farms and businesses in the U.S., according to the USDA. This represents a 245% increase since 2002. “The demand for organic products over heavily refined and packaged food is greater today than when we started more than 40 years ago,” says Dale Woodbeck, general manager of Lakewinds Food Co-op in Richfield, Minn. “Consumers are willing to put their money where their values are and support farms that reduce or eliminate the need for chemical inputs on the land,” says Woodbeck, who said Lakewinds’ revenues are $43 million a year with some 350 employees. But not all regenerative farmers are organic. “We do use GMOs (genetically modified organisms), so we’re not organic,” says Jay Hill, who helps run the nearly 700 acres of Hill Farms in Mesilla Park, N.M. Still, Hill sees the benefits of soil conservation. “We are trying to lessen our environmental imprint and do more conservation of the land by avoiding pesticides in the soil,” says Hill, who also raises small herds of cattle along with his main crop of alfalfa. Costly Venture It’s not easy being a farmer — and embracing organic/regenerative agriculture can be costly and time-consuming. “We’re making a living to sustain ourselves but it’s difficult,” says Hill, who sells much of his produce to local vendors. While there’s no certification of any kind for regeneration methods, it’s tougher for organic growers. To be organic, a farm must be certified by the U.S. Department of Agriculture. That means the USDA verifies that irradiation, sewage sludge, synthetic fertilizers, prohibited pesticides, and genetically modified organisms were not used on the land for three years in a row. For organic livestock, the USDA must verify that producers met animal health and welfare standards, did not use antibiotics or growth hormones, used 100% organic feed and provided animals with access to the outdoors. And to stay organic, farmers have to write down everything they did on a daily basis to keep within the guidelines, says University of Delaware’s Reiger. “A lot of people who were into organic farming have given up just because it can be difficult keeping tabs on what you do,” Reiger says. “Plus, during the three years of making sure the land is certifiable, you can’t sell your products as organic, even though that’s what you’re aiming for,” he says. There are also the costs to consumers. Families who include organic products on their grocery list on a regular basis spend an average of $125 a week at the grocery store, compared to $110 a week for those not buying any organic items. But that kind of calculation misses the bigger picture, says Pam Halloway. “There are costs from industrialized food like cancer and diabetes that make it more expensive,” she says. And being a good steward of the soil has its economic benefits, according to supporters. A study from as far back as 1997 by the pro-conservation group ecoagriculture.org, said 80% of livestock ranchers polled had an increase in profits from using regenerative agriculture methods over not using them. “Regenerative models require a higher level of management intensity than mainstream models, but they provide much greater production efficiencies,” says John Kempf, founder and CEO of Advancing Eco Agriculture (AEA), a leading crop nutrition consulting company. Future of Regenerative Farming It is estimated that since 1960, one-third of the world’s arable land has been lost through erosion and other degradation. And that’s a huge reason for regenerative agriculture, says Idyll Farms’ Spitznagel. “We need to regenerate our soil, whether we accept that now or by necessity later,” he argues. But the while the practice does have its advocates, they admit it won’t or doesn’t have to replace industrialized farming. “There’s space for both models,” says Pam Halloway.