Restoration of Degraded Farmland

Land degradation is a global concern with significant environmental and socioeconomic implications. As of 2019, it is reported to occur in over a quarter of the Earth's ice-free land area. This phenomenon has an intricate relationship with climate change, acting as both a consequence and a contributor.

Recognized by multiple United Nations conventions, land degradation is addressed in the Sustainable Development Goals (SDGs). SDG target 15.3 aims to combat desertification, restore degraded land and soil, and promote the concept of land degradation neutrality (LDN), which refers to maintaining or increasing the amount and quality of land resources necessary to support ecosystem function, services, and food security.

Unsustainable agricultural practices are a major contributor to land degradation. There is a growing concern that this degradation will result in declining productivity, posing risks to livelihoods and food security. The global population is projected to reach 9.3 billion by 2050, and to meet the increased demand, food production will need to rise by over 50% over 2010 levels.

Within this context, the restoration of abandoned farmland is a set of practices for transitioning degraded and abandoned land into a productive and carbon-sequestering state. They include regenerative farming methods, agroforestry systems, and pasture restoration for livestock grazing.

Global estimates of abandoned farmland vary among studies, but they indicate a potentially large extent. According to a widely cited study from 2008, worldwide abandoned cropland and pastureland (that have not been converted to forest or urban areas) are estimated to be between 385 – 472 million ha, which accounts for approximately 26% – 31% of global cropland areas (1,500 million ha). Complementing this, Project Drawdown estimates that by 2050, 189.51–296.12 million hectares could be restored and converted to regenerative annual cropping or other productive, carbon-friendly farming systems.

Restoring degraded land has numerous benefits, including improving access to clean water, enhancing food security, providing jobs, reducing carbon emissions, and building more resilient ecosystems and communities (Fig. 1). Additionally, investing in restoration can have economic returns, as more than half of the world's total GDP depends on nature, and every dollar invested in restoration can create up to 30 dollars in economic benefits, while also creating 395 million jobs.

Figure 1: Land restoration pathways to a green recovery

Source: UNCCD (2021)

The investment landscape for restoring degraded farmland is rapidly evolving. This is driven by increased awareness of its potential for climate change mitigation, environmental benefits, and economic returns. Successful programs in Africa, Latin America and Caribbean have demonstrated that restoring degraded farmlands also has various economic impacts. It boosts food production by improving soil health and increasing crop yields. This, in turn, enhances food security and supports agricultural economies. Furthermore, restoration efforts can result in long-term cost savings by preventing further land degradation and associated expenses, such as crop losses and soil erosion control. According to the UNCCD, restoring 150 million hectares of degraded agricultural land could generate USD 85 billion for national and local economies, USD 30–40 billion a year in additional income for smallholder farmers and increased food security for close to 200 million people.

According to Project Drawdown, restoring abandoned farmland could yield a lifetime net profit of US$2.66–4.34 trillion and produce an additional 9.2–15 billion metric tons of food. This estimate is based on an initial investment of US$98.16–159.91 billion and a net operational cost of US$3.24–5.27 trillion.

Examples of initiatives aiming to address restoration of degraded farmland include the Land Degradation Neutrality Fund, established by the UNCCD and Mirova. This impact fund supports achieving land degradation neutrality through sustainable land management and land restoration projects including sustainable agriculture, sustainable livestock management, agroforestry, and sustainable forestry. The fund closed in July 2021 with over USD 200 million in commitments. As of December 2023, Mirova is now seeking to raise USD 380 million for a successor fund, its second strategy dedicated to sustainable land management.

In September 2021, Amazon announced that it was investing in a new initiative – the Agroforestry and Restoration Accelerator – through its USD 100 million Right Now Climate Fund. In partnership with The Nature Conservancy, the Accelerator will assist smallholder farmers restore degraded cattle pastures to native forest and develop income-generating agroforestry systems around cocoa and other crops. Amazon says that it expects its initial investment to support 3,000 farmers and restore approximately 20,000 hectares of forest within three years, with the goal of removing up to 10 million metric tons of carbon dioxide from the atmosphere by 2050.

Syngenta Group, through its Good Growth Plan, plans to invest USD 2 billion into regenerative agriculture by 2025. Investments will be based on the Sustainability Investment Criteria and must demonstrate clear benefits. The company, in collaboration with The Nature Conservancy, is also aiming to restore one million hectares of degraded farmland over the next five years in Brazil.

In August 2023, Brazil's Ministry of Agriculture announced a USD 120 billion program aimed at recovering 40 million hectares of land within ten years. This initiative aims to double Brazil's current food production area, which is currently at 52 million hectares. The program, focused on pasture recovery, has been presented by Brazil's agriculture ministry to government agencies, investment banks, and funds in Japan, South Korea, Saudi Arabia, and the United Arab Emirates.

In recent years, several companies focused on restoration have emerged. One of them is Terraformation, a global forest restoration company that secured a USD 30 million investment in July 2021. Another company is Vibrant Planet, a cloud-based technology platform that enables collaborative forest restoration planning and monitoring. They closed a USD 15 million Series A funding round in October 2023, led by the Ecosystem Integrity Fund and with participation from Microsoft’s Climate Innovation Fund, among others. In September 2020, Dendra, a developer of reforestation technology for global ecosystem restoration, successfully closed a USD 10 million Series A funding round.

Large agribusinesses such as Cargill, JBS, and Marfrig have established funds with the objective of financing the recovery of degraded areas. The Innovative Finance for the Amazon, Cerrado, and Chaco (IFACC) initiative – led by the United Nations Environment Programme, the Nature Conservancy, and the Tropical Forest Alliance – aims to catalyze innovative finance mechanisms (blended vehicles) for expanding soy and cattle production while adhering to deforestation and conversion-free principles. The initiative aims to secure USD 10 billion in commitments and disburse USD 1 billion by 2025, with plans for rapid scaling in the next decade.

In Brazil, Caaporã, a holding company specializing in producing low carbon beef and dairy using the Integrated Crop-Livestock Forestry (ICLF) production strategy, received investments from Fundo Vale in 2020. This investment is part of Vale's 2030 Voluntary Forest Commitment, which aims to restore and protect 500,000 hectares of areas outside the company's sites. The commitment includes conserving 400,000 hectares of forest and restoring 100,000 hectares of degraded areas. In addition to Caaporã, Fundo Vale also invested in Belterra, a B Corp certified company that partners with small and medium-sized farmers to promote agroforestry practices in degraded areas. In 2023, Belterra teamed up with Santander, Gaia, and Conexsus in a joint USD 3,5 million operation that will finance 4,500 producers without access to traditional lines of credit.

Also in Brazil, the Responsible Commodities Facility (RCF) provides financial incentives for soy production on existing cleared and degraded lands. This strategy aims to discourage further agricultural expansion in the Brazilian Cerrado. The RCF launched its first fund, the RCF Cerrado Programme 1, in 2022. It secured USD 11 million from UK retailers Tesco, Sainsbury's, and Waitrose. By 2023, the RCF had grown to USD 47 million, attracting investments from Rabobank, Santander, and Agri3.

Numerous regional and local private credit platforms aimed at small-medium producers offering favorable rates have also begun to emerge in Brazil. Examples include Audsat, Traive, Tabôa, Impact Bank, FinPec, Terramagna and Agrolend. Tying credit to technical assistance could derisk the loan and help farmers apply proceeds more cost-effectively. In addition, corporations can help to mobilize capital by derisking transitional loan underwriting by providing long-term purchasing contracts and payments for ecosystem services.

Payment for Ecosystem Services (PES) and Carbon Credits

Restoration efforts can also have a positive impact on farmers' incomes. This can be achieved through the creation of on-farm employment opportunities or by providing government support, such as subsidies or fiscal transfers like Payment for Ecosystem Services (PES). PES refers to payments made by governments to farmers who adopt sustainable farming practices and protect their land from conversions. These payments serve as compensation for the environmental benefits that farmers generate, such as enhanced biodiversity and soil health. In 2018, there were at least 550 active Payments for Environmental Services (PES) worldwide, with a total value of approximately USD 36 to 42 billion in annual transactions. Brazil is one of the countries with the highest number of PES programs globally.

In addition to the direct financial gains, restored landscapes can also generate income through the sale of carbon credits. Healthy soils and vegetation naturally sequester carbon, and these credits can be sold to companies looking to offset their emissions. This additional revenue stream holds great potential for small and medium-sized farms, as it can significantly impact their overall income. In 2022, the voluntary carbon market (VCM) was valued at USD 1.9 billion, largely due to a 82% increase in the price of VCM credits from 2021. The average price per ton was USD 7.37 in 2022. This growth trajectory is expected to continue, with a McKinsey forecast predicting the VCM to reach USD 50 billion by 2030. Notably, both compliance and voluntary carbon markets are anticipated to play crucial roles in supporting farmland restoration in the coming years.

While forest carbon has traditionally received considerable attention, soil carbon possesses significant potential as well. This potential is supported by the emergence of numerous farming-based (soil) carbon credit platforms like Indigo Ag, Agreena, Soil Capital and Nori. Additionally, forest carbon platforms such as KlimaDao, BRCarbon, Pachama, Moss.Earth and Carbonext are steadily expanding the available options for farmers to participate in carbon credit generation.

Current food production systems heavily rely on the widespread and often indiscriminate use of agrochemicals, such as synthetic fertilizers and pesticides, to maintain and increase productivity. However, this practice disrupts soil microbial communities, compromising fertility and creating a dependency on fertilizer inputs. The loss of soil organic matter reduces its water retention capacity, making it more vulnerable to erosion by wind and water. Ultimately, this leads to soil exhaustion and the abandonment of land.

According to a report by the United Nations Convention to Combat Desertification, an estimated 24 billion tons of soil are lost globally every year due to poor land management practices, as of 2017. As a result, millions of hectares of once natural habitat are degraded. This puts additional pressure on standing forests and natural ecosystems, as the need for new fertile land for agricultural expansion arises.

Regenerative agriculture practices restore and maintain soil fertility, reducing the risk of desertification and land degradation. By eliminating or reducing the use of synthetic chemical inputs, the risk of nutrient run-off and water pollution is decreased, while also supporting pollinator health and biodiversity. Agroforestry systems that incorporate a greater variety of native species can be implemented in degraded pastures or croplands. This approach helps restore deforested and degraded land, preserving native biodiversity and creating corridors for wildlife movement between fragmented ecosystems.

The restoration of degraded farmland can create positive impacts on biodiversity in several ways since this practice has been shown to have a land-sparing effect which could help to preserve biodiversity and essential ecosystem services such as microclimatic, regional climate, hydrological regulation, nutrient cycling and soil health. Finally, restoration efforts can provide critical habitat for a range of species, including pollinators essential for food security, insectivores that contribute to pest control, birds and mammals that play vital roles in ecosystem dynamics, and invertebrates that play key roles in nutrient cycling and decomposition.

Social Justice Impact

Land degradation is both a cause and a result of poverty. More than 1.3 billion people, primarily in developing countries, are trapped on degrading agricultural land. These communities are exposed to climate stress and are therefore excluded from wider infrastructure and economic development. As a result, they are more vulnerable to the negative consequences of land degradation, such as food insecurity, water scarcity, and displacement.

Breaking this cycle requires prioritizing restoration efforts in these communities. Beyond environmental benefits, restoration presents a powerful tool for social justice. Restoration activities can create employment opportunities for local communities, particularly in rural areas with high unemployment rates. This can empower marginalized groups, improve livelihoods, and foster a sense of ownership over the land. Additionally, restored landscapes can enhance agricultural productivity and generate income for small-scale farmers and communities.

Historically, marginalized communities have frequently faced land grabbing and displacement. As a result, restoration efforts can be implemented to empower these communities, allowing them to participate in land management decisions, promoting secure land tenure, and preventing further dispossession. Additionally, revitalized land has the potential to increase agricultural productivity, providing small-scale farmers and communities with a crucial source of income. In addition to immediate financial gains, restored landscapes also offer long-term benefits, such as cleaner air and water due to reduced erosion and pollution, directly contributing to the health and well-being of these vulnerable populations.

There is a strong connection between the restoration of degraded farmland and climate change. The rapid expansion of agriculture, which comes at the expense of grasslands, native forests, and other natural resources, not only leads to the release of carbon stored in native vegetation, but also results in the release of carbon stored in soils. This reduction in soil organic carbon (SOC) has a negative impact on land productivity and carbon sinks. Restoration efforts, such as planting trees and promoting soil health, enhance carbon sequestration by drawing greenhouse gases like carbon dioxide (CO2) from the atmosphere. Additionally, regenerative agricultural practices associated with restoration often promote reduced reliance on synthetic fertilizers, which are energy-intensive to produce and emit significant amounts of nitrous oxide (N2O), a long-lived greenhouse gas with a heating effect 300 times greater than CO2 and which is a significant contributor to ozone layer depletion.

A meta-analysis of the carbon sequestration potential of cover cropping globally estimated a potential rate of 0.12 ± 0.03 GtCO2e yr−1, which could compensate for 8% of the direct annual greenhouse gas emissions from agriculture.

Integrating tree-based agriculture, such as agroforestry, into degraded landscapes also provides a powerful solution for preserving and expanding the environment's ability to act as carbon sinks. Although the capacity for carbon sequestration varies depending on the type of agroforestry system, including its location, local environmental factors (such as climate and soil), and management practices, studies consistently show that tree-based agricultural systems store more carbon than tree-less systems.

Finally, restoring pastures to increase the productivity of beef production systems can have various climate-related consequences, both directly and indirectly. Restored pastures can intensify production by accommodating more animals, reducing the need for additional land and thereby avoiding emissions from deforestation. Furthermore, the restoration process can impact the amount of carbon dioxide removed from the atmosphere by soils.

• IPCC, 2019 - Land degradation
• UNEP, 2023 - Action Plan for the UN Decade on Ecosystem Restoration (2021- 2030)
• Project Drawdown - Abandoned Farmland Restoration