Is This the Crop That Saves Florida Agriculture?

by Tom Schenk

If you’ve driven through central and southern Florida over the last several years, you may have wondered why much of the land that used to grow oranges and grapefruit in central and southern Florida now sits fallow and choked with weeds? Most people are aware of the fatal citrus greening disease that has caused one of the greatest agricultural disasters in US history. Almost every remaining grove in the Sunshine State is infected with this disease as researchers struggle to find a cure with little to show for results.

In 2017, the growers who were still in the game were spending between $1,500-$2,500 per acre in expenses to coax a profitable citrus crop out of their dying groves. These efforts were met with almost ideal growing conditions and by all accounts it appeared that their efforts would be rewarded with one of the best crops they’d seen in years.

Until the arrival of Hurricane Irma which went through Florida like a chainsaw leaving no grove untouched.

Damage reports indicate that half or more of the unripen fruit is now laying on the ground while what remains in the trees is bruised or will eventually drop off in the coming weeks.  And if that wasn’t bad enough, many groves were left standing in water far beyond the critical 72 hours which is almost always fatal for citrus trees.

Directly and indirectly, Florida’s citrus industry creates almost 45,000 jobs which translate to almost a $9 billion contribution into Florida’s economy. Today’s citrus industry has shrunk by well over half from its peak in the late ‘90’s leaving rural towns and communities distressed and struggling to survive as families and individuals move away to find work elsewhere.  There are only 7 remaining processing plants in the state and it is highly questionable how many will remain open and viable when ultimate crop losses may be as high as 80%-90%.  There’s a point where it does not make economic sense to salvage the remaining fruit in a grove or open a processing assembly line for the smallest harvest since the 1940’s. Like any commercial real estate, ag land is generally priced as a function of its income earning value plus any development potential. Citrus grove and that used to be valued at $10,000 – $15,000 or more per acre now sells for less than half to a third of that.

But why can’t some other crop fill this void?  It’s not for lack of trying.

South Florida’s hundreds of thousands of acres of sandy, shallow soils and rainy climate narrow the field of viable crops that can be profitably grown in those conditions.  Afternoon rains continually flush fertilizers and chemicals out of the soils, into the drainage canals, and ultimately Florida’s coastal estuaries and Everglades. In spite of these challenges, many growers and outside investors have ventured into some alternative specialty crops such as peaches, blueberries, tomatoes, and strawberries.  Establishment costs, however, are very high.  In the case of blueberries, it could exceed $15,000 per acre! To make matters worse, growers have found themselves struggling with a diminishing supply of farm labor. And finally, whenever prices spike higher from either early season prices or if there is a production shortfall, floods of cheaper imports arrive in a matter of days from Mexico and South America.

  • So what can work in Florida’s unique agricultural ecosystem?

There is one ray of hope that shows great promise of restoring ag land values and revitalizing business in South Florida’s rural towns.  In 2011, an enterprising group of entrepreneurs from a company called TerViva began approaching some of the state’s largest citrus growers to establish some trial sites with a tropical/subtropical tree crop called pongamia. Pongamia is an oilseed tree that is native to Australia and India.  Conceptually, the crop is like growing soybeans on trees, but at yields 8x-10x over the best Iowa farmland. Pongamia is not new to Florida.  At the turn of the last century, it was introduced as a landscaping ornamental and today a few of these trees can still be found along the turnpike, shopping centers, and in parks in south Florida.

Creating a viable agricultural industry from scratch is not an easy task, but it has been done.  Soybeans were unheard of until they were introduced in the early 1930’s and palm oil trees were developed from the rubber plantations in Southeast Asia after WWII.  Interestingly, products from pongamia are thriving industries in India where the oil is used for industrial applications like fuel, lubricants, paints, surfactants, biopesticidal horticultural sprays, and more.  The “cake” or “meal” that remains after the oil is extracted is coveted as a great fertilizer that releases its nitrogen slowly so a plant can utilize it better. In India it is used to suppress soil-borne pests like nematodes that are the arch enemy of many of our food crops.

So what is the path to prove the viability of a new crop in the US – especially in such a challenging geography as Florida? Below is a checklist of the gauntlet it had to run.

  • Will the tree grow here?

This was the first order of business TerViva set out to prove to growers when they arrived in 2011.  The first grower who would listen to them was Ron Edwards CEO of Vero Beach – based Evans Properties. Edwards, former COO of Tropicana and co-founder of SoBe Beverages and Blue Buffalo Pet Foods, has a track record of spotting a good management team, a good business model, and an idea that had a good shot of succeeding.  Skepticism was high so Terviva offered to split the costs of the first trials.

The result was beyond expectations.  Growers such as Graves Brothers, US Sugar/Southern Gardens, DNE, Alico, Mosaic and others soon followed.  Around the state, the tree grew well in diverse sites with sandy soils, toxic soils, saline soils, and even Mosaic’s challenging clay reclamation soils. In 4 years the trees were 10’ to 16’ in height.

 

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Pongamia orchard in Florida – Photo by TerViva

The trials have shown that these trees survived hurricanes Mathew and Irma, 2 weeks in standing water, frosts, non-irrigated fields, poor soils, higher-salinity irrigation not suited for most other crops, sand, clay, pests, and heat. Indeed, pongamia can deal with Florida’s challenging climate and soils..

  • What are the costs to grow it?

Establishment costs are very similar to citrus.  Indeed, the first thing that growers noticed was that the tree could literally be dropped right into the existing citrus infrastructure. The trees cost about the same as citrus and the planting densities are equal to or slightly less than citrus. Some growers literally planted between the stumps of former orange trees. To date in Florida, no pesticides have been used.  This hardy tree has grown through a laundry list of tropical and subtropical pests that growers spend millions of dollars on to control.  The biggest annual expense is weed maintenance until that young tree can get some height and eventually shade out a lot of the undergrowth which can subsequently be managed with mowing. So annual maintenance costs tally to about $400-$500 per acre – about one third or one fourth of what citrus currently spend.  Some growers used a small amount of fertilizer, and many used none at all.  Pongamia is a legume so it enriches the soil by making its own nitrogen.

  • How is it harvested?

Almost all of the fruit and vegetable crops grown in Florida need manual farm labor and every year that has been more difficult and costly to come by. Conversely, a crew of 2 and a nut tree shaker like those used on pistachios or almonds can harvest a pongamia tree in 3-5 seconds.  Those cost benefits accrue directly to the bottom line.  For the past 2 years as some of the young trees have produced pods early, Terviva has put on grower demos to show how easy and fast the tree can be harvested.

  • Who’s going to process it?

The beauty of the pongamia industry is that everything about it is low-tech. The tree puts out a pod that is easily shelled with a nut sheller and crushed with conventional soybean crushing equipment.  It doesn’t require elaborate $100 million processing plants or exotic enzyme formulations to make it work. The bean inside that pod looks about the size and shape as a lima bean.  It consists of about 40% oil and the 60% balance is the remaining seedcake. In 2017, the forward-thinking Hardee County IDA and its head, Bill Lambert, unanimously voted to build the first pongamia crushing plant in Florida. Because of the elite varieties that Terviva is cultivating at various commercial greenhouses in the state, an acre of their trees is conservatively estimated to yield about 400 gallons of oil and almost 3 tons of seedcake!

  • Who’s going to buy the products?

This is where it gets interesting. There is a long buffet of diverse markets for this oilseed tree crop and therein lies one of its greatest advantages.  These profitable markets range at the low end from a feedstock for industrial oils, to feed, and all the way up to highly-valued biocontrol products for the organic agriculture.  Organic growers have long been familiar with the benefits of pongamia’s oil and meal products under the Indian name karanja.

Like soy, pongamia oil is a long-chain C18:1 compound that can readily be refined into biodiesel or bio-jet A fuel.  Those tests have been tested and validated by Shell, Valero, REG, and ARA Labs. Refiners view a pongamia crop in Florida as a new oilfield that faithfully produces oil every year. Fuel is the base-case end market and can produce fine investment returns.

Classified as a politically correct “non-food” feedstock it can be used to make biodegradable polymers such as fracking fluids, plastics, detergents, paints, and other industrial products.  Secondary compounds found in the oil have documented and long used in India as extraordinarily effective biopesticides as good as or more effective than more commonly known neem products that are widely used by organic farmers, gardeners, and in the fast growing cannabis industry.  Because of the lack of need for inorganic chemicals used in growing pongamia, these high-value end-products are in growing demand by organic feed and growing operations. Sales into these channels alone can double or triple the value of the cake and oil.

The seedcake or meal can be further refined to produce a (30%) high-protein animal feed, or simply be used as an environmentally-friendly, slow-release 4-1-1 fertilizer that plants can better utilize.  Because the backbone of the oil shares similar properties to various food oils, scientists have told Terviva that the secondary compounds could be stripped out to upgrade the oil to “food quality” which could be of great value in parts of the world where pongamia could be grown on a footprint not adaptable to traditional oilseed crops.

  • Bus 101

The arrival of the pongamia farming model into the staggering agricultural void created by the citrus greening disease could be a classic business school case study.  The trail has been blazed.  A deeper dive into this business model reveals some very unique attributes.  The trees high yields offer an extraordinary margin for error in any given crop year.  For many alternative oilseed row crops planted elsewhere in the US (often as a new rotational crop), the entire growing season can tolerate few hiccups or else the yields will have a difficult time justifying the risks of planting and new machinery investments.  Pongamia’s low annual maintenance costs also allow a lot of margin for adverse weather surprises.  Pongamia’s diverse downstream markets mitigate marketing risks.  Low-tech processing that can create products from fuel and feed to fertilizer and biocontrol horticultural sprays can allow plenty of flexibility to target up-cycling markets and reduce dependency on single consumer markets.  And depending on those markets, Terviva estimates that at maturity, the groves could generate a net income between $700- $1,500 per acre.

What would the ideal replacement crop look like if it showed up at growers’ doorstep? Probably something like pongamia.

Market Driven Restoration: Stepping Beyond Sustainability

by Drew Wilkinson, TerViva Propagation Associate

As a farmer, I’m naturally drawn to the diverse array of agriculture solutions that hold potential for making significant strides towards a carbon neutral future. While combing through the spring 2017 issue of Permaculture North America Magazine, I came across an interview that ignited my attention. It was on David Karr, the co-founder of Guayaki Yerba Mate, and featured a unique business model I knew little about, but came to greatly admire. It is called market driven restoration. Karr explains one of their main missions is to “steward and restore 200,000 acres of South American Atlantic Rainforest and create over 1,000 living wage jobs by 2020.”

With their roots planted deep in the soil, I was excited to learn about this company striving to go beyond sustainability. The more I read, the more I reflected on the intricate relationships between consumers, businesses, agroforestry, community, environment, and the resulting impacts on global climate change.

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Rainforest in Paraguay – Photo Credit: Cyrus Sutton

Guayaki specializes in fair trade organically grown yerba mate, an herbal tea made from the leaves and stems of the holly tree, Ilex paraguariensis found in the South American Atlantic Rainforest. Yerba mate has been a long standing cultural drink in Argentina, Brazil, and Paraguay. It’s a healthy alternative to coffee and according to the Guayaki website it includes 24 vitamins and minerals, 15 amino acids, a surplus of antioxidants, and naturally occurring caffeine all which provide a smooth energetic lift. Guayaki sells a variety of yerba mate products ranging from canned drinks to loose leaf.

There are many sustainable components of Guayaki’s business model that set them apart from the crowd. They have a very thought out supply chain that incorporates biodiesel powered cargo vehicles, biodegradable packaging, and chemical free facilities to name a few. They are a certified B Corp, which is a rigorous certification process completed by B Lab, a non-profit that verifies companies meet standards of social and environmental performance, accountability, and transparency. The most impactful part of Guayaki’s supply chain lies within their approach to producing forest grown yerba mate and their ability to sequester 573g of carbon for every 454g of yerba mate produced.

According to Project Drawdown, which describes the top 100 ways to reverse global climate change, Paul Hawken and his team of international scientists and policy makers have ranked the reforestation and preservation of tropical forests as #5 on the list of 100 solutions. Guayaki has incorporated reforestation as a standard for cultivation of yerba mate. The highest quality yerba mate grows beneath the shade canopy of taller hardwoods. As Guayaki expands their agriculture production, they are replanting hardwood trees along with fruit trees to create the perfect environment to grow yerba mate, all the while restoring biodiversity.

A sustainable hand harvesting approach is used to collect yerba mate. Yerba mate produces more income per acre than cattle or agricultural products such as corn, soy, or wheat. Guayaki is able to provide a stable annual living wage for these small farmers, which allows them the ability to plan and make long term decisions about the health of the land and their people, while adding a “market driven” incentive to restore and protect the forest.

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Hand harvested yerba mate – Photo courtesy of Guayaki

Guayaki achieves this by building relationships and working with native forest communities. They help construct tree nurseries, organize grower conferences, and provide safe and just working conditions. The revenue generated from selling yerba mate in North America cycles back to these indigenous communities and helps fund the rainforest restoration. This steers the local economy in a regenerative ideology away from the clear cutting mentality for lumber, cattle grazing, and monocrop agriculture that has eradicated 90% of the South Atlantic Rainforest.

Project Drawdown summarizes that when these tropical forests are restored, “trees, soil, leaf litter, and other vegetation absorb and hold carbon. As flora and fauna return and interactions between organisms and species revive, the forest regains its multidimensional roles: supporting the water cycle, conserving soil, protecting habitat and pollinators, providing food, medicine, and fiber, and giving people places to live, adventure, and worship.”

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Indigeneous workers – Photo courtesy of Guayaki

At the heart of Guayaki’s business model is the principle of internalizing all the true costs. This goes outside the norm of traditional business structures with a narrow minded focus on profit. As companies strive to maximize profits, negative externalities result and are pushed to the side or slid under the rug and out of view from the public eye. As a result, companies end up not paying the full cost of extraction of materials, production, distribution, and disposal. These costs are often felt negatively by 3rd parties in the form of land degradation, excess carbon emissions, toxic waste, and polluted waterways.

Karr summarizes that this ‘short term thinking’ paradigm shifts the true costs of conventional business to future generations. Guayaki’s market driven restoration model serves as an exemplary platform for other companies to strive for. Karr states “We’re passionate about people voting with their dollars. We believe business can drive environmental and social change.”

So, where do we go from here? I encourage you to think about your next purchase as a consumer. Try to incorporate a broader whole systems thinking approach to the product you are purchasing. Instead of just laser beaming your focus on what the product will do for you and the associated lowest price mentality, think about the external costs that may or may not be reflected in the price tag.

While the effects of global climate change are felt across the world, environmentally conscious consumers can help shape more eco-minded businesses, and together we have the potential to play a huge role in shaping a carbon neutral future.

More references:

https://www.nielsen.com/content/dam/nielsenglobal/dk/docs/global-sustainability-report-oct-2015.pdf

https://www.bcorporation.net/what-are-b-corps?gclid=EAIaIQobChMItqbwlaiO1wIVSGV-Ch1Dpwt2EAAYASAAEgL9afD_BwE

From Inside the Pipeline: Energy & Ag in Hawaii

By Marie O’Grady, Elemental Excelerator Communications Coordinator

Exhaust poured from the truck as it came to a grinding halt at the base of a conveyor belt, delivering Hawaiian Commercial & Sugar Company’s last cane harvest, symbolizing the end of an era in Hawaii. As happened in Puerto Rico and Trinidad & Tobago, growing sugar in Hawaii was no longer profitable.

In early 2016, Alexander & Baldwin (A&B), the fourth largest land owner in Hawaii, announced the close of Hawaiian Commercial & Sugar Company (HC&S), the state’s last large-scale sugar plantation. Over the years, HC&S had faced controversies around water, pesticides, and field burning, and in 2015, the company incurred a $30 million operating loss.

Alexander & Baldwin announced in early 2016 that all 36,000 acres of former HC&S land would be transitioned to diversified agriculture, such as energy crops, agroforestry, livestock, diversified food crops, and orchard crops. Last month, A&B announced a new partnership with TerViva to cultivate pongamia on 250 acres of former plantation land.

EEx TerViva - orchard - 1

We believe pongamia can help diversify agriculture production on Maui while also potentially addressing our community’s need for renewable fuels. Our former sugar lands provide a great opportunity to grow more energy crops locally as they are ideally suited for large scale cultivation and mechanical harvesting.” – A&B President & CEO, Chris Benjamin

TerViva was the first ag company to join Elemental Excelerator’s portfolio in 2014. As part of their demonstration project, they are growing more than 200 acres of pongamia trees on Oahu and Maui. The oil extracted from pongamia seeds is well suited for industrial applications such as biopesticides, lubricants, chemicals, and fuels – and the residual seed cake shows promise as a feed supplement for beef cattle. Compared to soy, pongamia requires only 25 percent of the chemical and water inputs. One acre of pongamia produces 10 times more oil and 3 times more protein rich seed cake than one acre of soybeans.

EEx TerViva 3

This project is not only transformational for TerViva (it’s their first orchard in the region), but it’s also transformational for Hawaii.

  • Local farmers and agribusinesses are a critical source of economic stability for rural economies, through jobs and direct and indirect spending. TerViva is steadily growing its Hawaii-based team, and the company supports two local nurseries and a handful of contractors.
  • Pongamia is able to grow on marginal agricultural land that is not suitable for other crops. This is ideal for a place like Hawaii where the soil, which once provided resources for thousands of acres of sugarcane and pineapple, has been largely stripped of key nutrients.
  • Biofuel and biomass play a role in Hawaii’s transformation to clean energy, providing firm, dispatchable power. Hawaiian Electric’s December 2016 Power Supply Improvement Plan outlines how the utility plans to utilize biofuels in power plants to replace oil as a fuel source.

There is a growing trend in the number of new agtech companies mature enough for a demonstration project, as evidenced in Elemental Excelerator’s pipeline of applicants:

  • Since 2014, EEx had added four other agriculture startups to the portfolio of 53 startups. These companies are working to increase local beef production, increase crop yields, and help small farmers use data to reduce water usage.
  • Over the last few years, EEx has also seen a dramatic increase in applications from ag startups. This year, 10 percent of the companies who took the first step to apply were agriculture-related. That’s twice as many as last year!

After Monsanto acquired the Climate Corporation in 2013, ag tech gained significant attention. In 2014 alone, investments in ag tech grew 170%. Most innovation was focused in the areas of biotechnology and seed genetics. Today, subsectors include bioenergy, sustainable protein, decision support tech, soil & crop tech, advanced imaging & data analytics, and many others. Investment and innovation are no longer limited to players in the agriculture sector. Moreover, as concern grows over droughts, weather fluctuations, the cost of farm labor, and competition with international markets, key players such as farmers, agro-businesses, and landowners are searching for ways to grow smarter.

 

Elemental Excelerator

Elemental Excelerator helps startups change the world, one community at a time. Each year, they find 12-15 companies that best fit their mission and fund each company up to $1 million to improve systems that impact peoples lives: energy, water, agriculture, and transportation. To date, Elemental Excelerator (EEx) has awarded over $20 million to more than 50 companies. What makes EEx unique? They co-fund, co-design, and co-develop projects and strategies that improve infrastructure and sustainably enhance communities. The program is funded by a diverse coalition of utility partners, corporate partners, the U.S. Navy, the U.S. Department of Energy, state government, and philanthropic organizations, and is structured as a non-profit created in collaboration with Emerson Collective.

 

Related articles:

2015 State Ag Land Use Baseline Data, Hawaii Department of Agriculture

AgTech Is The New Queen Of Green, TechCrunch

Cultivating Ag Tech: 5 Trends Shaping The Future of Agriculture, CB Insights

Hawaii’s Last Sugar Plantation Finishes Its Final Harvest, NBC

Land Sharing vs. Land Sparing: Can We Maximize Yield and Biodiversity?

By Nathan Chan, TerViva Germplasm Development Associate

We often think of the environmental impacts of agriculture being limited to things like pesticides and nutrient runoff polluting waterways (see my colleague’s post for more on this), and methane emissions from livestock contributing to climate change, but one of agriculture’s biggest impacts has been its role as a leading cause in declines in wildlife and natural habitat. That may not resonate with those of us in Europe and the United States, where we’ve had a fairly mature agricultural industry for the past 100+ years (I challenge you to imagine what the West may have looked like before humans), but deforestation to create lands suitable for agriculture in South America and Southeast Asia is directly responsible for the loss of hundreds of thousands of hectares of habitat for thousands of species. This is not a sustainable approach moving forward as we aim to feed 9 billion people worldwide while working to maintain our remaining biodiversity.

Clear cutting and burning rainforests is common in the tropics to create more land for agriculture.

A popular framework for finding a sustainable solution gives us two strategies: “land sharing” and “land sparing”. In land sharing, lower intensity agriculture is practiced in favor of less productive methods that promote more suitable conditions for wildlife resulting in less food produced per acre. In land sparing, farmers practice high intensity agriculture to boost yields, enabling them to forego expansion and leave natural areas “wild”. There are tradeoffs with both approaches — organic “land sharing” farms have on average 30% higher species richness and 50% higher abundance than conventional “land sparing” farms, but produce 20-25% less yield per acre.

In an article examining the tradeoffs of food production and wildlife published by The Breakthrough Institute, Linus Blomqvist puts forward the idea that higher yields, especially in the row crops that use the most land globally, will always result in lower on-farm biodiversity because there are “simple biophysical components of yield growth that there is not much of a way around.” The highly specific management practices farmers must use to get maximum yields from a specific crop preclude the establishment of other plants, which form the basis of a habitat that can sustain wildlife. As evidence, Blomqvist cites declines in farmland bird populations in Europe and America being driven by the loss of habitat and nesting sites in high-intensity agriculture settings – not due to direct mortality from pesticides.

An example of a “land sparing” farm — diverse set of crops, surrounded by potential wildlife habitat.

Even in the most organic, ecologically friendly, “land sharing” farm one can imagine, any decision to increase yields would result in higher-intensity practices that would in turn decrease the farm’s ability to support wildlife. If higher yields per acre on an organic farm decrease on-farm habitat quality, than the only way to increase yield while maintaining habitat quality is to use more land. In the West, more land probably means acquiring farmland or uncultivated land from a neighbor.  However, in South America, Asia, or Africa expanding croplands often takes place at the expense of natural habitats like forests. Any gains in on-farm biodiversity may be offset entirely by the loss of natural habitats.

Multiple combines and tractors with grain carts harvested a large field of corn outside New Haven, Ky.

As we try to feed a human population of 9 billion-plus people, agricultural land will expand and will undoubtedly come at the expense of wildlife and natural habitats. The question we face is how to minimize that impact. Land sharing and land sparing underscore the idea that there is a tradeoff between food production and biodiversity: increasing one will invariably decrease the other. Fortunately, there are ways in which we can try to mitigate that trade off. Embracing GM technologies like Bt enables crops to produce their own insecticide (that is safe for human consumption) and reduce the need for spraying pesticides allowing non-target species to thrive. Incorporating staples of organic or agroecological farming like crop rotations and cover crops make it difficult for a single pest species to persist from year to year further reducing pesticide loads.

There is no correct answer to the land sharing vs. land sparing debate. Both ideas have their merits and embracing one or the other is better than nothing. The growth of the global human population will continue and it will be at the expense of the natural world, but through the discussion and implementation of ideas like land sparing and land sharing, and the incorporation of new crop technologies and agronomic practices we can hopefully reduce that negative impact.

Author’s Note: The idea behind this blogpost came largely from the previously mentioned article published by The Breakthrough Institute, Food Production and Wildlife on Farmland. I encourage you to read it if you are interested in this topic.