Delta Institute is creating regional consensus around how to factor Soil Health into the standard farmland appraisal process throughout the Midwest. To help accomplish this goal, we are implementing soil health appraisal pilots in Illinois and Michigan, to help broaden the data, understanding, and practice of successfully factoring in soil health valuation within the farmland appraisal process.
Why Our Work is Needed Today
Farmers and working lands’ owners may build soil health and improve water quality by adopting Soil Health Management Systems (SHMS), such as cover crops and no-till. However, prior stages of work by Delta Institute have shown that despite evidence that suggests improved soil health may create more profitable farming operations, there must be market and financial drivers that promote a marketplace for improved soil health to thus drive both farmer adoption of soil health-focused conservation efforts as well as recognition by the agricultural real estate community that improved soil health has economic value attached to it.
Based on our years of relevant work experience, Delta has determined that addressing and overcoming this “missing market” for soil health within the land valuation and appraisal process is essential to market-driven conservation adoption by farmers throughout the Midwest to improve the quality and wellbeing of our soil and water.
To cultivate this missing market, Delta Institute and our partners will convene key stakeholders across the farmer/landowner, appraiser, and lender sectors in Illinois and throughout the Midwest to identify, develop, and implement market drivers that leverage soil health land appraisal to increase adoption of soil health practices.
Brief Overview of What We’re Doing
Delta Institute is working closely with partners who we have engaged through previous projects and continuing to base our approach on iterative joint development of products and services, which increases the likelihood of broader adoption that results in a new soil health appraisal market—which is our ultimate goal to enact real-world, viable change in the agricultural sector that results in soil- and water- health improvements.
Specifically, Delta and our partners, including Allegan (MI) Conservation District, GreenStone Farm Credit Services, Iroquois Valley Farms, Compeer Financial and the Soil Health Institute, will scale the use of the soil health land appraisal process in IL and MI, pilot soil health appraisals in both States, and engage Great Lakes Basin stakeholders for broader consensus building (and thus, soil health market creation buy-in). In addition to the expansion of the utilization of the soil health land appraisal process, Delta Institute will identify opportunities to create market drivers to promote adoption of soil health practices via financial and economic mechanisms—with the end goal of creating a new, viable soil health market (with appropriate buy-in) within the land appraisal process.
Our Impact
Delta Institute has over a decade of land valuation and agricultural financial instrument creation experience, yet we are excited—and need—to learn how to create a new marketplace that centers soil health, including how best to structure financial products and other market incentives to fund and scale the utilization of soil health practices across the region.
Our programmatic strategies and core work areas to achieve this goal (as described in the prior section) and subsequent outcomes (described in the next section) include:
Soil Health Appraisals in Illinois: Delta will work with the Soil Health Institute and Compeer Financial to conduct soil health appraisals within two new IL MLRAs, serving to diversify our samples, broaden the geography with new local context, scale, and test the rigor of our standard operating procedures for sampling and metric creation. The results of this expansion will be incorporated into the calculations of a “baseline” soil health metric, which will increase the accuracy of the data and further the application of the soil health methodology in appraisals across the state.
Soil Health Appraisals in Michigan: Work with Allegan Conservation District and farmers in one Major Land Resource Area (MLRA) within Allegan County, MI to conduct soil health appraisals on producer-owned parcels that will be appraised through State-specific methodologies while incorporating findings from soil test data and interviews regarding management history. A total of 10 MI farmers will be given free soil health appraisals and soil health reports. The MLRA will be selected based on soil- and topographical characteristics.
Soil Health Datasets based upon our Illinois and Michigan Pilots: Delta will compile soil health appraisal datasets to create a new State-based soil health marketplace. Comprehensive soil health appraisal datasets will be tailored toward appraisal firms and ag lenders.
Training and Capacity Building in the Appraisal Process: Delta Institute will train 50+ appraisers to perform the novel modified appraisal approach, representing a sizable portion of Midwest-based American Society of Farm Managers and Rural Appraisal (ASFMRA) certified appraisal firms.
Why this is important
The focus of this proposed project is innovative by nature—as we are focusing on land value (and related market drivers) to enact positive environmental change, instead of conservation practice payments or other direct incentives to farmers—which tends to be the status quo when enacting conservation drivers in farming operations. Delta has found that market-based economic measures, such as land valuation, has the opportunity to systematize and standardize soil health (with direct impacts on water quality) into a routine transaction that all farmers undergo on a routine basis (having their land appraised to access capital, loans, or to enter the real estate market).
It through this innovative approach that we are creating a driver for farmers to improve soil health leading to more carbon sequestration, reduction of soil loss into waterways, and a significant reduction of nutrients (notably Phosphorus and Nitrogen) entering the Great Lakes Basin through our region’s extensive watershed network. In addition to these benefits, soil health management practices can improve drought resilience, reduce the need for chemical pest mitigation (by promoting local species that decrease invasives and pests), and expand crop disease tolerance—all issues that are increasing due to climate change. Our project is designed for scaling and eventual standardization, so that soil health appraisals are done consistently, reasonably uniformly, and enact water quality improvements and environmental benefits throughout our region.
Our Partners
This exciting scope of work is being supported by the Walton Family Foundation and the McDougal Family Foundation.