Supply Chain

Disruptive Conservation:
A New Thread to Connect Multi-Sector Values

A Minnesota watershed project is using an ecocommerce framework, a fundamentally different approach to bringing shared value to natural resource management.

By Tim Gieseke | Published 10 years ago | About a 4 minute read

A Minnesota watershed project is using an ecocommerce framework, a fundamentally different approach to bringing shared value to natural resource management.

Since the 1930s, the USDA has relied on a “conservation delivery system” (CDS) that provides technical and financial support to implement on-farm conservation practices. Essentially, the CDS uses congressional allocations and a federal-state-local partnership to determine which practices should be installed on which farms. With two million farms in the U.S., it is a complex and cumbersome winnowing process to assess farms and target funds. It is this inefficient process and embedded mindset that prevents collaboration among government entities, NGO and corporations to express shared value.

Conversely, the Sunrise Watershed ecocommerce model uses an index-based Farm Environmental Asset Portfolio to account for off-farm environmental impacts to meet state water quality goals. The portfolio consists of USDA, university and industry-developed indices such as water quality, soil condition, habitat and others related to nutrients and then scaled from 0-100.

This is a key divergence from the traditional USDA CDS, which valued the costs and processes of implementing conservation practices rather than the quality of outcomes. The traditional approach was sufficient when farmers only wanted to address on-farm resource issues, but it is not sufficient today as government, NGOs and corporations are more interested in off-farm environmental impacts.

This divergence is described as disruptive conservation — a market force that occurs due to the introduction of a new process, technology and/or product that appeals to a new customer base enabling them to approach an issue with a different set of values and strategies — a term borrowed from The Innovator’s Dilemma.

In the Sunrise case, the new product is the farm portfolio and the new customer is the state of Minnesota. This illustrates the potential of disruptive conservation: Where the farmers were once the [conservation practice] customer of the USDA CDS, now the government, NGOs and corporations can become the farmers’ [environmental asset] customers.

In disruptive innovation, a realignment of activities and relationships among the stakeholders occurs causing some corporations to flourish and others to fail. In the shared value approach of the Sunrise project, the government, NGO and corporate stakeholders remain viable components.

The Sunrise project taps into the existing knowledge of local agronomists to assess farms and develop portfolios. This realignment decouples the on-farm assessment process from government programs causing management to shift from a program-driven to a more resource-driven process — a recommendation of National Association of State Conservation Agencies in a 2007 report, Evaluation of the Nation’s Conservation Delivery System.

The strategy of using agricultural professionals also complements the findings of a 2013 survey sponsored by the National Council of Farmer Cooperatives, the Agricultural Retailers Association, the National Association of Conservation Districts, the American Society of Agronomy and the Fertilizer Institute. The survey found few relationships between agricultural retailers and conservation district staff, but the need for them to interact was great, as the skills of the groups are complementary and there is a common interest in environmental improvement. The culmination of these groups contains an estimated 80 percent of the data needed to substantiate sustainability claims.

When combined in farm portfolios, this data creates landscape intelligence; a higher level of data generated by aggregating acre-based index scores for a particular area. For the state of Minnesota, the landscape intelligence is defined by the watershed and the water quality index. As corporate and NGO sustainability efforts mature, they too will need landscape intelligence on which to base their sustainability claims. No other resource management system has the capacity to generate this new set of data that is compatible with each sector.

This ecocommerce model has two rather profound outcomes; 1) upfront transaction costs associated with data collection, adaptive management and assurance are greatly reduced, and 2) procurement costs of the sustainability data are shared, reducing those costs among the entities within each sector. This second outcome is described as “symbiotic demand” in that, as the number of demanders increases for a particular sustainability value, the costs for each is reduced. This is possible due to the uniqueness of natural capital and the use the metrics to describe multiple outcomes from a singular unit of land.

Because of these two aspects, disruptive conservation is not disruptive for farmers, their advisers and local government staff. These front-line conservationists in the Sunrise project intuitively understand the adaptive management process when sustainability metrics are described and valued. These production and natural resource asset portfolios provide farmers with a common process to develop multiple outcomes for their business and the landscape. It provides them the means to adapt to society’s evolving environmental demands in a similar manner they adapt to market demands; with the freedom to achieve these outcomes in a manner that best suits them.

Disruptive conservation occurs when the dots of land management data, professional advisers, metrics, spatially based farm portfolios, symbiotic demand and shared value are connected.