ORICoop has been in deep conversations with our members, producers, supply chain businesses and investors that are interested in a more sustainable and resilient food and farming system. We are keen to share our learnings – and to ask the question of the future of our food and financial systems. And what is the true colour of money?
Right now – Farmers around the country are innovating and transitioning quickly. Quicker in fact than Governments and Industry bodies realise. They are pressured by commodity prices, by wars overseas, by severe climatic events and rising interest rates. Yet with the current rising inflation – producers are not being paid much more than they were 5 years ago. Despite their costs increasing just like everyone else’s. Perhaps this is our new normal as outlined by The Guardian recently.
The elephant in the room is the consumer. The end buyer. The supermarkets. What people are willing to pay for healthy, local nutritious food. And has this split changed over the past 50 years – with regard to our lifestyles, work-life balance, debt and the priority of food over housing or other lifestyle choices. The deeper realisation of the value of health and how nutrient dense food affects the cost of maintaining good health.
What does this mean for farmers? This means that many producers (dairy and grain growers are good examples) are being asked to grow more volume per hectare of land than ever before. To the detriment of the nutrient density of the food and the land that it’s grown on. With the ambition to increase our agricultural production to over $100B from the National Farmers Federation. On land that is more expensive than ever in history with input and labour costs also at an all time high. And yet – the end price producers are receiving at the farm-gate is not that different to 10 years ago. In no way increasing comparative to the increased costs of food provided to consumers at the supermarket. Or linked to the highly profitable returns of the major supermarkets. The system is broken.
“The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways.” John F Kennedy
So, how do we change this paradigm? Global Domestic Product measures the increase of our economy, yet does it attribute the true cost of this economic measure. Or considering the profitability and productivity opportunity across Agriculture – if we measured this ‘true cost’ paradigm differently. With increased labour costs, some of the highest in the world. How can Australia sustainably grow food comparative to many other countries. Yes with some of the largest swathes of land in the world. Noting New Zealand has a subsidised Pacific Island labour program. Europe has a heavily subsidised agriculture sector. And the US has strong support for commodity based agricultural production systems. Is Australia being left behind? Should we have an incentivised land stewardship package? Or is there a risk we will be priced out of the market? Or have we not demonstrated our clean and green image well enough to the rest of the world? Should we be more focussed on feeding our population before selling into these larger world commodity markets that may actually be part of the overall problem.
ORICoop with our ORCA ‘Farmers Own’ brand is on a bold mission. To provide bulk organic products that streamlines a more efficient organic supply chain. That provides healthier food economically to more people. And ensures that producers are sustainably growing what the market is demanding. Keeping the supply chain efficient, nimble and ensuring that the grower and end buyer understand the different parameters of a complex supply chain.
We are determined to build a stronger domestic organic market. So food travels less distance to more people, is more affordable and has a stronger provenance story. It can be healthier, grown and transported with less of a carbon footprint and more of a conscious understanding of how it was grown. Organic products have market fluctuations based on seasons, based on the capacity to plant or harvest crops. It takes innovative producers to manage significantly different years – from 2019 (severe drought) to the last two years of abundant rainfall and flooding in some regions. What producers need is markets that work with their capacity to grow and innovate. And to ensure that products grown have the best opportunity into the market – not just the perfect looking apples, or premium 14% protein grains or only Autumn flush dairy milk. We must get better at growing, manufacturing and utilising food in a truly sustainable way that ensures we are efficient, less wasteful and understand the planetary boundaries of truly sustainable agriculture.
What does this have to do with the Colour of Money? For many years investors have invested into Agriculture as a straight property investment. Not to underwrite our food security or support transition to better land stewardship practices. What if we used ‘true cost accounting’ to reflect the invisible cost to consumers of ameliorating the cost of the externalities of the industrial food production system? To reconsider the lucrative returns of 12-14% year on year. With the plan to exit after 7-9 years with a real estate property acquisition that includes significant capital growth. They call it ‘ethical impact’. The reality is, most agricultural investments provide a low (3-5%) cash return on investment (ROI) annually with a higher proportion allocated to capital growth – in the range of 5 – 8% annually. But is this model truly sustainable? For our population? Or for the planet?
To underwrite our food security we need to measure capital differently. One that views food security and land stewardship as critical to our very survival. Economically but also metaphorically. Did you know that producers pay a higher rate of interest on farmland (property) than standard interest rates? Even though land is property with property security? The front porch is not very palatable when you’re wanting something to eat, it is a question of priority? Why are producers left to fend for themselves when markets fluctuate and do not always reflect the true cost of food production. If true cost accounting was used in real terms farmers would be considered to be slaves, when considering their net profit (outside of a real estate gain), comparative to other lucrative and increasing wage levels across essential industries. Walden Mutual in the US is a leading example of how investment can be done differently. We need models like this in Australia, urgently.
To change this paradigm, investors must passionately support a fairer food and farm transition with a deeper lense, beyond just a philosophical idea. Investors that are patient and driven by ethical, sustainable and reasonable returns that considers farmers, and the health of the land and the food we eat. Investors that are looking for a co-beneficial relationship that revolutionises food and farm systems in a sustainable and earth centric manner. To invest into food systems that are innovative, multi-layered, diverse and resilient for food, farming and community benefit. Food systems that have short supply chains and are not commoditised for the benefit of the large agri-business sector – but are driven by the needs of our communities. First and foremost.
The ORCA investment Phase 2 is opening for investment shortly. This is an exciting step for ORICoop. It provides opportunity for larger investors to participate in supporting infrastructure investment into localised organic supply chains – infrastructure that enables grain to be processed within shorter distances. Including grain that is grown in a more regenerative and sustainable manner – that includes cover crops, legumes and specialty grains (lupins a prime example). Rather than a commoditised wheat, oat and barley focus that depletes the carbon and nutrient bank in the soil if not managed well, and is significantly affected by world markets. This limits the growth of the organic sector that has much capacity to flourish and expand into these premium niche markets. Australia has more than 55M hectares of farmland that is certified organic farmland. That is more than half the world’s total certified land area. From that land our organic sector is worth more than $3.6B (according to the Australian Organic Market Report), noting the US market has just exceeded US$60 Billion for the first time in history (from less land area). The Australian market is growing at 12-14% annually. What if this increased to $5B annually, or by 20% year on year these dividends were reinvested to improve on-farm knowledge, supply chain knowledge and efficiency with strategic market development? Whilst addressing climate change mitigation, adaption and addressing biodiversity loss as additional dividends. Australia can be a leader in supplying Asian markets and the Middle East for quality organic food and fibre. While looking after our land and our regional communities.
What the food and agriculture sectors need is a new Colour of Capital. One that is driven by urgency, yet patient and compassionate to the seasonality of agriculture and food systems in a changing climate. That understands we are all in this together. Australia must get better at growing and processing local food at scale. Like our forefathers and mothers did. To rebuild and scale efficient and local processing capacity, and to re-energise food production that enhances regions for their climatic and farming strength. And to build and value community driven food systems for the better. To have an innovative investment capacity that exemplifies our strength of markets, our capacity to grow large volumes of product in a sustainable manner, our seasonal diversity and access to land.
The world needs a different Colour of Capital that builds long term impact for the better. If you are interested in finding out more you can complete the EOI here.
Written by Carolyn Suggate,
Executive Director of ORICoop
E – Carolyn’s email
** Photo Credit – David McFall
The little known lupin is likely the most powerful superfood you’ve never heard of. While lupins have been used as a food for as much as 6000 years in the Andean highlands and over 3000 years around the Mediterranean, they are slowly making their way onto supermarket shelves in Australia and around the globe. Meanwhile, farmers are recognising their multiple advantages in both sustainable cropping systems and as a high-protein addition to animal feed.
With over 200 species, lupins are grown in a wide array of regions across the globe, ranging from the Mediterranean to the southwestern United States, northern Mexico to both eastern and western parts of Australia. Two varieties of lupin are most commonly grown in Australia, with the majority of lupin production occurring in the winter/spring rain-fed parts of southwestern Western Australia. Australia produces about 730,000 metric tonnes of lupins per year, the equivalent of approximately 80–85% of the world’s lupin production. About 30% are used domestically within Australia, while approximately 70% are exported to Asia, North Africa and the Middle East for animal feed. As a high-protein grain, lupins are most commonly grown and harvested for human and animal consumption, yet they also hold many advantages in both cropping and mixed cropping–livestock farming systems.
Farmers can enrich their soil naturally by planting an annual that produces a kaleidoscope of pea-like flowers with bold spikes of vibrant purples, pinks and blues, rich reds and yellows, or crisp, clean whites, attracting a range of pollinators including bees and butterflies. In regenerative cropping systems, lupins produce a significant nitrogen contribution for subsequent crops in soils. They provide a disease break for cereal crops and can help control grass weeds within well planned cropping sequences. With taproots that stretch deep into the earth, lupins are drought-tolerant and also help break up compacted soil. When lupin plants die back, the taproots slowly break down, increasing the organic content in the soil, helping the soil retain water. These combined benefits can increase the yields of cereals following lupin crop rotation, particularly when grown in sandy soils.
The nutrient content of lupin grain, in protein, amino acid, energy and mineral levels makes it both a nutritional and economical addition to stock feed formulations. Among the various grain legumes used in stock feed, lupins can be used as an alternative to soybeans and are highly regarded as feed for poultry, pigs, ruminants, and fish. Research has shown that replacing soybean meal with lupin meal as an alternative poultry protein feed source reduces cost of production and improves poultry egg productivity. In other studies, using lupin grain in feed rations has been shown to increase the milk production of beef and dairy cattle. It can be more valuable to include in the diet than cereal grain because it tends to not lower the fat content of milk (as high levels of cereal grains may do). Researchers have also investigated the potential for lupin grain to be used as a plant based feed source in aquaculture operations and found that lupin was particularly useful for fish diets because of the highly digestible level of protein, good levels of digestible energy and highly digestible phosphorus.
While the crop is grown mostly to produce stock feed, there is a small, but growing market for lupin grain for human consumption. Lupins are slowly growing in popularity among consumers due to their many health benefits: protein-rich, highly nutritious, sustainable, and versatile, lupins are a powerhouse of goodness. They are one of the richest sources of plant protein and fibre (at least twice as much as other legumes) and packed full of nutrients and antioxidants including thiamine, riboflavin, vitamin C, calcium, potassium, phosphorus, magnesium, iron and zinc. Eating lupin beans has been linked to lowering blood pressure, improving blood lipids and insulin sensitivity and favourably altering the gut microbiome in studies. The Australian food industry is beginning to recognise the value of lupin and a range of lupin products are now available, including whole lupin flakes, flour, crumb, semolina, or enriched food products such as pasta, cereal and cookie mix.
ORICoop has been working with key organic growers in Western Australia and the Riverina – to expand and diversify their crop selections to include lupins. This provides producers a unique and valuable intercrop option – and enables a strong cash crop for organic dairy and poultry producers. ‘There is a strong appetite for lupins as a livestock feed, and with our Farmers Own ‘ORCA’ Brand we are pushing through the barriers to get bulk lupins from growers to end users in Victoria, Southern Australia and Queensland. Our next ambition is to tap into strategic export markets. This legume has a well deserved place of prominence in the organic and regenerative cropping market – and we are looking forward to it’s initiation across the Australian organic sector’ says Carolyn, ORICoop Executive Director
Ian and Jodi are well experienced with growing lupins in Western Australia. And are thriving in growing them under an organic system. ‘Lupin crops play a pivotal role in the viability of organic and regenerative farming systems in Western Australia. They present to the farmer a range of critical advantages over other crop rotation options available such as suitability in deep acid sandy soils, excellent nitrogen fixation capability, disease resistance and disease break for other crops, impressive stockfeed quality and volume of post harvest residues and competitive demand and value of lupin seeds.
Nitrogen is typically applied to a crop in the form of urea, and although urea application can result in vigorous crop growth it has a hidden destructive action on soil health and long term fertility that requires additional fertilisation to overcome. Organic and regenerative farming systems limit or prohibit the use of urea for this reason. Lupins can fix similar levels of nitrogen from the atmosphere directly into the soil naturally and even increase soil health making them the goto natural fertiliser for the environmentally conscious consumer and farmer. The lupin seed and after harvest crop residues provide an additional benefit of an outstanding high value stockfeed source for grazing ewes and lambs. Ewes and lambs grazing or being fed lupins outperform those running on grass crop feeds and harvest residues providing substantially more lambs and reach market weight far quicker than those running on grass crop grains and residues.
With its unique macro and micro nutrient composition, there is growing evidence that incorporating lupin ingredients into animal and human diets can have direct health benefits. On farms, the benefits range from improved soil structure and water efficiency to increased yields and profitability. With its wealth of advantages, lupins are fast becoming a key ingredient in sustainable agriculture and sustainable diets.
To enquire about bulk lupins you can contact ORICoop HERE
Story written by Eva Perroni
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