Advancing a More Resilient Future for Agriculture Through Market Transformation

Agriculture sits at the center of one of the most urgent economic transitions of our time. Short‑term incentives, degraded natural assets and rising climate pressures are pushing conventional models to their limits. Yet across global markets, momentum is building around approaches that reward nature-positive strategies that center resilience, efficiency and innovation.

Jacob (Jake) Davis is senior director of financial advisory at NatureVest, TNC’s in-house impact investing and nature finance arm. The financial advisory team provides strategic and technical support to TNC teams and collaborators, helping them integrate finance and market-based solutions into impact strategies. This includes designing sustainable finance mechanisms, innovating business models and providing market analyses.

Below, Jake explores how short‑term market structures, conventional valuation practices and input‑driven business models undermine long‑term performance and where emerging financial tools and nature‑based approaches can generate defensible, resilience‑backed returns across the ag value chain.

Q: What’s fundamentally broken in today’s agricultural markets?

Jake Davis: Our prevailing flavor of capitalism is shareholder capitalism: a system optimized to maximize short‑term returns to owners of capital. In agriculture, that logic shows up as rational, profit‑seeking strategies that unintentionally displace nature’s free infrastructure. Monocropping creates economies of scale, but it also creates weed pressure, so we add herbicides. Tillage and herbicides diminish soil microbiology that would otherwise suppress pests and disease, so we add pesticides. Simplified systems and biologically poor soils fix fewer nutrients, so we add synthetic fertilizers. In effect, we spend heavily to recreate ecosystem services that healthy soils and biodiversity would have provided. The result is depleted soils, chemical runoff into our rivers and lakes, and farmers locked into input cycles exposed to global volatility. We absolutely can celebrate the food security these systems helped deliver. But if we realign incentives, we can produce abundantly and keep soils, waters and communities healthy.

Q: Why are incentives misaligned with long‑term value in ag, and what would it take to reverse the logic?

Davis: Two issues. First, focusing on shareholders’ short-term interests invites us to treat market-based valuations as a stand-in for broader societal well‑being. That’s intellectually convenient but often misleading. Second, because we default to short windows (quarters and a few years), we apply discount rates that reward extraction today over resilience tomorrow. You can strip a forest for timber and call it outperformance; you can gut a company for margins and call it efficiency. Both look great in the short run and destroy value over time.

Fixing it has two parts.

One sits upstream of TNC: evolve our macro measures of prosperity beyond GDP so they reflect quality of growth and its impacts on labor and nature.

The other is squarely in our wheelhouse: build resilience into performance and valuation measures. In agriculture, that means showing, in financial terms, that stewardship of soils, water and biodiversity produces steadier, more reliable cash flows and risk profiles over time than short‑term extraction.

Across NatureVest’s work, from investments and debt restructuring to new business model designs, we’re demonstrating that resilience can compete with “business as usual” while delivering material co‑benefits to ecosystems and communities. One such example is our work to develop a new business model for selling agricultural inputs. Today, retailers earn largely from sales volume, reinforced by rebates and other incentives from input manufacturers. This structure pushes fertilizer use beyond what’s necessary, even when other approaches could deliver equal or better margins for farmers while improving soil and water outcomes. Working with practitioners in the ag retail community, we’re designing an alternative model built around service provision rather than volume-based sales. The goal is to better align incentives among retailers, farmers and the health of natural resources, reducing the complexity farmers face when adopting regenerative practices while helping retailers evolve their businesses for a rapidly changing market.

Q: Where along the value chain is the biggest opportunity to flip incentives toward stewardship?

Davis: Innovations that enhance nature’s value, rather than replace it, are the most important lever. Advancements in cropping systems, cover crops and nutrient management are practical ways to build resilience. Biologicals, essentially natural inputs that support soil and plant function, are another promising class of tools precisely because they amplify ecosystem function rather than supplant it. And there’s an opportunity with equipment makers, retailers and processors to shift from throughput incentives to durability and quality: fewer passes, better soil structure and a more resilient supply.

From this, finance reinforces innovation. When banks, insurers and investors underwrite farm assets using nature‑aware criteria, behaviors change. Think of credit decisions and pricing that factor soil health, water reliability, biodiversity, crop diversification and the ability to withstand droughts, floods or heat waves. Train risk teams to measure adaptation and resilience in financial terms, which we can do today, and the capital stack will start rewarding practices that restore nature’s free services rather than replace them.

Q: What’s really keeping incumbent ag corporations from moving faster, and what would unlock them?

Davis: For a century, the market playbook monetized nature by replacing it. Undoing that is hard because the system still lacks a mainstream way to prove that ongoing stewardship matches or beats the value creation of selling more inputs. The unlocks are practical: products and services that maximize nature’s benefits on the farm; risk and credit models that price resilience; and governance, policies and mindsets, from lenders and investors to input manufacturers, equipment producers, ag retailers and farming communities, retooled to reward long‑term performance.

None of this requires a technological miracle. It requires relentless execution and clear financial evidence.

Q: Looking ahead, what opportunities for change in the agriculture sector are you most excited about, and where should investors be focusing their attention?

Davis: I’m most energized by the opportunities that come from finally being able to measure resilience in financial terms. We can quantify how soil health, biodiversity, diversified production and access to reliable water improve a farm’s risk profile, and that opens the door for investors to value resilience the same way they value yield, asset quality or margin stability. That alone could shift huge swaths of capital toward practices that rebuild the natural infrastructure on which agriculture depends.

I’m also excited about emerging biological inputs, like microbial nitrogen tools and soil‑health biostimulants, that enhance rather than replace ecosystem services while maximizing well-understood regenerative practices. These aren’t niche anymore; they’re increasingly competitive with conventional inputs and offer upside in both productivity and risk reduction.

But the biggest opportunity lies in cultural and structural change: training lenders, investors and risk managers to routinely incorporate nature‑based resilience into underwriting, diligence and portfolio strategy. We can do this today, and once it becomes standard practice, the market will naturally start rewarding stewardship.

For investors, the question isn’t whether nature‑aligned models will generate value, but who will recognize that shift early and help shape the transition.