Conventional agriculture: the efficiency myth

Erica van Eeghen's family office, VP Capital, owns 1,200 hectares of farmland and is converting 600 of them to regenerative farming. It is sowing cover crops and adapting its machinery, and Van Erica sees the promise in healthier soil and lower dependence on inputs while living the challenge daily. Making it pay as well as conventional farming, Van Erica said, is super hard. Sanne Bootsma of DOEN Ventures had a matching confession. The fund has looked for investable companies in regenerative agriculture for a long time and found very few. Both hosts wanted to put money in. The session kept finding reasons why that is so difficult.

A cheap system with hidden costs

Europe is often told its farming is among the most efficient in the world. The hosts suggested it has become good at hiding its costs. Nitrogen pollution carries an estimated societal cost of up to €180bn a year in Europe, and excessive use of fertiliser is one of the main reasons 60% of European soils are considered unhealthy. The average European farmer's salary is about 30,000 a year, while traders and processors earn billions. Farmers carry most of the production and climate risk and take whatever price they are given.

No miracles in the fertiliser bag

The EU imports 30% of its nitrogen fertiliser and 70% of its phosphate fertiliser. A corporate investor from the fertiliser industry said the price of sulphur, an essential ingredient, had risen about sevenfold in twelve months. Stocks and backlogs have protected this year's crops, but farmers will soon be unable to swallow the increases. Biological fertilisers and distributed ammonia are interesting but cannot supply the volumes, and like for like, regenerative yields fall short. In the short term, the investor said, the answer is no. Longer term, biostimulants added on top of today's inputs could help, and Europe should be more open to genetic modification. There are no miracles, the investor said. Yields have to at least hold.

A founder whose microbe lives inside the seed and fixes nitrogen for the plant said fermentation and formulation can bring the cost down, but agreed that volume and cost at scale decide. When another founder, pointing to the damage an expanding dairy herd had done to Ireland's rivers, suggested producing a little less, a former farmer turned agtech investor objected. A farmer on a margin of one or two per cent will ask how the business is supposed to survive. The former farmer saw a different opening. Some farmers now make more by selling their nitrogen fertiliser than by growing crops, and big agricultural companies are spinning off their biological units. Bio-inputs are coming, and policy and capital should ride that wave.

If you're going to invest in ag tech, you cannot chase power laws

A balance-sheet game

The sharpest analysis came from a founder working in cocoa in West Africa and Latin America. The founder's company is loosely regenerative, because "regenerative is an outcome and nobody actually really wants it," so a supplier has to offer buyers something else. Most power over agricultural supply chains sits in Europe, which still finances most of the world's farming. Whoever has the biggest balance sheet takes the risk on low-margin raw materials and becomes the farmer's buyer. That buyer can trade cocoa, sugar or wheat and wants to buy low and sell high, with no interest in the farmer's long-term health. European development-finance institutions lend hundreds of millions, even billions, a year to commodity traders in sustainability-linked loans, and on the ground the founder saw little change. Agriculture is a game of financial scarcity, the founder said, and whoever holds the money shapes what the farmer does.

An advocate for the regenerative transition wanted investors to go after root causes. In Sweden, they said, money had gone into fossil-free fertiliser, which leaves those causes untouched. Investors should fund the whole system, from private debt that reaches farmers to offtake agreements and processors that can handle diverse crops instead of monocultures.

Venture's wrong shape

The former farmer then turned on venture capital itself. "If you're going to invest in ag tech, you cannot chase power laws," they said. In 15 years, under 3% of exits across agtech and food tech were IPOs. Impressive, break-even companies with 15 years of data and two to five million in annual recurring revenue cannot raise a Series A against AI pitch decks with no revenue. Ag-bio firms with two or three strong patents are too small for venture investors and are not taken seriously by incumbents, which may buy them and shelve the technology. The sector needs specialist growth investors, and investment theses should follow the farmer's budget. This year farmers are buying expensive seed and cheap fertiliser, because seed drives yield.

One investor's parting advice was never to forget a power analysis, because power in the food system is so concentrated. One of the hosts agreed that the field needs more capital, more patience and a different view of both power and venture returns, and asked anyone with an investable company to come and talk. The money, at least, is waiting.

This Ripple was hosted by Sanne Bootsma (DOEN Ventures) and Erica van Eeghen (VP Capital) at The Drop 2026 on 16 September.