Europe’s roadmap to regenerative agriculture

Insights on the economic opportunities of transition

The transition to regenerative agriculture represents more than an environmental mandate—it is an economic opportunity to build a resilient, sustainable food system for Europe. As policymakers begin to reframe agricultural subsidies and investors take notice of the long-term benefits of resilient production systems, regenerative models are increasingly an attractive guide for the future of farming.  

Two recent reports—one from a consortium led by Boston Consulting Group (BCG) and another by Deloitte, both in partnership with One Planet Business for Biodiversity (OP2B), find that regenerative agriculture is emerging as a pivotal solution to growing economic and environmental pressures on Europe’s agri-food system.  

However, existing incentives and support mechanisms for farmers are often difficult to access and fall short of  the substantial early-stage investments needs for the transition. Both reports find that coordinated efforts from value chain actors, public and private financing, and an enabling policy environment are needed. They also offer actionable recommendations to advance Europe’s regenerative agriculture transition.  

Understanding the business case for regenerative agriculture  

Regenerative agriculture is more than a set of alternative farming practices. It represents a paradigm shift towards systems that enhance soil health, improve water efficiency, and foster biodiversity. The recently published study with Deloitte reveals that, after an initial transition period of three to five years, farms of all sizes that adopt these practices enjoy improved productivity and profitability compared to current conventional practices. This long-term economic uplift is particularly vital in an era when climate risks and resource scarcity threaten conventional farming methods. 

However, upfront investments for the transition remain a major barrier for farmers Depending on a farm’s size, focus crops, and region in Europe, transition costs can range from €2,000 to €5,000 per hectare. While existing incentives can reduce the payback period from nine years to five, a significant funding gap remains – typically between €1,400 to €4,100 per hectare. This gap is even more acute for small and medium-sized farms, which lack the economies of scale that benefit larger operations. 

Bridging the transition financing gap will require not only more funding, but also more effective deployment of current financial supports. New and adapted incentives should aim to address the current funding insufficiency, while also addressing the lack of transparency and lack of coordination across agronomic and financing supports for farmers. Looking ahead, the report calls for coordinated public and private financing to drive the transition across Europe. The report recommends attracting new investors through targeted blended finance interventions, rolling out incentive platforms for farmers and value chain players, and ensuring end-to-end support models for farmers in a one-stop-shop for financing needs. It emphasizes the need for each player in the value chain, including financial institutions, public institutions, and philanthropic investors, to play different roles in ensuring a viable economic model for farmers throughout the transition. 

Unlocking regenerative agriculture through public-private partnership 

With key reforms on the horizon, Europe is well-positioned to steer its agricultural system toward a more sustainable and resilient future. Farmers across Europe face mounting challenges – from rising input costs and declining soil health to increasing climate volatility – all of which threaten productivity and profitability. At the same time, the EU is entering a critical phase for policy reform, with discussions around the post-2027 Common Agricultural Policy (CAP), the Strategic Dialogue on the Future of Agriculture, and the next Multiannual Financial Framework all underway. Together, these overlapping policy milestones present a crucial opportunity to shift from practice-based subsidies to outcome-driven frameworks that reward farmers for delivering measurable environmental benefits.  

In its analysis, BCG and collaborators find that a shared, outcome-based approach to regenerative agriculture—anchored in measurable results and supported by a harmonized monitoring and verification system—can enable policymakers to better align public payments with tangible improvements in soil health, water quality, and biodiversity. Shifting the CAP to link subsidies to environmental outcomes, rather than compliance with prescribed practices, would offer stronger incentives for transition. To further support the shift, the establishment of a dedicated agri-transition fund—potentially through the European Investment Bank (EIB)—could help farmers, especially small and medium-sized ones, overcome the substantial upfront investment costs.  

Other potential roles for policy in de-risking the transition include attracting private finance through partnerships, co-investments in knowledge-sharing platforms, promotion of equipment-sharing initiatives, and support for transparent funding models that reward environmental performance. By pooling resources, sharing expertise, and establishing transparent incentive platforms, Europe can foster an environment that attracts investment in regenerative agriculture.  

With the right mix of ambition and collaboration, policy can become the critical enabler that transforms regenerative agriculture from a promising concept into a scalable reality across Europe.  

Dive deeper into European farmers’ business outlook for transition and the potential for public-private collaboration to build an enabling environment for regenerative agriculture in Europe by reading the full report findings: