The changing climate is already leading to increased incidence and intensity of droughts in Ukraine, which is in turn associated with yield (and therefore revenue) volatility which is higher than many of the country's competitors. In parallel, soil erosion - enabled by heavy soil disturbance and caused by wind and water - is removing the layers of soil that provide most functional value to farmers. It is therefore costing more in inputs to maintain yields. These economics are moving in the wrong direction for Ukrainian farmers for the same reason - modern, industrial agriculture destroys life in the soil that provides vital services. With increased biological life in the soil - from earthworms to bacteria and fungi - soil can absorb and retain more water (providing resilience against drought), it can withstand more erosion and it can make elements vital for plant growth available from the soil for free. Regenerative agriculture practices that achieve this shift in mindset are already being adopted around the world by farmers. Soil Capital has proven through its own farm management across multiple continents that transitioning from conventional to regenerative practices can be done in such a way as to improve profitability of the farm from the very first year. Markets are now starting to respond. Leading buyers and investors have taken action to preference regenerative farming and their peers are now following. Governments are also acting. There is no doubt that Ukraine's fabulous Chernozem soils have been a blessing for its farmers. But the question is - will this lead to complacency such that, by the time the economic consequences of agricultural practices that destroy that soil become impossible to ignore, the cost of changing direction will be too great?

43. IS