Restoring the Natural Health of Farmland Soils at Scale

[00:00:00] Eduardo: In today’s episode, we have Bob Knight, President at Carbon Cascade Corporation, a soil regeneration as a service platform supplying agricultural water treatment systems, soil inoculants. And soon will be launching a new agricultural land trust. Bob has ample experience in both the heavy extractive industry as well as green energy, technology development and capital markets.

Bob, welcome to the show.

[00:00:27] Bob: Good to be here, Eduardo.

[00:00:30] Eduardo: Great. So why don’t we start from the top Bob, and tell us a little bit about your journey. How do you move from this heavy extractive industry while doing something transformative for our planet with regenerative agricultural technologies?

[00:00:44] Bob: You know, that’s really interesting. I’ve had such a broad set of experience in my career, primarily because I went to work, in my kind of first stage of the career for the family business, which is a vertically integrated real estate company. And my dad wanted to diversify. So when I got involved in the diversification side, I went into the extractive businesses and capital markets.

I ended up running a big technology fund and I kind of got the bug for applying new technologies that would do something positive for the world. So, it almost, I’ve seen a lot of people do this where you work on several things that are traditional industries and then you realize that there’s maybe a little more that you can do.

And when you wanna leave your legacy, you want your legacy to be one that’s very positive for the world. Really.

[00:01:39] Eduardo: Well why don’t you tell us a little bit about Carbon Cascade you know, 10,000 foot view. What does it do?

[00:01:46] Bob: We feed the world naturally or we help. It would be far too presumptuous for us to say more than just helping in our little niches.

But what we’re doing is restoring the natural health of soils through the application of technology primarily, but it’s also management practices of the land as well, and make it productive without the need for some of the systems that we’re currently using.

[00:02:12] Eduardo: What will you say is the grand mission of Carbon Cascade?

[00:02:16] Bob: I think it’s making people understand that technology’s not all bad. You can use technology. To improve the world and maybe save it. We’re applying technologies to feed the world better and do it without impacting it negatively.

[00:02:36] Eduardo: Let’s step back and talk about the big picture problem.

We understand that we have a big problem with agricultural systems.

They’re the primary reason of deforestation, biodiversity loss you name it. Every climate change problem seems to be related to agricultural practices, you know, soil degradation to a point that some soils are completely dependent on chemical fertilizers and pesticides. So, looks like the entire agricultural machine, as we have it today, is destroying land. It’s compounding the challenges we have on climate change. It’s putting food supply at risk and it seems like there’s no upside. I mean, eventually this is just compound to collapse. From your perspective what are the dynamics of this industrial agricultural problem and the root causes, would you say?

[00:03:23] Bob: Well, there’s lots of root causes and they’re different in every area. One of the things that, about the whole food supply and agricultural system is it’s very diverse. What’s true in one area may not necessarily be true in another. If you go back and look at a period of time in the North American central plains called the Dirty Thirties we had a situation where soil erosion was horrifying. We had droughts, we had winds, we were using the wrong type of tillage. My parents were living on farms at, at that point in their lives, in a place called Saskatchewan, Canada. And, I’ve got pictures of drifts that look like snow drifts, only they’re dirt drifts and they go right over one story houses. So there was terrible issue there.

We applied technology and changed it to fix that issue. We went to low tillage systems. We started putting in natural wind breaks hedgerows, so to speak. Started inventorying water and it was 1930, so it was not as sophisticated set of science as we have now. So I’m a real believer in that you can apply technology to fix problems.

Sometimes when you do something or engage in a practice, you don’t necessarily understand what the unintended consequences are gonna be. With agriculture, specifically the types of things that we are working to modify, there’s this overuse of chemicals. That made sense at the time because we needed to feed the world.

There was no knowledge set that understood what the mycelium network in the soil were there for, people kind of broadly understood ,that all of this white fungussy stuff in the soil was present in good soils, not in bad soils, and that there were other places that were just dry or sticky almost muds that you needed to a hundred percent add fertilizer to.

We’ve looked at this in two ways. First of all, we gotta fix the damage that fertilizers have done, that’s primarily changing the soil structure. So it’s granular and porous. We do that with, there’s a couple of ways. If we have irrigation, we can use our water treatment system that changes things dramatically.

If we don’t, we can use a very broad spectrum soil inoculant and other additives like biochar, things like that again, to get the soil aerobic full of the right types of aerobic bacteria that’ll fix the natural nitrogen. I mean, look at all the nitrogen we have in the air, it’s the biggest component of our air. It’s not able to be used unless you have the right soil bacteria. So these soil inoculants they kind of put a spore inventory into the soil, if you would. And as things are needed by the plants, they’re propagated and used. It could be an area of your field, for example, that has chromium pollution.

There’s bacteria that eat chromium. There’s good bacteria that fix nitrogen, that eat petroleum residues. So once we get the soil sitting back into a much more natural state, which is you know, easy to maintain we can have the soil produced without the use of all these additional chemical fertilizers.

[00:06:37] Eduardo: So basically the thesis is by injecting nature back into the soil in some way, you’re able to restore it and then as a biproduct, you’re increasing yields and productivity and value.

[00:06:54] Bob: Yeah, and decreasing input costs. I mean, one of the issues that the world is facing right now is food inflation.

If you decrease input costs, fertilizer being one of the biggest ones and increase yields at the same time, you can make some fundamental changes in the economics of agriculture. When you change the economics of something, you change the whole structure of it. People then adopt it because it works financially as well as philosophically.

[00:07:22] Eduardo: I was seeing the documentary, Kiss The Ground, I think you saw that. There is this particular phrase somewhere in the documentary where a farmer in Mid America, last name Brown, Gabe Brown, I think is his name.

[00:07:34] Bob: Yes.

Gabe.

Yeah.

[00:07:36] Eduardo: Says like something fantastic. It’s like most farmers are on welfare. They’re dependent on subsidies and even with all of this help, they’re still struggling to extract a few dollars per hectare in profit. Right. Whereas by adopting regenerative systems and this kind of technologies that Carbon Cascade is providing, you can spike up the profit per hectare to, he was speaking a hundred dollars. I wouldn’t doubt that it’s even more than that from my own calculations.

[00:08:09] Bob: Yeah. It can be an awful lot more than that. It can be 4 or $500 an acre. Actually. I think the thing to understand is you can take these natural systems and with our knowledge base now you can apply them at an industrial scale.

That’s what fertilizers were doing, right? It was the first thing in the ag business that we were able to industrially scale. Now we can look and go, okay, let’s put the system back into a balance by applying the principles of industrial scaling to natural soil inoculants and other regenerative farming practices and, apply those economic principles to a natural way of doing things.

That’s, it’s entirely doable.

[00:08:49] Eduardo: So, take a little bit of time to explain to our audience what are these elements that you’re injecting to land I mean, you have inoculants, biochar. Tell us at a high level, what are these things?

[00:09:02] Bob: Right. I’m gonna start with the water because, particularly in the southern United States, but worldwide there is a big problem with agricultural water use. In order to feed the world, feed the United States feed Mexico. We’re using an awful lot of water for agriculture. The Central Arizona project, which you’ve probably read about some of the issues with the sourcing lakes: Lake Mead and Lake Powell. Going down to unsustainable levels and having to cut the use. That’s not used for residential purposes. 80% of that water is used for agricultural purposes. You have to irrigate the soil in some of these southern states in Mexico. We have a project in El Rio Mexico right now going on where where the soil is completely dry most of the year, and it’s lifeless.

So they have to irrigate it when we put our rainmaker system in, it’s a system that injects O3, which is ozone, a very specifically produced form of ozone. And a hydrogen peroxide catalyst, very small amounts. So, we’re not adding lots of chemicals to the water. We’re only adding just a few things, and what they do is they break apart, the salts primarily that are from over fertilization and allow the soil to percolate again. What simply happens is you allow aerobic bacteria to circulate, You can reduce fertilizers, and you reduce the water use by 30%, like bang, 30%.

So if you apply that to the Central Arizona project where you’ve got 80% of the water use coming from agriculture and reduce that by 30%. You’ve fixed the problem. We’ve applied technology to fix the problem. We’ve got a project demonstration project that we’re gonna be working on in Arizona to show just that in situ right in the Arizona absolute application.

We’ve got lots of proof of that in South Africa and Saudi Arabia and many other countries in the world. But you’ve gotta prove it in the area so that policy makers can make educated choices as to what they might encourage people to do. And farmers can make educated choices like they’re just as interested in saving the water and saving their land as anyone else.

In fact, probably more so. So we think there’s gonna be some great take up in that. So that’s one system, right? That’s really important and it’s really topical right now. Our bio inoculant is a system that’s open source. It was developed by, a fellow named Dr. Dave Johnson , he’s at University of California Chico, which is their ag division.

And he developed a static pile, fungily dominant compost that’s a vermiculture. It’s a lot of words. So what happens with that is you get this very broad spectrum of bacteria and fungi. Our industrialization of that is the ability to produce it at scale in large amounts, in shorter periods, using, for example, our agri water to help keep it wet while it’s stewing, so to speak. And then what happens is we dehydrate that and we’ve got something we can send out, rehydrate spray onto a field and it inoculates everything with all the spores, both fungal and good bacteria. And it allows the soil to go back to the way it was before we stripped it and took the animals off. It becomes self sustaining. You know, before we started putting big farms in the soil was growing lots of things. It’s just really going back to application of industrial scale to a natural way of doing things.

So we put lots of spores in and instead of just a few that come out of the air, and most of these are natural spores, I mean, in, in this mix Dr. Johnson found that he was getting spores from Antartica when he was looking at it, and they weren’t needed much in North America, but they’re all there. Biochar is another soil amendment that specifically was kind of found out to be an agricultural boon.

When people discovered something called terra preta In South America the Amazonian rainforests are notoriously used as slash and burn farming. The soil wears out in five or six years and the farmers cut down and burned a bunch more trees and let the land go back to just being fallow. And it, you know, it erodes and all sorts of bad things happen.

Then they found that there were these areas that were consistently productive and they’ve been consistently productive since somewhere between four 50 and nine 50 BC. And what was in there was this primarily a strong mix of a charcoal like material that’s biochar. There were other things in it to broken pottery, just things to keep the soil loose.

But biochar is effectively wood or cellulose that’s burned in the absence of oxygen. Essentially, when you burn wood in the absence of oxygen, you don’t get CO2 you just get C, right? There’s no oxygen to bond with the carbon and make CO2. You get, it’s like graphine or anything else. A very pure form of carbon. And what carbon has this tendency to bind to almost anything. So when you get a lot of carbon in the soil, it holds water, it holds nutrients, it’s a great dispersment material for all sorts of biodiverse bacteria, fungal spores.

It’s really an amazing material and it can be made from the waste products on your farm.

[00:14:29] Eduardo: What is the alternative Bob to somebody who wants to adopt regenerative practices? What does it look like without this technologies that you’re bringing versus with.

[00:14:42] Bob: That’s a very broad question and agriculture’s a very broad business. So, but let’s just take the example, of a vegetable farm in Mexico. So right now, the soil that we look at down in the El Rio project, which is a Taylor Farms grower, that is selling to one of the bigger lettuce companies in the United States. This very dead soil, there’s no microbes in it. There’s no fungi in it. You must add water and fertilizer to make it grow, and then they get very good crops. What we’ve found in our projects there is that first of all, the use of the rainmaker system gets the soil ready to be hyper productive. And then when you add these natural spores, they were getting yield increases of 20 to 25%.

Faster germination and healthier soils. One of the things about having healthy soil is you don’t need as many pesticides. So instead of adding fertilizer to grow everything and then killing the stuff that was grown as an unintended consequence, if you have healthy soils, what you get is your crop and a cover crop beside it or after it growing very naturally and restoring the soil’s health and biodiversity to the point where it becomes self sustaining. You don’t have to do these things every year. And I think eventually the less we try and change things, the better off we’re gonna be. We’ve gotta get things established in a steady state and then let them sit.

[00:16:11] Eduardo: Are there any downsides to accelerating the process through this tech?

[00:16:16] Bob: I don’t know of any. There probably is. Some weird unintended consequence that is a small thing, but I don’t see any major ones. You know I suppose one of the risks would be as I kind of harp on, there’s really, really a diverse universe of farm types etcetera on there. What, you don’t wanna get into a situation of thinking, Gosh, if I just add this magic formula, no matter what kind of farm I have everything’s gonna be fine.

I mean, we are applying knowledge and technology here, so soils testing and all of the things that we do to ensure that that health is there, has to be watched very carefully. And there may be times when you have to add a chemical, you have to add a different type of inoculant. You have to specialize in something because of, just like you take an antibiotic, when you get an infection, soil gets infections too. You fix it when it’s necessary, just don’t use it all the time.

[00:17:15] Eduardo: You’re arriving to a healthier soil that is capturing more carbon, that is saving water.

What’s a timeframe for an operator to go from degraded to productive and healthy soil?

[00:17:29] Bob: We had a situation in southern Alberta, Canada where we put our rainmaker system onto a potato farm only for six weeks before harvest. This was just last week, we got the harvest off and there was a 31.5% increase in yield.

There’s some really cool things. The soil was soft and granular again so that when they were running the harvester through it, for one quarter of it, they turned the treatment system off.

So it was just the regular way they farmed. The other three quarters of it were treated. When they hit that quarter of the pivot turn with the equipment, they had to open the throttle up and use more power to harvest. So, we what we did there was we increased the yield, We made the potatoes easier to clean because all the dirt just fell off them.

I’ve got a film of the harvester and it’s got a shaker tray that drops the dirt off the potatoes. And on the treated stuff, you can see this plume of dirt coming off and it’s sticky. It sits on the rest of this stuff. So we save money by cleaning costs, energy costs, higher yield, some other neat things.

These potatoes are being grown for french fries and the number of small potatoes was significantly less. So to fill a 22 pound bag they used the untreated side would take 50 tubers, 50 potatoes, and the treated side was down to 40. So what that means is, for the people that are making their french fries, it’s more efficient. They save money. Each time you get a better situation yield wise, that’s where some really interesting unintended consequences happen. Lower fuel costs, lower cleaning costs, higher yields, better potatoes. We haven’t even started talking about density and micronutrients yet. Our farming community in general has been increasing the calorific content of our crops for the last 50 years.

What’s been going down is the micronutrient count. When we’re feeding our machines, we wanna have the healthiest food possible. If you’ve got high micronutrient talents in your food, it’s gonna be healthier, it’s gonna taste better. It’s gonna have better texture. Everything gets better if you do this right.

[00:19:44] Eduardo: The one thing that comes to mind is you’re sequestering carbon.

[00:19:47] Bob: You can do 10 tons of soil organic carbon additions per year for about six or seven years till you go out your soil fully loaded. That’s in the form of fungal networks that are long lasting. I mean, they’ll last for hundreds or, or thousands of years, as long as you don’t go back to treating them the way we’ve been doing it right now and wrecking them again. But as long as you have your operating practices in the right way, you can sequester according to, again University studies. So this isn’t my work, this is David Johnson’s work. He got 10.28 tons of carbon per acre per year multiply that by 3.68 and you’ll get the CO2 equivalent. That’s 30 tons of carbon, over 30 tons of carbon per acre, per year, per six years. If you apply that over the millions of acres that we are farming in North America alone, you’ve made a substantial dent in the amount of extra carbon in the atmosphere. And what I like about that is, you know, we talk about carbon sequestration schemes with big machines that inject the carbon down at a caverns or make something with it.

Well, I don’t know what’s gonna happen with that over a hundred year period. All I know is that if we do it this way, we’re not gonna hurt anything. We’re just gonna make our land better. If we put it down in a cavern and somebody’s walking across that cavern 80 years from now, and all of a sudden it’s leaking CO2 ,at some point enough CO2 is you know, you lack the ability to breathe. And in concentrated farms like that, that’s not something that is absolutely out of the question. Now, normally speaking, people I think have ideas about CO2 that it’s some kind of poison gas or toxic substance. It’s not, It’s something that we can use if we put it into the soil, we use it naturally if we just sequester it into a cavern someplace that’s unnatural. So I figure that if you wanna avoid unintended consequences, the thing to do is use natural systems to try and solve your problem. We can do that because now we’re smarter than we used to be. We have a lot more knowledge. We can apply technology, we can measure things. And, that’s some of the most important things. So simple to measure soil carbon, you take a soil sample, you cook it at 400 degrees for about three and a half hours, and you weigh it. That’s your baseline, add your soil inoculants, and a year later do exactly the same thing, the difference in weight applied over the acreage that you’re treating like that, is the amount of soil organic carbon that you are sequestering. So we can measure it, it’s doing good during the process, like really good and, it’s not expensive. In fact, it saves money but when you look at the cost of some of these carbon sequestration schemes, being a cost of 25 or $30 a ton, why not do it for free? You know, and fix your crops at the same time, that seems to make a whole lot more sense to me.

[00:22:53] Eduardo: Tell us a little bit about that SOC certification: The soil organic carbon.

[00:22:58] Bob: Yeah. And that’s in the early stages of protocols right now. The soil community and the carbon credit community have been struggling to find the right ways to do this. Partly, because the systems that they’ve been utilizing which is going to, for example, changing your farming practice and going to zero till gets, you know, maybe a fifth of a ton per acre, maybe a 10th of a ton per acre of carbon credit. So there’s not a lot of volume there to average your costs over. And that’s in the idea of having carbon offsets and selling them in something that starts creating, 10 or so, I mean even three tons of soil organic carbon per acre,

now you’re starting to get enough that offsets, at prices that are affordable, seem to start making sense. So you have to test and you gotta do a lot of testing in our context, the way we look at it and we’re getting a protocol actually done for our systems to do this, so we go to Gold Standard, or Vera, and we actually have them create a standard for the measurement of carbon credits or carbon offsets using the systems that we have. We’re partway through that process right now.

If we’re doing agriculture right, we’ve gotta do more testing anyway. So, to us that testing we just combine the soil organic test with a whole bunch of other nutrient tests and all that, and it just then makes sense for us so we can make money and you have to have things that are economically feasible and supportable. By doing all this testing, knowing our land very well, and applying the actual amount of carbon that we really are sequestering, not doing it from a computer model or anything, it’s measured and we can sell those as offsets to create another income stream for farmers.

[00:24:47] Eduardo: Tell us a little bit about the transition that a land owner, a land operator, you know, goes through from point A to point B. What kind of knowhow equipment, what kinda investment are we talking about? What does it take?

[00:25:05] Bob: You know, one of the things that we’re doing is trying to create all of our systems so that they work within the existing agricultural equipment and practices. We may improve that later and change more practices. But right now, if you’re a big farmer, you’ve got big equipment and you do subsurface incorporation of fertilizer when you seed okay, and there’s a little drop of fertilizer gets put on each seed, or you treat the seeds first, we can do both those things with our bioknock.

We can either do, a seed coating that lets you inject treated seeds. Or you can go afterwards and spray the ground with it. It’s really very similar to making a compost tea. It’s a spore tea, so we take material that once it’s dehydrated and I actually got some of it. I don’t know whether you’ll be able to see this, but I’m just going to break it and show it coming down. It’s just really dehydrated compost. So we put that mix out with water that’s not been chlorinated and agitate it so all the spores get knocked off and strain it. That’s what you treat the field with using your existing equipment. With biochar, if you’re gonna add that as a soil amendment, you do it in exactly the same way as if you were broadcasting manure.

So same equipment, if you’ve already got, a water system, you can apply our system by just adding a small booster pump to inject the ozone and the catalyst into the existing fertilizer line. And, the modification takes a day and a half to do maybe. We did this farm in Alberta here, I actually went out and helped with the install which was fun. It was the first one I’d done in North America. We did it in an afternoon and then had to get an electrician to come back and rewire some stuff in the morning. And six weeks later, the farmer had a 31% yield increase on that pivot and that would’ve made him on the 140 acres of pivot covered $159,000 in additional revenue.

That’s the difference between being marginal in your operation and making lots of money. And by the way, he bought 10 more units because he has 11 pivots. So we did a trial with the guy, gave him a break on the first machine, and he bought 10 more units right after harvest.

We’re just getting ready to start putting them in for next year’s crop farm. When you see a farmer, farmers are notoriously conservative. They don’t wanna adopt a new practice until they’re absolutely sure it works. That’s a vote of confidence from a highly qualified guy that’s been farming for 25 years in the area, and he’s just been grinning about this, he thinks he’s excited about farming again.

[00:27:45] Eduardo: What you telling me is that you can pretty much adopt this, these new components, these new products, and implement them using for the most part, the same existing equipment that industrial farming requires. In terms of financing is not that, It’s not like they need lot of…

[00:28:05] Bob: No

[00:28:05] Eduardo: …financing help in order to transition to a more productive system?

[00:28:10] Bob: if You get products that are paying for themselves. So, I don’t exactly have the perfect numbers on the payback period for this farm in Southern Alberta, but it’s kind of in the nature of six weeks and you’ve got return of capital. There’s not many things you can do that have that type of return. And admittedly we got a good year and it’s probably not always gonna be a 30% increase. But even so, you those are astounding results that, that allow farmers to make investments in the way that we would make an investment in buying a piece of office equipment.

We know that we can get it paid for over a period of time. It’s just a period of time may end up being very short. So that part’s easy. The use of bioinoculants, I don’t think there’s ever a situation where farmers will broadly adopt something and just do their whole piece of property based on what somebody tells ’em.

So it’s gonna be a year where they do a little bit and compare it to their normal ways. And when they see the increase, you’ll see them adopting it across the whole spectrum of their operations

and that’s the reality of things Eduardo, you’ve gotta let people learn for themselves, not make them do stuff. You can’t make people do things successfully, but when you can show them how well something works and they get all excited about their careers again, and a lot of farmers aren’t all that excited about their careers because of all the stress of these high input costs, high fertilizer costs, low yields..

[00:29:45] Eduardo: Risks.

[00:29:47] Bob: Blights, droughts. You don’t want to be a farmer unless you’ve got some good tools.

[00:29:49] Eduardo: Yeah, exactly. And then the insurance probably getting more and more expensive, right?

[00:29:54] Bob: Everything is getting more and more expensive So I started my career in a time of high inflation, and, over the last 12 or 13 years watching this positive leverage situation, interest rate wise and very, very low inflation where our input costs weren’t going up substantially, sometimes going down. And that’s switched. I don’t think there’s anybody that would argue that we’re not into a period of high inflation. If you measure inflation the same way now as you measured it in the 1980s when I started doing this, the core level of inflation would probably be on the 14 to 15% range.

Okay, they’ve changed the definitions of some of those things. I remember having projects that, my financing rate, my mortgage rate on apartment projects was 16.75%. You know, think about that.

You couldn’t make that work now. And, we’re going back into a situation like that. So applying that to agriculture if we can lower input costs to offset the increase in interest costs, well at least have people so they aren’t gonna lose the farm. And that’s high input costs and high mortgage rates, no matter what’s your business, but particularly in agriculture, that’s such a negative impact that you’re gonna jeopardize your business.

[00:31:14] Eduardo: You also have this very interesting land trust or buy and leaseback model. Tell us a little bit about how that works and why did you choose to follow this model?

[00:31:25] Bob: Well, the fellow that started Carbon Cascade, a fell named Tony Humble, asked me to come in and do some consulting for them at first. What he was saying was, we should buy land and do this for ourselves because we’ll make so much money on.

And I said, Yeah, but you know what, there might be a better way of doing this. Why don’t we buy the land, securitize it, turn into a perpetual agricultural trust, each parcel, syndicate it one way or another, and allow people to invest in very small pieces, small bites, I should say of, of a large collection of agricultural land. And going back to my real estate roots, one of the things I’ve known all my career is that the best investment you’ll ever make is land.

As long as you don’t lever it. If you, if you add a bunch of leverage, of course you can increase the risk. But if you look at some of the great family companies of, for instance, the UK would be a good example. Grosvenor Developments, big real estate company, but their foundation was based on land and land lease income.

It’s not something that earns you 25%. It’s just that you always earn six or 7% forever, and the value keeps going up. We studied, for example from the USDA figures and there’s almost never been a year where land prices have gone down. They have a couple of times, for short periods, but overall you get this trending upwards effect that I don’t see really any other asset that you get that in. In real estate, we have a saying land appreciates and buildings depreciates.

So, you get higher yields and cash flow off of your buildings, but they’re losing value every day. I was comparing this against people that would talk about creating a gold based currency.

So a gold based currency, that’s something that has no intrinsic utility. So if you’re looking for a long term, like intergenerational wealth transfer asset, unlevered, no mortgage, agricultural lands is in my mind the very best investment you could have.

It’s stable. It always grows. It can’t be unreasonably foreclosed on, particularly in the United States with the protections of property rights, which is one of the reasons we’re starting in the United States, by the way that protection of property rights is something that is very, very strong in the United States.

It’s not so in every country. And then we got around to saying, Okay, how do we do this? We’re working on doing it as a cryptocurrency that is backed by perhaps the strongest asset of them all that is we would probably interlist it with a real estate investment trust so that a token in this may be exchangeable for a real estate investment trust token.

And do a couple of things. First of all, we’re creating this long term store of value that people anywhere in the world can invest in. You wanna buy a thousand acre farm, it’s gonna cost you a number of millions of dollars. Most people can’t do that. If you wanna put a hundred dollars in this trust, you’re able to do that.

It’s safe. It will draw, we think, more people into the cryptocurrency sphere. It’s not speculative. It can be used within the cryptosphere as an unlevered asset that some of the more interesting schemes that people do to leverage things in the cryptosphere can be applied to this.

It’s a tool in the cryptosphere. It’s a security in the real estate investment trust side of things. And it allows us to apply our systems in the highest and best use possible, to showcase what we can do with land naturally. You get into a few other things that happen with it too. Like, for example, when you talked about it being a buy and leaseback routine, it’s not always gonna be leaseback, they’re gonna be farmers that wanna exit their system. They don’t want to participate in a plan like that. So they just wanna sell. One of the things that’s happened in the agricultural business in North America particularly, but worldwide, I think, is that the very high cost of starting in a farming operation precludes a lot of young people from getting into it.

So what I’d like to eventually do is see this morph into being able to bring people in that are young agricultural enthusiasts that wanna do this stuff, wanna adopt our technologies and techniques. And farm on a little bit more of a share cropping basis where they become long term employees that would share on their own crop and perhaps share on the overall profits of the integrated farming operations or consolidated farming operations.

I was kind of thinking of the Japanese employment model where people would come in and they become employed for life, because when you’re in the agricultural business, it is a life, it’s not something that you go to work at nine o’clock in the morning and leave at five. You live out there typically. You work, if you’re needed to work at four o’clock in the morning, you work at four o’clock in the morning. You do what’s necessary. It’s a completely different life. In order to get employees that are gonna be happy in that environment, they’ve gotta be compensated properly. They’ve gotta be using an economic model to have them sharing in the fruits of their own labor, sharing in the fruits of the collective labor and allow them to do what they’ve wanted to do and love to do without having to work at a steel factory for 20 years to save up enough to buy a little farm.

So, we think there can be kind of a fundamental change with our little part of the way we do that business too.

[00:37:19] Eduardo: So, from one end, I understand you’re bringing a mechanism for investors to store value and actually appreciate, It’s a pretty secure investment and it goes forever, right?

It stores value. It’s very stable. It’s not subject to the swings of the stock market that we’re seeing right? and on the other hand, you have operators who can make use of their own land if they decide to, to sell it, they can use back with the technologies, have a higher profit, higher yield, better products and also, by tokenizing the land basically they could participate on the value increase of their land, of the land they’re operating.

[00:38:04] Bob: Of course, there’s never been anything quite like this. So we have to surmise a few things. Very likely call it the liquidity premium. If you have a real estate investment trust, for example,

and you have an aggregate value for all the land and buildings that you’ve got, and it’ll typically trade at a 15 to 24% of the numbers I looked at anyway. Premium to the aggregate, just appraised value. I think in the cryptosphere we’ll probably see that premium higher reason being is that you’re able to fractionate token values down even lower.

You can break a token up that might be worth a hundred dollars. It could be a real form of currency and have additional utility. Like we trade Bitcoin for example. Its utility, is the ability to use it as a mechanism for trade. This will have that utility as well.

And it’s not gonna have some crazy 300% liquidity premium, but I think it’s gonna be more than in the traditional markets. And I think it’s going to allow people that don’t traditionally play in real estate investment trusts to get involved in a safe asset like that. And also, this is kind of interesting, part of your introduction talked about my experience in capital markets. You get people that normally wouldn’t invest in cryptocurrency, institutions and things like that, going, this is finally an idea I think I can support.

[00:39:29] Eduardo: And a lot more liquid also. Right? Like if I want out, they can completely just trade on secondaries the tokens and that’s basically a gold standard.

[00:39:39] Bob: It’s a land standard,

[00:39:40] Eduardo: A land standard.

[00:39:41] Bob: But, but yeah and that is where, the idea came from. People have wanted a gold standard currency. In fact, one of my capital markets friends and partners wanted to do a gold fund. Where we would buy a number of million ounces of gold, keep it in vaults around the world, you could exchange it for your token for physical or it would just sit there. One of the problems with that is it costs you money to keep the asset. The asset becomes a cash flow drain, so you’re always having to sell some of it. It’s an asset that’s like that. But it doesn’t have the roller coaster ride of value and it doesn’t cost anything to keep, we’re making money by operating the farms. So to my way of thinking, it’s gotta be without leverage as safe and asset as there is out there.

[00:40:31] Eduardo: I can think of all kinds of applications of this increasing for store value of an escrow accounts using token and using it as a collateral really for other kinds of investment.

[00:40:43] Bob: You know, if you look at what’s happened to some of the stable coins that are algorithmically based, that’s a tongue twister of a word.

You know, and it is only the ability to keep them stable is only as deep as your liquidity reserve is

and if you get past that, and there were some examples this year, the bottom falls right out of it and it surprised people. If you’ve got something that has an intrinsic value, it truly is stable. I’m not sure you’d want to call it a stable coin, because that infers that it would be algorithmically traded, but it’s the same thing except it doesn’t need artificial supports.

[00:41:19] Eduardo: Let’s talk about call to action.

What’s your call to action, Bob, to landowners and to investors out there?

[00:41:28] Bob: You know, it’s such a big industry. The call to action is really don’t take the status quo as the only thing we can do. Get out there and find out all of these different new systems of old systems that we’re rediscovering. You know, go to the seminars that people like Dr. Johnson put on. Find out about, how you can have a circular farm economy, creating your own fertilizer and soil amendments. Find out about things that you can increase your yield and decrease those input costs with an open mind.

We’re seeing people just start to grin when they see the results that we can get from some of this stuff. It surprises them, it surprises agronomists. We’ve had agronomists say, We don’t understand why this is happening, but it does. You know, we’re seeing your results. When you’re in a situation where there’s fundamental change in an industry it’s a bit stressful unless you do keep that open mind and just welcome it, adopt it at your own pace, certainly. But don’t just stand still, don’t lose your farm because fertilizer costs are going up and interest rates are going up. Find different things that you can do to take advantage of the situation. Take advantage of the situation, we’ve got inflation, we’ve got food inflation means prices are going up for your crops, if you can lower your input cost instead of just watching it increase and increase your yield, you can actually make more money in inflationary times then you can in stable times. So people that are consumers don’t want to hear that, but that’s the truth.

[00:43:01] Eduardo: What would your call to action be for investors?

[00:43:03] Bob: Look at systems and investments that you can literally predict over a long period of time what generally is gonna happen. I mean, there’s always gonna be outside influences that push things up or down a little bit, but you take an investment like these land trusts or like companies that are involved in regenerative agriculture they’re worth a go because they’re adopting new technologies and new techniques, that fit a rapidly changing culture and economy.

I was raised in the seventies and watched, a whole bunch of change in civil rights change in technology. Eduardo the first computer programming we did was on punch cards. We didn’t have hard drives, we didn’t have all sorts of things. If I had embraced that and bought Apple and IBM at the time, I would probably have never worked. So look at these up and coming things and take a portfolio weighted risk with them.

[00:44:01] Eduardo: Very good. Bob. How can people learn more about your work about Carbon Cascade?

[00:44:08] Bob: carboncascade.ca and if you need to get in touch with me, it’s bob.knight@carboncascade.ca hopefully you can toss that in the text description and certainly if you go to our website you just click on the link and it’ll get you in touch with me, and I’m happy to talk to people about this. I’m really excited about it. I’m in my mid sixties and I’ve watched lots of different deals have been evolved in lots of different deals. I’m excited about this. It’s, it’s not just fun, it’s gratifying and fulfilling. My mom was an earth baby, she showed me about composting and natural gardening in that case 55 years ago. And, now I get to see how that can be reintroduced to make farms better and make lives better.

[00:44:56] Eduardo: It seems like you have ideated created this a concept of building a machine to go regenerative on a short period of time, tackle some of the biggest challenges we have, on climate change, carbon sequestration, nutrients, on food yields, and profits for farmers, and create a store of value for investors. It sounds like it’s a really well rounded solution for multiple stakeholders.

[00:45:25] Bob: Yeah. And it’s the product of a team, right? And this is no coming out of my brain. This is some really, really talented people that we’re involved with. Both from a mentorship and consulting standpoint and internally to the company that have really put something together here that I think is special. It’s application of lots of knowledge, it’s turning those into sound business practices and, I think we’ll do well and I think the world will do better because of us.

[00:45:53] Eduardo: Ready for your top five?

[00:45:54] Bob: Sure…

[00:45:56] Eduardo: Number one is top author or book.

[00:45:59] Bob: Okay. I like things that make you think. So I like alternative history and speculative fiction. You wanna get yourself made to think read David Weber’s Safehold series. It’ll just make you think real hard about life and be an entertaining read, too.

[00:46:14] Eduardo: Great. Number two, what climate leader do you look up to or inspires you?

[00:46:20] Bob: Okay. Not so much climate leaders as people who are using technology to implement change that positively impacts the world. And right now, I would have to say it’s Elon Musk. I mean, he is doing some stuff with Tesla whether you agree with all of his processes and positions or not, he’s taking something and actually making it happen and that to me is impressive.

[00:46:45] Eduardo: Number three. If you had a magic wand, what would be the one thing you would change or problem you will solve today?

[00:46:52] Bob: Tribalism. I think it’s self evident. We spend more time arguing than we do working together. So if we got rid of that, I think we’d get back to collective solutions for problems.

[00:47:04] Eduardo: Number four, who do you think we need to have in the podcast?

[00:47:07] Bob: You know, Yeah. There’s a number of people you might think of getting a couple of the people who actually developed some of these regenerative agriculture systems.

David Johnson. If you look at his YouTube presentations, I think you’ll find that he’s an engaging guy that would be able to probably entertain and educate your watchers quite a bit.

[00:47:25] Eduardo: Excellent. And number five, Do you think we’ll make it?

[00:47:30] Bob: Oh, yeah.

Yeah. Remember I brought up the Dirty Thirties, everybody thought it was the end of livability in the prairies when that was happening, and indeed it probably was close. But as humans, we’re toolmakers. That’s what we do. We develop technologies that solve problems, we’ve identified problems over the last 20 years that we didn’t realize existed, and we’re now starting to fix them. Every fix is not gonna be right, but we’ll have enough good tries to solve the problem, so it’s not gonna be the end of humanity.

[00:48:03] Eduardo: Great. Thank you so much for being with us, Bob. It’s been a pleasure.

[00:48:07] Bob: Absolute pleasure. I enjoyed the discussion.