Sign up to receive this Nature Investment Hub resource
Agriculture in Canada is facing mounting challenges: extreme weather, rising input costs, trade disruptions and market instability. At the same time, producers are being encouraged to adopt beneficial management practices (BMPs) to adapt to growing climate volatility. However, transitioning to these practices often brings financial uncertainty. Innovative de-risking tools — designed to reduce uncertainty, encourage on-farm innovation, and lower long-term public indemnity costs — have shown promise in other contexts.
In collaboration with Farmers for Climate Solutions and the Smart Prosperity Institute, we are working directly with farmers, insurers, and key public, private, and financial sector actors to explore the environmental and economic value of these tools in the Canadian context.
Starting in 2025 and 2026 with small-scale, on-farm pilot projects in Ontario corn production, and expanding in 2027 to other provinces and production systems, this project aims to test how these tools can be adapted to different regional contexts — and to identify what it takes, and who needs to be at the table, to enable their long-term success and sustainability.
The tools being piloted not only have the potential to help reduce the financial uncertainty for farmers adopting new practices, but also create clear incentives for insurers, lenders, and supply chain actors to support and invest in climate-smart agriculture. By better aligning these actors around shared environmental and economic outcomes, we can create the enabling conditions needed for scalable and lasting change.
This project will help build a comprehensive toolkit for Canada’s agriculture sector by testing novel de-risking tools on farms with farmers. Working with our project partners, we are trialing different risk-management tools to de-risk BMP adoption:
In spring 2025, the project launched its first pilot, recruiting a small group of farmers producing corn across Ontario. We will have other pilot projects in other regions in 2026, with an intent to expand in 2027 and beyond.
The 2025 pilot currently underway is the Split Nitrogen Application Profit Guarantee Pilot, which is designed to help these farmers test split nitrogen application in their fields or update application rates. The pilot will pay these farmers in case of yield-based profit loss due to split nitrogen application on enrolled acres, which minimizes the risks associated with this practice. The program also offers subsidized technical support to help with nutrient-management planning, soil testing and rate determination. Split nitrogen application can lower input costs and improve responsiveness during the growing season, leading to higher yields and reduced nutrient losses. This not only benefits the environment, but also strengthens farm resilience by maintaining or even increasing profit margins.
The initial pilot will enable us to test the production guarantee model in the context of well-known nitrogen management and enhanced soil testing practices to define the application rate. This pilot is intended to collect data and refine program design elements. We will use findings from this pilot to inform the demonstration program design and delivery, with the support of committed collaborators.
The risks that we face as farmers continue to increase, and we need innovative and reliable risk-management tools to help us implement practices that build resilience and improve environmental impacts without adding more financial stress or risk. Through this project, we are developing partnerships with government, sector organizations and financial and insurance institutions to identify and implement practical solutions that should help our farms thrive amidst multiple uncertainties.
