Sustainable farming and profitability: does investing in soil health pay off?

An estimated 60-70% of European soils are in poor condition, affecting agricultural productivity, biodiversity and the ability of territories to cope with climate change. To address soil degradation, the European Union has established a framework through the EU Soil Strategy for 2030 and the new Soil Monitoring Law, which entered into force in December 2025. The long-term goal is to achieve healthy soils across Europe by 2050. The EU Mission A Soil Deal for Europe also supports research and innovative solutions to accelerate the transition towards more sustainable soil management.

Reducing intensive tillage, improving water and fertiliser management, maintaining vegetation cover and restoring soil organic matter can help preserve soil fertility and make agricultural production more resilient. However, adopting new practices also requires investment, additional management costs and time for adaptation, all of which affect farm businesses.

Economic sustainability is therefore an essential part of the agricultural transition, as recognised by the European Commission in its Vision for Agriculture and Food, published in February 2025. Soil degradation itself also has significant economic consequences. A study published in Global Challenges in 2025 estimated annual losses of between €40.9 billion and €72.7 billion in the European Union, associated with processes including erosion, carbon and nutrient loss, contamination and compaction. The estimate is partial and does not cover all the economic and environmental impacts of soil degradation.

As both soil degradation and the measures needed to protect agricultural land involve significant costs, understanding when sustainable practices can also be financially viable for farmers has become increasingly important.

The costs of transition: investment, management and adaptation

In July 2024, the Institute for European Environmental Policy (IEEP) published an analysis of the costs and benefits of transitioning to sustainable agriculture in the European Union, based on a review of 60 scientific studies.

The research found that farms which have already adopted sustainable practices can achieve profitability levels comparable to, and sometimes higher than, conventional farms. Economic benefits mainly come from lower operating costs, which can offset lower overall yields.

However, the situation is different during the transition period. In the first few years, farmers may face substantial investments, changes in crop yields and the need to reorganise their activities before seeing significant financial benefits.

Differences between farms are particularly important. Farm size, production type, access to capital, soil and climate conditions, and availability of technical advice all influence the ability to invest. A solution that is financially viable for a large farm may be difficult for a small agricultural business to adopt, even when the expected environmental benefits are similar.

Regenerative agriculture: what economic benefits are European farms reporting?

European regenerative agriculture programmes provide useful evidence of how better soil management can influence farm economic performance.

Between 2020 and 2025, EIT Food’s ScaleUp programme involved more than 2,900 farmers and agronomists across 14 European countries, offering training, personalised advice and opportunities to test agricultural practices.

According to the results published in June 2026, 61% of participating farms reported economic benefits, while 42% reduced their agricultural input costs. Improvements also concerned soil management: 71% of farms changed their tillage practices, 54% improved soil fertility management and 53% increased vegetation cover.

The findings suggest that regenerative practices can provide economic benefits. They also highlight the importance of continuous technical support, as testing solutions adapted to local conditions can help farmers adopt new practices successfully.

Can healthier soils reduce farming costs?

The economic viability of sustainable practices also depends on their ability to improve production efficiency and reduce losses associated with soil degradation.

Soil structure, organic matter and biological activity influence essential processes for crop growth, including water movement, nutrient availability and root development. As soil properties deteriorate, these functions may become less effective, increasing dependence on external inputs and making agricultural production more vulnerable to climate conditions.

By contrast, practices that preserve soil structure and increase organic matter can improve water infiltration and nutrient use efficiency. Under suitable conditions, these benefits can lead to lower resource consumption, reduced production costs and more stable crop yields.

The economic value of ecosystem services: beyond farm profitability

The economic sustainability of agriculture also raises the question of how the benefits of soil protection are distributed. Many positive effects of sustainable soil management extend beyond individual farms.

Biodiversity conservation, water regulation, soil carbon storage and erosion prevention all contribute to the functioning of ecosystems. However, farmers often bear a significant share of the costs required to maintain or restore soil functions without necessarily receiving financial returns that reflect the environmental value generated.

Recognising the economic value of ecosystem services has therefore become an important research area within the EU Mission Soil, which supports new business models and investment opportunities related to soil health.

For example, the Horizon Europe project InBestSoil, coordinated by the University of Vigo, is developing a monetary valuation system for ecosystem services provided by healthy soils. Through nine case studies across different European biogeographical regions and land-use contexts, the project aims to support the integration of soil health values into economic decisions, business models and public incentives.

A complementary approach is being developed by SoilValues, coordinated by KU Leuven. The project explores business models through which farmers and land managers could receive payments for the ecosystem services they provide. Its activities include six experimental sites and twelve communities of practice involving farmers, businesses, investors and public authorities.

Both projects address an essential challenge: assigning economic value to environmental improvements requires reliable systems to measure and verify the results.

INTERESH: assessing the economic sustainability of innovation

Economic sustainability is also an integral part of INTERESH activities. Through its experimental actions, the project aims to assess whether the proposed solutions for improving soil health are feasible, taking into account the productive and financial needs of participating farms.

To evaluate the results, the project has developed the INTERESH Performance Metrics (IPM) framework, which integrates environmental, economic and social indicators with Cost-Benefit Analysis (CBA) and Life Cycle Assessment (LCA). The framework will allow researchers to compare conventional agricultural practices with the solutions tested in the project, considering initial investments, operating costs, potential savings and the time needed to recover expenditure.

The assessment will also consider differences in farms’ investment capacity and their ability to adopt the innovations. The results will help identify the conditions under which sustainable practices can become financially accessible and profitable, contributing to the development of an evidence-based Regional Action Plan for Apulia that considers the practical feasibility of the proposed solutions.

Making the agricultural transition economically sustainable

European research shows that more sustainable soil management can contribute to farm profitability, mainly through lower operating costs, more efficient resource use and reduced production risks.

The wider adoption of sustainable practices will therefore depend on overcoming the economic challenges of the transition, ensuring access to technical support and developing mechanisms that recognise the value of ecosystem services. Measuring results will be essential to guide investment decisions and identify the most appropriate solutions for different agricultural systems.

Through field experiments and integrated impact assessments, projects like INTERESH can help establish the conditions under which improving soil health is compatible with the economic needs of farms. The aim is to provide farmers and policymakers with reliable evidence to plan agricultural practices that remain environmentally and financially sustainable over time.