Business case

 

For the proposed project we formulated a business case, based on the components of the Business Model Canvas.

 

In the customer segment, i.e. the people for whom we create value, we find farmers and environmental policy makers. Farmers will implement this system in their field on the basis of personal monetary gain (less dependence on fertilizers) and on the basis of emission reduction policy demanded by the environmental law. For the policy makers we provide a system that decreases non-point sources of pollution, and therefore provides environmental value.

 

The services and products that create value for these customers are noted in the value proposition. For the farmers, several environmental services apply: on the one hand provisioning services (increased efficient nutrient cycling contributes to reduced pollution and external input of artificial fertilizer and subsequent fines for excess application), and on the other hand regulating services (pollination, pest control, erosion control and maintenance of soil fertility). Besides that, part of the buffer zones can be harvested serving as a crop.

 

For policy makers, the services are similar: regulating services include filtering the surface runoff, stabilizing banks, crop pollination and pest control. Next to that the designed system provides support of habitat services by hosting above and belowground biodiversity and increasing connectivity of natural areas in the agricultural landscape.

A raw estimation of the effectiveness of the CLEAR system is made, based on the usage of standard buffer strips. The multilayer buffer strips will be more effective in removing nutrients, due to the greater species complexity and the canopy and root stratification. It has been calculated how many hectares of maize could be grown with the nitrogen retained by the buffer strips, and the percentage of this area in relation to the total agricultural area of the country. For e.g. Czech Republic, this gave an area of 3 million hectares, which accounts for 2.9% of the total agricultural area in this country. For several other Eastern European countries, the results can be seen in the Appendix, as well as the calculations.

 

Alterra can channel the knowledge towards interested parties (farmers, policy makers) and thereby deliver the value. The business is valued through the  environmental services mentioned above: provisioning  (mulch, fertilizers), regulating services (water treatment, erosion control, pollination, biological control, maintenance of soil fertility), supporting of habitat services (habitat, nursery services) and cultural services (aesthetic value). Regulating services such as water treatment, erosion control, and biological control have a direct monetary value. The implementation of the CLEAR system has a cost, but the long term gains from this system are expected to compensate the initial costs.

 

The key resources needed to create, deliver and capture value are physical and financial. For the first, industries will provide means to produce the filtration system and contractors will implement it in the field. Regarding the buffer strips, knowledge of experts is required to set up the most suitable design for the local area. Financially, a joint contribution of farmers and state and/or private investors, possibly through subsidies or economical incentives is suggested.

Key activities to be able to perform are:

 

• Making a pilot project in a limited area in which the performance of the system is investigated.

• Adjustments can be made to improve the system and translate it to a bigger plot.

• With this knowledge Alterra Wageningen UR can approach parties that would be interested and suitable for  this particular project, or vice versa.