Silk Grass Farms Environmental Impact Strategy

November 2021

BUILDING A SUSTAINABLE FUTURE FOR BELIZE, WHERE ALL LIFE THRIVES AND WHERE BIODIVERSITY IS PROTECTED BY THE PEOPLE WHO LIVE CLOSEST TO IT. NATURE FOR BUSINESS, BUSINESS FOR NATURE

Table of Contents ABOUT US 4 BACKGROUND

5

FARM PLANNING

6

WATER MANAGEMENT

8

SOIL MANAGEMENT

11

CROP DIVERSITY

12

INTEGRATED PEST MGMT

14

APICULTURE

15

A SOBERING REALITY

17

WASTE NOTHING

18

ADDING VALUE

20

NEXT STEPS 21 THEORY OF CHANGE

22

About Us Silk Grass Farms is a vertically integrated agribusiness in Southern Belize, committed to innovating positive environmental and social impact at scale.

Our ambitious Environmental Impact Strategy is guided by three United Nations Sustainable Development Goals: Life on Land, Climate Action, and Responsible Production and Consumption.

To achieve the impacts we desire, we are innovating agricultural practices that sequester carbon and rehabilitate soil. Our goal is to be climate positive by 2029, sinking more CO2 than we emit.

We believe that the climate and biodiversity issues of our time can be remedied alongside, not contrary to, food production. If humans can take carbon out of the ground and emit it into the air at a scale that changes our climate, then we also have the capacity to do the reverse.

Using the regenerative farming practices described in this strategy, we work to protect the ecosystem that supports our business while producing food and boosting local economic prosperity.

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Background Silk Grass Farms, Ltd. operates within a 27,500-acre tract of land in Stann Creek, Belize, under the care of our parent organization, the Silk Grass Wildlife Preserve.

90% OF THE LAND—ABOUT 24,700 ACRES—IS PRISTINE RAINFOREST, PROTECTED IN PERPETUITY BY THE WILDLIFE PRESERVE. The remaining 10% (about 3,000 acres) was previously cultivated for commercial agriculture using conventional farming methods that eroded the topsoil and decreased biodiversity. These methods included monocropping, tilling, and the heavy use of agrichemicals such as herbicides, pesticides and petroleum-based fertilizers. Over the years, this led to lowered productivity. Ultimately the operation was abandoned and put up for sale.

In March 2019, social entrepreneurs Mandy Cabot and Peter Kjellerup purchased the operation and surrounding land with a bold vision for rehabilitating the degraded portion, while preserving the forested portion.

The forested portion became the Silk Grass Wildlife Preserve. The degraded portion became Silk Grass Farms. Under the directorship of agribusiness leader Henry Canton, Silk Grass Farms practices large-scale land rehabilitation and responsible food production and processing. After tax profits, in turn, support the mission and vision of the Silk Grass Wildlife Preserve.

May 2019

October 2020

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Just as natural topography informs ecosystem development, it also guides our farm planning.

We let the natural contours of the land tell us what to plant where, how to manage water, and how to develop infrastructure such as roads and buildings. In this way, we work with—and not against— nature.

The area within the yellow line represents 27,500 acres of land in the care of the Silk Grass Wildlife Preserve (SGWP). Areas in red, pink, blue, orange, and brown represent previously degraded land being rehabilitated and cultivated by Silk Grass Farms. These areas represent about 10% of the total area.

The remaining 90% of the property—about 24,700 acres—is first-growth rainforest that the Silk Grass Wildlife Preserve set aside to remain “forever wild,” protecting the natural ecosystems that make business—and life—possible.

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THE FIRST STEP IN CREATING OUR ENVIRONMENTAL IMPACT STRATEGY WAS IDENTIFYING THE FARM’S DIFFERENT MICROCLIMATES AND SOIL TYPES. THROUGH OBSERVATION OF NATURAL LANDSCAPES, WE RECOGNIZED 3 DIFFERENT MICROCLIMATES AND SOIL TYPES ACROSS THE FARM.

Microclimates present within the farm inform our farm planning.

Exposed flatland

Riparian valleys

Misty rainforest

Soil types inform our regenerative strategy.

Clay Soils

Sandy Soils

Silt / Alluvial Soils

In 80% of the farm, soil biodiversity and nutrient availability is low after years of being farmed under conventional methods.

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When Silk Grass Farms began operations in 2019, water drainage and retention on the farm was poor.

This led to flooding during rainy season and droughts throughout dry season, accentuating weather extremes brought on by climate change.

After heavy rains, we collected drone footage to see where water was naturally settling and where storm runoff was further eroding the land.

Observing how water moves over and through the land informs our evolving water management plan.

After seeing where water naturally settles and flows, we replaced eroded culverts with French drains and created 13 reservoir ponds. This slows storm runoff prevent erosion, spreads the water more evenly across the land to reduce flooding, replenishes groundwater, and stores water in reserve for the dry season.

Our reservoir ponds are designed to slowly replenish the water table and to help feed our irrigation system.

October 2020

November 2019

November 2019

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October 2020

January 2020 Building French drain to redirect storm runoff and prevent flooding

February 2020 french drain in progress

August 2021 french drain redirecting water to natural waterway

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We also set up 8 water table measuring stations at various locations on the farm to test the impact of our water management methods in consideration of the local watershed and downstream communities, and installed drip irrigation in our annual crop beds.

Left: Water table measuring station helps us monitor ground water levels.

Above: Placing coconut coir at the root ball of newly planted seedlings acts as a sponge to retain water.

Below Right: We are currently working with hydrology consultants to design a custom irrigation system as part of our Water Management Plan. For now, manual spot watering is the most water efficient method for hydrating plants in the field.

Below Left: For shade house irrigation we use a misting system to conserve water.

Misting system for vanilla orchids

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Manual spot watering at seedling root base

Soil ManageMent Longer grass clearing cycles create more organic matter for soil, sequester carbon, save fuel, and reduce erosion.

After carefully observing soil and the surrounding ecosystem, we have implemented a number of practices to begin the long journey to build healthy, biodiverse soil.

In 2020, we launched our “500,000 Hardwood Trees” initiative by creating a native hardwood nursery. To date, we’ve planted 4,027 native hardwoods trees around the farm.

These trees will serve a number of purposes including shade for farm workers and agroforestry plots, and erosion control.

Mahogany seedlings

Cacao seedlings for agroforestry plot

100-acres of agroforestry bring a mix of cacao trees and native hardwoods such as mahogany and tropical cedar to our farm plan

Vetiver grass planted around reservoir ponds holds soil in place.

Vetiver grass roots grow deep, preventing erosion

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Crop Diversity As the farm’s main crops, we chose mixed varietals of coconuts, citrus, and cacao. While coconuts thrive in farm’s misty rainforest microclimates, citrus is best suited for the open, flat areas of the farm and cacao agroforestry does best in the rich soils in riparian areas.

Silk Grass Farms also cultivates a diverse range of smaller crops such as vanilla, passion fruit, ginger and melons to diversify our future products and complement various land contours and soil types.

CROP

ACRES

Coconuts

1000

Citrus

300

Cacao

150

Mangoes

100

Avocadoes

116

Soursop

20

Passion Fruit

2

Vanilla

2,500 plants

Cucurbits

10

White Ginger

5

Turmeric

5

Papayas

15

Nutmeg

5

Carrots

10

Soursop

Mangoes

Lemons

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Turmeric plants and roots

Vanilla beans

Ginger

Avocado seedlings ready to plant

Passionfruit

Shade-grown cacao is a productive understory crop without deforesting.

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Integrated Pest Management In 2019 we enacted a zero-herbicide policy, only allowing for manual and mechanical brush clearing. We also implemented longer brush clearing cycles to retain water, prevent erosion, build soil organic matter, and reduce fuel use.

In 2020, after 1 full year of operation, Silk Grass Farms decreased agri-chemical use by 78% from previous conventional management records. We accomplished this by implementing a zero-herbicide policy, and Integrated Pest Management Plan (IPM), and by reducing fertilizer applications in the coconut fields.

Manual and mechanical clearing replace herbicide use.

Our IPM Plan uses preventative controls and strategic spot treatments, protecting our bee population and ecosystem from the harmful effects of pesticides.

PEST / DISEASE

CROP AFFECTED

TREATMENT

Coconut weevil

Heart of coconut palms

Mechanical trap with pheromone & sugar cane bait dipped in Lash (insecticide)

“Drunken baymen” Trigona spp.

All crops, young leaves

Locate and burn nest

Hairy Caterpillars

Citrus leaves/young vanilla shoots

Hand pick to remove; crush

Leafcutter ants

All crops; leaves

Locate and dig to open nest, spot treat with Sulban (insecticide)

Fungus

Coconut seedling roots

Dip roots in Ridomil (fungicide) before planting

Fungus

Vanilla leaves

Spot treat infected leaves and immediate area with Regnum solution (fungicide)

Locust

Coconut leaves

Hand pick to remove; crush

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apiculture With global bee populations on the decline, apiculture is important to our regenerative model. Between 2020-2021, we have purchased 50 honeybee hives and 15 melipona beecheii hives as starter hives to practice apiculture on the farm. We plan to multiply these bee colonies into more than 300 hives placed in strategic points around the farm in the next 3 years.

Bees are not only essential for crop pollination; they discourage destructive pests and act as bellwethers of ecosystem health. Raw honey from our hives also provides variety to our product mix and generates revenue.

Bee on citrus flower.

Melipona beecheii are the only bees known to pollinate vanilla, which could reduce need for hand pollination

Honey bee swarms on our farm indicate a growing bee population.

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OTHER PRACTICES WE USE TO PROMOTE SOIL HEALTH: • Shredded coconut husks to use as mulch and as a planting medium.

• Implemented low-till policy for annual fields.

• Created design for compost operation to inoculate biochar and build soil microbiome.

• Planted nitrogen fixing cover crops • Applied agricultural lime to manage PH Mulch with drip irrigation to conserve water

Agricultural lime application

In order to protect soil from sun and wind damage, we planted the nitrogen-fixing cover crop arachis pintoi in open spaces.

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Coconut husk shredder makes mulch and planting medium

A Sobering Reality While Silk Grass Farms has progressed greatly, two years of operating exposed a sobering reality: In order to run a large-scale food production and processing operation in a way that truly leaves the land better, we need to innovate.

The best practices commonly tapped for responsible agriculture and food processing are not enough to turn the tide on climate change.

25% of the world’s CO2 emissions are from agriculture. Agricultural carbon sequestration and soil regeneration at the scale required for meaningful climate impact is simply not being done—and Silk Grass Farms seeks to change that.

Two towering obstacles emerged between us and our vision of using agriculture to regenerate land at scale.

1. We have a soil problem to solve. The scale and rate of topsoil regeneration required for meaningful carbon sequestration and organic production is monumental. To regenerate biodiverse topsoil across 3,000 acres of working farmland will require unprecedented methods.

2. We have a waste problem to solve. When biomass goes unused, it becomes something far more dangerous: bio-waste. Biomass from our post-harvest processing such as coconut shells and orange pulp is generated at a rate greater than our mulch or compost operations could ever absorb. Our Waste Nothing philosophy requires of us a level of trail blazing that will eliminate the very concept of waste.

putting it in perspective Our annual production capacity will grow twenty times in the next three years, expanding from 243 tons of biomass from food processing in 2021 to more than 5,000 tons annually by 2024.

Accumulating thousands of tons of biomass over the years puts enormous strain on our environment and surrounding communities.

When biowaste decomposes, it emits large amounts of CO2 in the process, equivalent to open burning. It also harbors pests and causes downstream water pollution.

What we can do with a growing mountain of post-processing biomass? AND how do we build topsoil on thousands of acres of degraded land?

These questions drive Silk Grass Farms Environmental Impact Strategy.

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As visionary leaders, Silk Grass Farms founders know that high-level innovation requires collaboration. In the spirit of interdependence, they reached out for guidance from the best in the field. Conversations with experts in soil, bio-waste and renewable energy uncovered a pivotal breakthrough: Silk Grass Farms can convert post-production residues into the engine that will help power the company’s evolution from good to great. A crucial measure of realizing our vision lies in our ability to transform post-processing biomass from an obstacle into a remedy - at scale.

WASTE IS NOT WASTE

UNLESS WE WASTE IT.

We do this through a process called pyrolysis, a high-heat, low- oxygen treatment that decomposes biomass into useful outputs.

By contracting with three key consulting groups, Silk Grass Farms is innovating a scalable agribusiness model for significant climate-positive impact across farm and factory operations.

TOPSOIL REGENERATION • CARBON SEQUESTRATION • RENEWABLE ENERGY Research shows that pyrolyzing biomass in an anaerobic kiln can reduce carbon emissions by more than 50% as opposed to open burning or natural decomposition. Additionally, anaerobic pyrolysis stabilizes the biomass carbon, transforming it into useful agricultural and commercial products instead of CO2.

CARBON SEQUESTRATION Contracted with BC Biocarbon to build a biorefinery that can pyrolyze 1-2 tons of biomass per hour.

RENEWABLE ENERGY

Contracted with Alternative Energy Development Group to harness heat energy generated from biorefinery to power factory processes

Contracted TOPSOIL with REGENERATION GreenQuest to create a topsoil regeneration strategy using biochar, pyroligneous acid and ash from the biorefinery

THE SOLUTION TO INNOVATING POSITIVE ENVIRONMENTAL IMPACT AT SCALE CAN BE FOUND IN AN UNLIKELY HERO – OUR BIOWASTE 18 - Silk Grass Farms - Environmental Impact Strategy

CARBON SEQUESTRATION Plants provide the remarkable service of removing carbon dioxide (CO2) from the atmosphere, converting it into solid forms of carbon (biomass). They remove CO2 at a rate and efficiency that no human technology can mimic. However, plants are not built for long-term carbon storage. Once biomass decomposes or is burned, nearly all of the carbon that the plant captured is returned to the atmosphere as CO2, creating a near net-zero flow.

Silk Grass Farms is partnering with BC Biocarbon, a Cleantech company that uses proprietary, stateof-the-art carbon refining and storage technology to complement nature’s carbon removal services.

While carbon sequestration percentages vary depending on feedstock and timeframe, the fundamental concept is illustrated in the simple diagram below.

DOING THE MATH BC Biocarbon uses technology that is able to convert biomass into biochar at an approximate 30% yield rate (10 tons biomass yields ~3 tons biochar). This process is able to sequester 3.1 tons of carbon dioxide per ton of biochar. With a capacity to pyrolyze 2 tons per hour, running on a 5-day, 24-hour shift, this leads to potential sequestration of 14.9 tons of CO2 per shift, or about 3,500 tons per year.

SGF co-founders Peter Kjellerup and Henry Canton discussing biochar trial

In order to learn about biochar and ash, we experimented first with a small kiln. By burning coconut shells and deadfall in a low oxygen environment, we have created some early forms of biochar, allowing us to try different inoculation and soil application techniques. This will help inform our practices for using biochar on a larger scale.

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Adding Value BIOCHAR USES & BENEFITS • Improves soil biodiversity • Increases soil moisture retention • Builds topsoil • Produces healthier crops • Requires fewer chemical inputs • Can sequester carbon for hundreds, if not thousands of years

HEAT ENERGY USES & BENEFITS • Can be converted into electricity • Reduces dependence on fossil fuels • Can be harnessed to power food processing, factory cleaning, and dehydrating operations PYROLIGNEOUS ACID (PA) USES & BENEFITS • Natural pesticide • Natural herbicide • Natural plant growth stimulant and germination aid • Reduces need for chemical fertilizer inputs • Reduces synthetic chemical pesticide inputs

TAR • Specialty Chemicals • Road surfaces/pavement • Fuel source for heat energy

BC Biocarbon Biorefinery Processes and Outputs

BIOMASS

SHREDDER

CARBONIZER

PYROLYSIS GAS

SCREENER

PYROLYSIS GAS CONDENSER

GAS FILTRATION

PYROLYSIS LIQUID SEPARATION

RAW WOOD VINEGAR

RAW TAR

DISTILLATION SYSTEM

SURGE BIN

DRYER

SYNGAS

COMBUSTOR

PRODUCT PROCESS

BOILER

THERMAL ENERGY

SYNGAS FINISHED

WOOD VINEGAR

FILTRATION

OTHER CHEMICALS BIO-POLYMER SPECIALTY CHEMICALS

BINDER

BIOCARBON

CHAR SCREENING/SIZING

CHAR-TAR GRINDER/MIXER

PACKAGING AND STORAGE

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BIOCARBON TAR MIX

BRIQUETING M/C

BIOCOAL

BRIQUETTE 30GJ/MT

BIOCHAR

Next StepS With help from our collaborators, we are tackling two major obstacles that emerged on our journey to becoming a climate positive agribusiness.

Putting these ideas to practice as the cornerstones of our Environmental Impact Strategy, we are: • Working alongside expert consultants to construct a custom, state-of-the-art biorefinery capable of pyrolyzing all of our postprocessing biomass.

• Conducting field trials with unique recipes that utilize biorefinery outputs —biochar, ash, and pyroligneous acid (PA)— to build topsoil and sequester carbon. These recipes will include strategic inoculants from our compost operation that are tailored to our soil needs.

• Constructing 2-megawatt solar array to power factory functions. This includes a backup power switch system.

• Working with Belize Electricity Ltd. to establish a gridfeeding system for solar energy overflow.

• Determining feedstock availability across all farms; feed stocks include coconut husks and shells, citrus and fruit pulps, bamboo, and deadfall from trees.

• Formulating soil-healing methods using large-scale biochar, ash, PA, and compost applications to accelerate topsoil regeneration and carbon sequestration.

• Exploring markets for biorefinery outputs in excess of what can be used on the farm.

• Continuing to observe soil, water, climate and ecosystem features to let nature lead, leave the land better and waste nothing.

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• Farm and Factory Planning

• Professional development subsidies

• B Corp certification

• Educate and engage workforce • Boost local economy • Stakeholder representation

• Brand loyalty, increased sales

M

T

S

• Collaborations and partnerships

• Reduce imports • Increase social responsibility

E

S

• Stakeholder engagement

• Healthy, nutritious products

O

U

T • Responsible marketing

C

• Fair comp, educ., transp., housing

T

• Policy development

• Product development

• Product quality assurance • Product traceability

U

P

U

• Global Living Wage data

T

P • Training/education

• Certification guidelines

U

N

• Product technician; mkt research

• SQF, HACCP certification

O

O

I

• Policies and procedures

S

• Biorefinery

• Biochar, wood vinegar

• Soil and water management

• Healthy soils, carbon sink

• Increase productivity

• Diverse crops

• Crop resilience, specialty products

• Boost Belize exports

• Biowaste

• Biochar, compost

• Carbon, water & soil management

• Solar panels; syngas

• Renewable energy

• Reduce use of fossil fuels

• Reforestation

• Habitat, carbon, and erosion mgmt.

• Biodiversity; soil health

• Transfer shares of Silk Grass Farms to Silk Grass Wildlife Preserve

• Silk Grass Farms net profits support Silk Grass Wildlife Preserve.

• Reverse land degradation & biodiversity loss

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• Circular economy

What Matters Most Through a mosaic of complementary and innovative practices, we are re-imagining the way food is grown and processed, for good. This strategy is designed to mimic nature’s closed loop cycles, balancing what we take from nature with what we give back.

We are sinking carbon, regenerating topsoil, conserving water, and reducing CO2 emissions, while producing premium food and beverage products for the long term. When it comes to environmental impact, soil and carbon smart practices for food production and processing drive our approach to regenerative farming.

Our measurable, north star outcome is for our zerowaste, closed-loop system to be climate positive by 2029.

! it n o s d n e p e d t e n Our Pla

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