Carbon Markets: Farmers Want More to Hang Their Hat On

August 27, 2021

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by Jenny Shaffstall (AgWeb) The carbon market will grow over the next three years -- Farm Journal’s August 2021 Carbon Survey found that 3.32% of respondents were participating in an non-governmental carbon market, up from an Ag Barometer last spring where only 1% of farmers had entered into a contract. And 55% of survey respondents said that they plan on joining the market in the next three years.

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Money in the dirt?
While the carbon market is poised for growth, there are some lingering issues. Almost half of the respondents to Farm Journal’s Carbon Survey said they would need a return on investment of more than $20,000 to participate in carbon markets.

Many respondents said that the available programs were only paying on newly adopted practices and not pre-existing practices. Others thought their operation was too small to count or that the expenses required to adopt new practices would not be offset by the return on investment. A few viewed the carbon markets as a means for others to make money and said they didn’t see how it benefited them.

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Farmers also struggle to trust the motives behind the carbon market. Respondents to Farm Journal’s Carbon Survey cited fears that markets could lead to regulations that unfairly penalize them or create circumstances where they lose control over their operation. READ MORE

Clarity in Carbon Marketplace Needed, say Iowa State and EDF Reports (AgWeb)
Iowa Farmer Shares Firsthand Experience with Carbon Markets (AgWeb)
Farmer Shares Top 10 Considerations With Carbon Markets (AgWeb)
5 Tools to Unravel Carbon Market (AgWeb)

Carbon credits entice new players (Delta Farm Press)

The Carbon Hype: Three Reality Checks (Trust in Food)

Iowa Farmer Shares Firsthand Experience with Carbon Markets (Trust in Food)

Will Carbon Markets Drive Farmers to Collect More Data? (AgWeb)

Carbon markets evolving: The way forward for the US agrifood sector (AgFunder Network)

Row Crop Recipe: Practices to Help Agriculture Reduce Nitrogen Loss, Cut Carbon Footprint (AgWeb)

Markets that pay woodland owners to store carbon are complex, controversial -- Maine, the nation's most heavily forested state, has been an early participant in so-called carbon offset markets. (Portland Press Herald)

AGRICULTURE PRODUCES JUST 1% OF CARBON CREDITS, DATA SUGGESTS (Successful Farming/AgFunder)

3 challenges to carbon measurement accuracy (Southwest Farm Press)

Carbon in the Commonwealth of PA (Pennsylvania State University Extension; includes VIDEO and handouts)

7 CONSIDERATIONS BEFORE YOU SIGN ON TO A CARBON MARKET AGREEMENT (Farm Journal)

The Latest Farm Product: Carbon Credits: Global cropland has the potential to sequester as much as 570 million metric tons of carbon per year. New projects that pay farmers to adopt climate-friendly practices could help. (New York Times)

Cover crops as cash crops: Farmers angle to profit off the practice (Agri-Pulse)

Collaboration & innovation key to developing farmer-focused carbon markets (Ag Funder News/America's Cultivation Corridor)

Support to restrict how much land farmers can revegetate for carbon (Farm Weekly)

Vilsack: Carbon measuring key to wooing skeptical farmers (Agri-Pulse)

Excerpt from Trust in Food: 1. Farmers just aren’t ready: Purdue University reported in their March Ag Economy Barometer that only 1% of farmers in the U.S. have actually signed a contract for carbon sequestration.

That’s telling, but it is actually a lagging indicator, since there is a whole lot of work that has to happen before a producer can sign a contract. At Trust In Food™, we focus on tracking the leading indicators of change. A big one we’re tracking is the percentage of farmers who have the digital infrastructure required to participate in most, if not all, of these carbon market opportunities. In this year’s Farmer Perspectives On Data report, we found that 62% of farmers surveyed are not fully digitally integrated in how they manage their farm information, and almost a third are primarily pen and paper.

Tellingly, farmers are starting to show interest in getting ready, though. Farm Journal’s 2021 Technology survey revealed that not quite half – 44% — of those surveyed saw emerging opportunities like carbon markets as enough of an incentive to collect more, and better, data. That’s an encouraging sign, especially when we consider how much time and energy it can take to set up and transition to digitized management.

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2. Producers’ skepticism is founded: Anecdotally, I can tell you that for every farmer I’ve met that is eager for carbon market opportunities, there are at least another two or three who are downright skeptical. I can understand why. Farmers have been sold on more sustainable practices based on the promise of improved economics. But farmers report that they aren’t really seeing the financial upside, at least not yet. In our 2020 State of Sustainable Ag report that we co-produced with Field To Market, the vast majority of farmers reported that they’re undertaking at least some level of conservation-oriented practices. But nearly three in four say they’re not experiencing better economics as a result.

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3. Diversification is underway. From place to place, and event to event, one of the most noticeable shifts that I heard was the inclusion of different types of carbon sequestration and avoided emissions in people’s conversations. READ MORE

Excerpt from Trust in Food: The first two questions Mehmen thinks farmers should ask themselves are:

Is my digital house in order enough so my data can be applied across a platform?
Am I interested in a company that is a hub or am I more interested in looking at bolt-on companies with additional services, such as soil sampling or data entry?

Farmers can expect one of two paths with carbon programs, Mehmen says.

“The easier it is to participate in a program, the less it tends to pay. The more work you have to put in, the greater the financial reward,” he says.

Farmers skeptical of lower-paying programs should remember scale. “A little number times a big number becomes a bigger number,” he says. “If it’s $20 an acre times 1,000 acres that’s $20,000. If it’s $20 an acre times 10,000 acres it’s $200,000. Both are worth working for.”

NEW VERSUS OLD

The biggest gains for farmers, Mehmen says, could come from adopting agronomic practices you are interested in for reasons beyond the carbon potential. READ MORE

Excerpt from Southwest Farm Press: "There are many challenges or difficulties when it comes to accurately measuring carbon in the soil," says Soil Scientist Katie Lewis, Texas A&M AgriLife Research and Extension.

Lewis discussed three potential issues at the recent Texas Alliance for Water Conservation Field Day in Lubbock.

Depth

The first challenge is the depth at which carbon is measured, she says. "If we're taking a shallow sample, say zero to 4 or 6 inches, that is the most microbially active depth within the soil, so there's going to be such a high turnover that it's hard to get a good estimate of how much carbon is going to be stored.

"The best recommendation would be to take a deeper soil core to estimate carbon stocks, say to a 36-inch depth in the profile – 3 to 4 feet would be the best recommendation. Deeper in the profile, you're going to have greater potential to store long-term, more recalcitrant carbon because it's protected from disturbances and microbial activity."

Methodology

The second issue is settling on a method to determine carbon concentrations. "There are different labs across the U.S. that use different methods that work best for their operation. Labs may use a dry combustion technique to measure the total carbon in the soil. But we have to account for the inorganic fraction so that we can determine the organic fraction," Lewis explains. "We don't want to measure calcium carbonates in the soil as part of organic carbon."

Other labs prefer to measure organic matter and use estimates to calculate organic carbon, she says. "As a scientific community, we would have to decide what method is going to be the most appropriate and is going to do the best job of determining carbon across the U.S., and we would have to settle on one method."

Consistency across labs is vital. If each lab is doing something different then, "your numbers are going to be underestimated in some cases and possibly overestimated in others."

Collection consistency

The time of year carbon samples are gathered also is a concern. "Depending on when that sample is collected, you can get very different numbers throughout a growing season."

For example, if the soil is sampled while a crop is actively growing, Lewis says a lot of the carbon that's being photosynthesized, captured from the atmosphere by the plants, will be released through the roots as carbon exudates. "If you collected a sample at that point, you're going to have this massive overestimation of the long-term carbon stored in the soil."

How often samples are taken has yet to be determined as well, Lewis says.

"As a soil scientist, I think it needs to happen once a year at the same time in between crops. So, if you have a crop rotation of cotton and sorghum, you need to come out between that transition, between harvest and planting the following crop. It's the same with cover crops. You need to wait until the cover crops are terminated and before you plant your cash crop." READ MORE

Excerpt from Agri-Pulse: Companies and farm groups that are trying to recruit farmers to sign up for climate plans often face skeptical producers who fear that most, if not all, of the financial benefit will go to retailers and manufacturers who get to label their products as good for the environment. READ MORE