Dollars in the Dirt: Big Ag Pays Farmers for Control of their Soil-Bound Carbon

by Rod Nickel and Karl Plume (Reuters) The biggest global agriculture companies are competing on a new front: enticing farmers to join programs that keep atmosphere-warming carbon dioxide in the soil.

Fertilizer producers Nutrien Ltd (NTR.TO) and Yara (YAR.OL), agribusiness giant Cargill Inc (CARG.UL), and seed and chemical dealers Corteva Inc (CTVA.N) and Bayer AG (BAYGn.DE) are paying growers for every acre of land dedicated to trapping carbon underground, known as sequestering it. The companies' ambitions stretch from the United States to Canada, Brazil, Europe and India, executives told Reuters.

Farmers capture carbon by planting off-season crops, tilling the ground less and using fertilizer more efficiently. They log their practices on digital platforms to generate a carbon credit. Agricultural companies use the credits to offset the climate impact of other parts of their businesses or sell them to companies looking to reduce their own carbon footprints.

Some farmers view the programs run by the giant agricultural corporations with suspicion - as a method to harvest their data that will be used to sell them more products, according to interviews with more than a dozen farmers, analysts and farm groups. Other critics question whether it is even possible for farmers to guarantee they are keeping carbon underground because simply turning the soil can undo efforts to store it.

The farming techniques required by such programs offer the additional promise of realizing higher yields from healthier soils that are less reliant on chemicals.

Bayer is an early leader with around 1.5 million acres enrolled in sustainable agriculture programs globally, mostly in the United States.

Bayer's program is unique in that it compensates growers for planting cover crops and reducing tillage, rather than paying them for how many tonnes of verified carbon they sequester.

Nutrien's program has secured 200,000 acres in the United States and Canada this year. Nutrien expects to make a profit from the start, because enrolment involves selling farmers high-margin products like crop treatments composed of insect-killing bacteria or controlled-release fertilizer, said Mark Thompson, the company's Chief Strategy and Sustainability officer.

Cargill aims to reduce its supply-chain emissions 30% by 2030 in part by enrolling 10 million acres in small-scale regenerative agriculture programs.

Brazil and India, where farmers harvest multiple crops each year, could generate larger volumes of sequestered carbon than the United States under Yara's program in as little as three years, said Alex Bell, chief executive of the program, called Agoro Carbon Alliance. READ MORE

Excerpt from AgWired: Agoro Carbon Alliance has distributed more than $9 million in payments to U.S. farmers and ranchers in its first year, according to company officials.

“We are extremely proud of the company’s success in the first year,” said Agoro Carbon interim CEO, Elliot Formal. “We have connected with farmers and ranchers throughout the U.S., and look forward to our carbon journey together in the years to come.”

Backed by Yara International, Agoro Carbon’s carbon contract opportunities are based on improved management practices to sequester carbon and deliver sustained agriculture improvements, and are not packaged or paired with other product offerings

“At Agoro Carbon, we are focused on delivering a climate-positive change and financial returns to our farmer and rancher partners,” said Formal. “We provide education on the benefits of regenerative agriculture and work together to support their change to more sustainable practices. The transparency in our contracts, including options for early payments, help our farmer and rancher partners know exactly what to expect when working with Agoro Carbon.”

With Agoro Carbon’s background in agronomic knowledge and commitment to the carbon market, farmers and ranchers can be assured the company will be with them throughout their carbon journey. Those interested in carbon farming or learning more about conservation practices can visit AgoroCarbonAlliance.com or the Agoro Carbon Farming Knowledge Hub. READ MORE