Future of Farming: Chase to Capture Carbon as Another Revenue Stream

by Tyne Morgan (Farm Journal AgWeb) As a possible policy shift may put sustainable farming practices in the spotlight, companies are already paying farmers to shift to more "climate smart farming" like utilizing no-till as a production method. -- ... “Tom Vilsack will be integral to President-Elect Biden on climate change, which will be an important feature of this administration,” says Michael Dykes, CEO of International Dairy Foods Association (IDFA). “He knows what it takes to implement those things all the way down to the farm level, and how to do these kinds of things in a way that has something in it for the farmers so that the farmers are able to begin to implement at the very production level at the farm and all the way through.”

While it’s not clear what programs will entail, the Washington Post recently reported there may be a financial incentive for farmers to participate. The report outlined everything from incentivizing farmers to remove carbon dioxide from the air and storing it in the ground to establishing a carbon bank to paying farmers to lock carbon in the soil by using practices like no-till. However, the general consensus is all these programs will be voluntary.

“I think, especially the team at USDA, a lot of these individuals have worked on climate, but have been strong proponents of voluntary, incentive-based conservation approaches for farmers and less on the regulatory side,” says Karla Thieman of the Russell Group.

Major ag companies have already laid the groundwork. BASF says sustainable and climate-first farming practices have been a focus for years for the company.

By utilizing no-till or reduced-tillage systems or seeding cover crops, Bayer is now rewarding farmers for what the company calls “climate smart farming practices.”

“It’s really as simple as signing a letter of interest. We then would look and see to make sure that they're qualified – there are actually rules around carbon accounting – so we want to make sure that they are qualified and then, from there, it was just as simple as identifying the acres where the farmers are going to adopt these practices. On the back end, once we verify that via remote sensing, we will actually provide them just a flat, per-acre payment.”

Bayer Carbon isn’t alone. Indigo also dove into the idea that farmers can get paid for carbon sequestration. In turn, the company now has a carbon program, as well.

Nutrien Ag Solutions, a large ag retailer, also launched into the carbon credit space. Just this month the company announced it’s shaping its own carbon pilot program for 2021.

“We actually think agriculture is the solution to greenhouse gas emissions,” says Mike Frank, CEO, Nutrien Ag Solutions.

Nutrien says today, farmers can sell 1 ton of validated carbon offset for $10 to $20 per ton. Frank thinks there is $10 to $40 per acre more value farmers can capture, just by measuring the carbon impact of their operations.

Nutrien says the list of major companies and corporations wanting to become carbon neutral will become much more structured over the next five years, and agriculture will play a key role.

“We actually believe that agriculture could produce probably a third of the world's carbon offsets over the next 10 years,” adds Frank. “We think this is going to be a $100 billion industry, and we think agriculture can get rewarded for what it's doing today and what it can do in the future.”

Trueterra, the sustainability division of Land O'Lakes, also announced plans in early December to launch a pilot program that will go through 2022. Truterra is partnering with Nori, a startup company using blockchain in the carbon removal marketplace. READ MORE