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Carbon Farming: The Promise and Pitfalls of an Emerging Industry

By ASFMRA Press posted 04-12-2021 09:24 PM

Cover_Crops.pngThere’s a growing buzz in farming and the media around regenerative agriculture. While interest in carbon farming is expanding, the rate of adoption remains low due to unfamiliarity and the cost and risk involved in transitioning growing operations. That may change, however, with government and businesses alike committing to creating incentives for farmers to adopt practices designed to improve soil health and potentially increase the amount of carbon in the ground. The arrival of agriculture-oriented carbon marketplaces, where buyers pay farmers for the carbon they capture, could also lead to a faster uptake in regenerative agriculture practices.

According to Ryan Stockwell, Senior Manager of Partnership and Grower Advocacy for Indigo Ag, the basic principle behind carbon farming is, “the longer you have something green and growing, the more you have photosynthesis occurring and the more carbon you have getting drawn out of the atmosphere and getting put into the soil.” Of course, the more carbon that you put into the soil, the more there is to sell through a carbon marketplace, which is why companies like Indigo Ag and Nori are invested in helping farmers transition to regenerative agriculture practices like cover cropping and reduced or no-till farming. The carbon marketplaces make money off of each transaction, while offering farmers the prospect of an additional revenue stream.

A farmer interested in selling carbon can enroll fields in a carbon marketplace. After signing up, the farmer provides the marketplace with relevant data and begins to implement regenerative agriculture practices.

“Generally speaking, the type of data we need field by field and year by year are tillage practices, cover crop practices, liming, burning, fertilizer use,” explained Radhika Moolgavkar, Program Manager for Nori, a carbon marketplace company based out of Seattle. This information helps the marketplace determine how much carbon the farmer will sequester with their new practices.

The farmer then goes through a third-party verification process to make sure that “the data that’s being provided to us is reliable and replicable, that farmers have implemented the practice that they say they have, and that they implemented at the switch date they provided,” said Moolgavkar. The verifiers will also check for evidence of the farmer’s former practices.

After the verification stage, the farmer can begin selling certified carbon credits. How long could that process take? “The short answer is a little over a full year from when you enter into the program,” said Stockwell.

Trey Hill, owner and manager of Harborview Farms in Maryland, has already earned $115,000 selling carbon credits after participating in the pilot program for Nori’s marketplace. “I had some ground grandfathered in, so I got paid for multiple years of carbon on that ground, based on prior practices,” said Hill, who thinks that carbon farming still has a way to go before it makes financial sense. “I don’t think there's much money in it. Everyone is very excited about it, it’s in every paper and magazine... But $15 an acre doesn't even touch our government subsidies and it doesn't cover the cost of seed for cover crops.”

Ultimately, Hill thinks that more financial support through stacked incentives and higher carbon prices will be needed to convince farmers to transition to new practices.

Farm_Soil.pngHill is still an advocate of carbon farming for the way it benefits soil health, though he acknowledges that regenerative agriculture practices can be difficult in some ways. For instance, planting through an extended cover crop that captures a lot of carbon can be a challenge. “The ground has very high humidity because it's covered, and you run into big root masses, big stem masses and then you also get things that can tangle if you get into any of the viney crops, like vetch.” 

Loren Poncia, who runs Stemple Creek Ranch in California, is another practitioner of
 regenerative agriculture. Like Hill, he believes carbon marketplaces aren’t necessarily worth the effort yet, though he also sees potential down the line if the value of credits were to rise. 

“I would love to sell some carbon credits, but right now they’re way too cheap to even mess with,” he said. Poncia and Hill also share concern about the lack of standardization in the current crop of carbon marketplaces.

“I’m hoping that the new administration sets up standards for the carbon markets so that no matter who you go to, we know that it’s going to be accepted,” added Hill.

Indigo Ag and Nori are both confident that prices for carbon will increase as the market matures, making carbon farming a more lucrative revenue stream for growers. However, Moolgavkar sympathizes with growers who are hesitant to jump into regenerative agriculture. “The cost and the time and the learning to pivot to these practices is not insignificant, and so ensuring that farmers have the base and financial wherewithal to do that is really important,” she said.

As for standardization, both Stockwell and Moolgavkar believe it’s unnecessary for the government to impose rules on the young carbon markets.

“Carbon markets will get known for the level of quality that they’re providing,” noted Stockwell, “and that information will be helpful for growers as they consider where to sign up, and for buyers in where they need to purchase.”

For farmers who are curious about regenerative agriculture, there is a growing pool of resources, including other farmers who have already implemented regenerative practices.

“Find someone locally who has started doing this, or a group of growers, and just start asking questions and learning from them, because then it’s going to be really applicable to your area,” recommended Stockwell.

There are many organizations and government agencies that offer support to help mitigate some of the financial risk. Hill, for instance, makes about $50 per acre on his cover crops through Maryland’s Cover Crop Program. Poncia has also received funds from the California Healthy Soils Initiative to support his regenerative ranching efforts. With the attention that carbon farming is receiving, there's a good chance that more programs will emerge to help farmers with adoption and implementation.

With companies like Bayer, Cargill, Land O’Lakes, and others investing in sustainability and exploring carbon trading themselves, it’s likely that an increasing number of farms will begin implementing regenerative agriculture practices as time goes on. Meanwhile, carbon marketplaces like Nori and Indigo Ag will continue to streamline their processes and improve the experience for participating farmers.

“I think it's the future of farming,” says Hill. “I think we're all going to have to farm this way moving forward, it’s just about figuring out the road map to incentivize farmers.”