BY TAMMIE SLOUP
Farmers considering entering the carbon market likely have a lot of questions.
How much does it pay? What is the contract length? What technology is needed and how are results verified?
The good news is farmers can play a significant role in the reduction of greenhouse gas emissions without taking away land production.
But a question remains: at what cost to the farmer?
Since the Biden administration prioritized reducing GHG emissions – specifically by 50% by 2030 from 2005 levels – corporate America has begun setting sustainability goals, seeking nature-based solutions.
That’s where agricultural carbon markets come in.
The total market for soil carbon alone is $200 billion per year as companies want to utilize farmland to offset carbon footprints.
For farmers looking to improve soil health, carbon markets present an opportunity to reduce their carbon footprint and get paid. Lauren Lurkins, IFB’s director of environmental policy, walked attendees of the Illinois Farm Bureau Young Leader Conference through federal conservation and climate policy, latest developments in agricultural carbon markets, opportunities and challenges for farmers and IFB’s role.
“We are learning along the way and educating members along the way,” Lurkins said. “We want to make sure that the initiative is as beneficial to farmers as it possibly can be, and that is going to be a process.”
As the world of carbon markets continues to evolve, IFB is closely monitoring the movement to not only educate members, but play an active role in policy talks. “If people decide to voluntarily enter into it, we would really love for them to be as protected as possible,” Lurkins added.
Some of the practices farmers can implement as part of these voluntary programs include: cover crops, crop rotation, no-till/strip till and nitrogen management. Farmers are paid depending on the practices.
Lurkins cautioned farmers about the long-term contract commitments, with many lasting 10 years.
And there’s other issues for farmers to consider before signing a contract, including the verification process, additionality (for farmers who have already implemented practices), control for those in rental agreements, financial arrangements and technological needs.
“It’s not insurmountable but there’s work to do,” Lurkins said, adding the best route is for farmers to consult with a lawyer before entering into a contract.
Other questions to ask involve the data scope, data security, length of commitment, payment schedule and models.
“Just look at the contract; know the universe,” Lurkins said.
Keeping an eye on federal carbon pilot programs also will be important moving forward. USDA Secretary Tom Vilsack has said he’ll use billions of dollars from the Commodity Credit Corp. for a variety of efforts, including a proposed pilot program to test conservation practices’ carbon benefits.
On the science side, advancements are needed to find realistic outcomes, such as the true cost of carbon. IFB collaborates with experts in the fields of climatology, soils and carbon stock to keep apprised on the latest advancements in measurement and verification.
IFB recently adopted carbon market policy supporting market-based incentives that provide open, transparent and consistent measurement, certification and verification for carbon sequestration. The policy further supports various incentives. that, among other things:
- provide price transparency to market participants.
- recognize the true cost to adopt practice and that weather impacts are beyond a farmer’s control.
- address and limit data collection to only participating acres and five years of use.
- reserve any compensation from USDA programs as a result of the practice to the farmer.
- offer federal crop insurance premium benefits as one method for compensating farmers for implementing conservation practices.
“The elephant in the room is what will the federal government be doing, if anything, and is it happening now or later in the farm bill,” Lurkins said. “We need to figure out what that looks like and watch those pilots. The entire carbon credit ecosystem is still in the process of being developed.”
This story was provided by FarmWeekNow.com.