Carbon could be the new crop for farmers
Rick Clark was out working the field on his farm near Williamsport, Ind. one day, 16 years ago. Then a one-inch rain rolled in.
He didn’t think anything of it at the time, he said. That is, until the next morning, when Clark drove his truck out and saw the soil streaming from his farm into a nearby ditch.
That was the exact moment he knew: The way he had farmed his land for decades was draining the life from it.
“That’s when it just hit me,” Clark said. “It’s time to make a change.”
Clark is now one of a growing number of farmers across the Midwest practicing regenerative farming, a method that relies on natural practices to promote soil health. And since he took up these practices, he has also taken to the road in hopes of sharing their benefits and getting others on board.
President Joe Biden has the same goal.
Biden has pledged to support regenerative practices as part of a plan to cut greenhouse gas emissions from agriculture and help capture those from other industries.
Regenerative farming not only has been proven to mitigate erosion and boost soil health — it may also be a huge opportunity to reduce the U.S. carbon footprint, gaining popularity among environmentalists as a potential tool in the fight against climate change.
Farming and the U.S. Department of Agriculture have not figured heavily in past efforts to combat climate change, but the industry’s national scope “should make it a lynchpin of the next administration’s climate strategy,” according to a memo from a group of Biden transition team advisors, Obama-era officials and climate scientists.
When people think of climate change, they probably envision smokestacks belching pollution into the air. But agriculture is responsible for 10% to 12% of the world’s emissions.
Regenerative practices, some studies suggest, could sequester as many as 11.4 gigatons of carbon dioxide worldwide each year. That’s the weight of 45 billion people or about six times the world’s population. It’s also nearly one-third of all emissions from energy consumption across the globe in 2019, according to the International Energy Agency.
Agriculture cannot do it all, but it can be a fast and affordable part of the solution.
“We’re at a point where we no longer have options, and we have to do all of the above for every sector,” said Debbie Reed, executive director of the Ecosystem Market Services Consortium, a group working to develop a system to reward farmers. “That’s true for the agriculture sector.”
But the question Clark, Reed and Biden are all trying to answer — the question of how to get farmers on board — may prove tricky. Switching to regenerative farming methods does not just require a complete overhaul of the way a farmer works his or her land, it could also come with upfront equipment costs and a few years of trial-and-error.
One solution the Biden administration and others are considering is a carbon market. Biden first said in 2019 during town halls that farmers need to be rewarded for climate-friendly practices, and he now is leaning into markets as a mechanism to pay farmers for the carbon they capture in their soil.
There’s hope, experts say, that markets could be the push farmers need to take up regenerative practices such as not tilling the soil, using cover crops or applying rotational grazing at a scale and speed not before seen. Seeing the potential, some private carbon markets have already moved into the space and are setting up shop.
But there are still questions to be answered and concerns to be addressed surrounding the concept, and advocates and farmers alike aren’t yet sure if they’re on board — or whether, in the long run, it will prove effective enough to last.
“Right now, I’m feeling the optimism is outpacing the reality or the potential,” said Hannah Birge, director of agriculture programs at The Nature Conservancy. “No carbon payments are going to deliver us from climate change, but there is promise here if we don’t squander it because we get too excited.”
Creating a vast carbon sink
Agriculture captures carbon, that’s a known fact. It goes back to elementary school lessons about photosynthesis: Plants harness the energy of the sun to draw in water from the soil and carbon dioxide from the air and then convert it into food.
Some types of agriculture, however, do it better than others. And, according to experts, regenerative agriculture does it best and creates a vast carbon sink.
Methods such as planting cover crops to keep the soil always protected by plants, raising livestock on pasture, not tilling the land, which can release carbon, and reducing the application of chemicals all allow the soil to build its microbiome and the ability to store carbon.
Indiana is a leader in the Midwest and across the country when it comes to the percentage of its corn and soy acres that are planted with cover crops in the offseason. Still, only 8% — or about 800,000 of Indiana’s more than 11 million row crop acres — were blanketed with cover crops in 2019, according to the state.
Implementing regenerative practices on just 40% of Indiana’s farm acres could sequester up to 10% of the state’s total carbon dioxide emissions annually, according to Sean Mobley with The Nature Conservancy’s Indiana chapter. “We could more than double that,” he added.
Regenerative farming is good for more than just the climate: It makes for an overall healthier farm.
With cover crops, no till, better nutrient management or crop diversity, farmers can better keep their soil from washing away and allow more nutrients to absorb into it. That makes a farmer’s fields more resilient to flooding or drought because of its ability to soak up and hold water.
“We were seeing the erosion,” said Gordon Smiley, now a regenerative farmer in Decatur County. “I need that soil back because that’s my livelihood. So I don’t want to throw it away. I don’t want it to get away from me.”
‘If they fail, the family fails’
Still, regenerative farming is a niche practice. If it has so many benefits, why aren’t all farmers doing it?
The first barrier is always economics, said Craig Faut, a row crop farmer who does not till his fields and has started to experiment with cover crops. Long-term, regenerative practices could help farmers’ bottom lines, but the trial-and-error period to get there may not guarantee yields.
“You have one shot each year to do something and get it right,” Faut said. Though people may want to try something new, “if they fail, the family fails.”
Farmers likely will need new equipment to plant without tilling. The seed for cover crops is a new expense, too. And it may take as many as three to five years before farmers see the benefits and savings from regenerative practices.
A couple decades ago, when Brian Thompson first saw he was losing his soil, he tried not tilling in some areas on his corn and soy fields that regularly flooded. But he and his son had no clue what they were doing, and they failed a lot.
“Farmers, we’ll do it for a year or two and then have a not great year,” said Thompson, who farms more than 4,000 acres of corn and soy in southern Indiana. “It’s hard to do it again after that.”
He managed to stick with it, and now does not till any of his acres. But lots of farms aren’t able to do that, and many others don’t even start.
That’s because one of the biggest obstacles may be a change of mindset. Farming isn’t just a job, according to Leslie Fisher, who works in the Benton County Soil and Water Conservation District, it’s a way of life.
Nearly 95% of the land in Northwest Indiana county is in traditional row crops, the most of any county
in the state. And it’s very fertile farmland, too, Fisher said: “We can just throw seed out there and it will survive, so this is not an area known to be on the forefront of change.”
But the idea of cover crops or livestock on the land is nothing new. That’s how the land was farmed before what is known today as conventional or industrial agriculture.
“Many of our older farmers were the ones convincing dad and grandpa that it’s time to sell the livestock and drain the land and get it into crops,” said Fisher, who grew up in the area. “So fast-forward to now and trying to transition them back to cover crops — to them, that’s going backwards and not going forward.”
Biden’s solution: carbon markets
That’s where carbon markets come in.
As more greenhouse gases enter the atmosphere and more companies pledge to go carbon neutral, interest in creating a market for carbon capture through agriculture is growing. Agriculture is now being seen by many as an untapped resource, and carbon markets the way to tap it.
“I think the potential is boundless, really,” said Mobley of The Nature Conservancy. “If it can work in Indiana, it can work anywhere in the country — politically, programmatically, with on-the-ground implementation, all of it.”
At its simplest, carbon markets pay farmers for switching to regenerative practices, providing a financial incentive to help shrink the world’s carbon footprint. When a farmer implements a new practice such as cover crops, a verifier comes in and calculates how much carbon is being captured. It then will certify that work and create a credit to sell on the market, most often to corporations looking to offset the carbon emissions they aren’t able to cut in their own process.
Farmers have previously been limited from participating in carbon markets, often due to high costs and poor measurement tools. Most land-related offset practices have focused on planting trees and how forests are managed.
The incoming administration is proposing to create a carbon bank at the U.S. Department of Agriculture, something it could do without the approval of Congress. The bank would buy credits from farmers and then sell them to corporations for offsets. That concept has won support from a variety of farm, food, forestry and environmental groups.
Several other private carbon market programs have popped up, both from companies and non-profit organizations that are developing their own platforms.
The Nature Conservancy is piloting markets in Nebraska and Minnesota and is considering one in Indiana. The Ecosystem Services Market Consortium is a nonprofit founded by food and agribusiness companies such as General Mills, McDonald’s and Cargill that is already signing up farmers and plans to launch a broad-based market in 2022. Last year, IndigoAg first invited growers to make 10-year commitments, and the company has already seen practice changes implemented on more than 1 million acres.
Kari Hernandez, the global head of carbon operations for IndigoAg, said there is one core aspect across all these efforts.
“I think it really comes down to trust in the underlying asset,” Hernandez said. “A carbon credit is an intangible asset that is meaningful and scientifically backed.”
But establishing that trust isn’t easy, Hernandez said: “There are many different approaches to what you might call a carbon credit.”
‘The science isn’t there yet’
There’s no question that regenerative practices increase carbon storage in the ground. There are a lot of questions, however, about how to measure the amount that’s being captured and credited fairly and accurately, said Jeff Dukes, executive director of the Climate Change Research Center at Purdue University
“The science isn’t there yet,” he said. “The danger is relying on ‘phantom carbon,’” or carbon that has not actually been stored, according to Dukes.
Carbon sequestration in agriculture depends on a variety of factors, said Birge, who oversees The Nature Conservancy’s market pilot program in Nebraska. They include soil type, current soil health, geography, climate and weather, what combination of practices are being done, etc.
There are different approaches on how to account for all these things and come up with a number: one relies on modeling and the other on sampling.
The modeling approach is much easier to do on a large scale, Birge said, but at the expense of accuracy — models are better at estimating carbon captured at a county level, but not the acre-level measurement needed to pay farmers.
Sampling, on the other hand, is much more accurate. It also is much more expensive —as much as $2,000 to $3,000 each time — and difficult to do in a comprehensive way. Multiple samples need to be taken at multiple depths on each field, which would be hard to do for every farm, every year.
The sampling approach could lead to more credits per acre, but farmers likely wouldn’t see that return because of the additional cost to get that data, said IndigoAg’s Hernandez.
IndigoAg uses a hybrid approach. A subset of acres in their program is sampled, which helps “ground truth to the model and increases its accuracy,” Hernandez said, “but then lets us scale the model in a manageable way.”
As multiple companies and organizations work to develop their own markets and sign up farmers, it’s creating just as many ways to measure and verify carbon. That’s a problem, said Mobley with Indiana’s nature conservancy.
“Everything is a bit fragmented right now,” he said. If carbon is measured differently between the markets, that could leave some farmers getting paid more money for not storing as much carbon or others getting paid less despite having a more significant impact.
“The biggest need is to establish a single system that creates a baseline for models and measurements for anyone who is interested,” Mobley said. That also includes more clearly defining what constitutes the various regenerative practices.
Mobley and others say they think creating that consistency is a potential role for the government. It’s not creating regulations for farmers, said Leif Fixen, who manages a Minnesota pilot project. Instead, he said the government can establish standards that markets must meet to lend legitimacy to the carbon credits. That way companies will trust the offset they are purchasing to truly meet their needs.
Hernandez equates it to the stock market.
“The reason we can trade stock is because we understand companies are measuring and reporting costs, revenue and investments in the same way,” she said. “So that’s what we need to get to for carbon markets.”
Farmers question logistics
Even if the science were to be developed tomorrow, there are still some logistics Biden’s team may need to hammer out before gaining farmers’ trust on a federal carbon market.
One of the primary questions farmers have is how much money a carbon market is actually going to put in their pockets.
IndigoAg offers about $15 a ton for carbon sequestered in soil. On the high end, that means the potential is significant: If a farmer with 10,000 acres sequesters at least one ton of carbon per acre, they could bring in an additional $150,000 each year.
But that’s assuming a successful year of implementing regenerative practices and does not take into account the costs that go into simply getting started.
At the same time, after about 10 years, the amount of carbon the soil can sequester starts to lessen, leading to even smaller income from carbon credits. After about 20 or 30 years, they may not receive payment at all.
“For better or worse, we don’t and can’t guarantee any money for farmers,” Hernandez of IndigoAg said. “It depends on the outcome, on the market and on what they’ve done for their farm.”
The current price for carbon, some experts have said, is likely too low to practically combat climate change. A World Bank report suggests prices would need to rise to at least $40 or $80 per ton to drive “transformational change” and get enough farmers on board to realistically bring down emissions.
This uncertainty of payment is a concern for some farmers, who often live year-to-year with a tight bottom line. Financial assistance from conservation or water quality programs may help farmers get over the initial hump of starting regenerative practices, but an even bigger incentive may be the promise of long-term financial savings that come with switching to regenerative methods.
A few years into the process, the need for fertilizer, fuel, and labor falls away. Rick Clark, for example, said he currently saves about $800,000 each year on inputs.
“Now I don’t know about you, but that’s serious money,” Clark said. “And that helps get you toward the success of making this system work.”
Another point of concern is that carbon markets may benefit some farmers more than others.
For one, some farms may not be able to sequester as much carbon as others, based on existing farm attributes and whether the regenerative practices they implement are successful. And if prices for carbon fall by too much, it may not be a viable option for smaller farms with fewer acres.
Experts also point to farmers like Clark, who have been practicing regenerative agriculture for more than a decade. Those growers wouldn’t be eligible for the carbon market, as it pays farmers for new practices, not those they’ve already undertaken.
“If a farmer is already doing soil health practices, there really won’t be much more or different they can do,” Fixen of the Nature Conservancy said. “So, is there any additionality that can be marketed? We really want to make sure we aren’t punishing those early adopters.”
Not the tool, but a tool
As the Biden administration takes on carbon markets, it will need to answer questions of accuracy, legitimacy and fairness to gain farmers’ trust.
Despite the remaining questions, experts seem to agree that carbon markets shouldn’t be abandoned as a potential solution for fighting climate change. Many assert that the measure could at the least bolster existing efforts.
When implemented alongside state and national programs that provide research and financial assistance to farmers getting started, carbon markets can be especially effective, said Jenny Hopkinson, senior government relations representative for the National Farmers Union.
“Carbon markets aren’t the tool,” Hopkinson said, “but they’re a tool.”
Restructuring existing programs may also prove fruitful, as some farmers point out that those like crop insurance, for example, can actually disincentivize practices like cover cropping.
“In agriculture we’re focused on a yield. If I get more bushels per acre than you do, I’m a better farmer,” said regenerative farmer Jamie Scott. “And I don’t think that’s true… We may be able to put a lot of money in something to get top yield, but that doesn’t mean it’s sustainable.”
Some farmers have hopes that food grown through regenerative agriculture may find its own space in the marketplace, possibly through a label like that used for organically grown food. That, however, would require standardizing regenerative agriculture, which the industry hasn’t quite defined yet.
And even more farmers, including Rick Clark and regenerative farmer Ray McCormick, say sharing the message of regenerative farming and soil health is crucial to spreading its benefits. That’s why Clark has spoken on the practice in Russia, France, Spain and 25 U.S. states.
“It has given a lot of farmers hope that there’s a different way to farm,” McCormick said. “That’s
why this whole movement has been driven by farmers, not universities, not the government. This has all exploded, because of the work of farmers trying to be innovative.”
Biden’s plan for a national carbon market may not yet answer farmers’ questions, and it likely won’t be the end-all, be-all to get farmers on board with regenerative farming, Fixen said, but that doesn’t mean they should walk away from it altogether.
“Will this be the thing that tips the scales? Everyone is like ‘carbon markets,’ it’s the thing — but it likely isn’t the thing,” Fixen said. “This can’t be done in a vacuum; it will take everyone working together and trusting each other. We don’t have all the answers, but we’ll get there.”