Farmers in Arkansas, Iowa, and North Carolina are about to take their place on the front lines in the fight against climate change.
A field of wheat sits in Brownsburg, Indiana on Mike Starkey’s farm on June 28, 2021. (NRCS photo by Carly Whitmore) Image Credit: Flickr/US Department of Agriculture
They’re part of a novel program launched by a giant Dutch bank paying farmers to shift over to climate friendly farming practices which can potentially take more CO2 out of the atmosphere and store it.
Spearheaded by Rabo AgriFinance, the US-based arm of the Dutch company, Rabobank, five farms across those three states will become test cases to determine whether these practices work.
If they do work, the program could open up new sources of cash for U.S. farmers and create ways to take more greenhouse gas-causing emissions out of the atmosphere.
It’s potentially a multi-trillion dollar windfall for U.S. farmers, especially given that the prices for carbon offsets in the European Union have climbed above 60 Euros per ton.
Across the U.S. farm belt big companies like Bayer, Cargill, Archer Daniels Midland, are racing to pay out money to farmers for adopting practices that can store carbon.
They’re joined by a handful of startups like Nori, Indigo Ag, and others who’re creating marketplaces or tools to measure and support farming practices that can store more carbon dioxide.
Iowa farmer Kelly Garrett made $75,000 from selling 5,000 carbon credits using a program developed by the startup companies Nori and Locus Agriculture.
“There’s a lot of money to be made here for farmers,” Garrett told The Wall Street Journal.
The Dutch company Rabobank has an American partner for its own carbon schemes in the U.S. It’s working with an Iowa-based company called Continuum Ag to help monitor the amount of carbon that’s being sequestered using these novel farm practices.
“We’re helping our clients monetize a natural feature of their farms — the plants’ ability to capture carbon equivalents from the air — while improving their fields with healthy, nutrient-dense, biologically-enhanced, carbon-rich soils,” said Cristian Barcan, the chief sustainability officer of Rabo AgriFinance. “The expected result is improved yield with lower costs and lower environmental impact.”
These new markets are also unlocking opportunities for soil health monitoring startups and carbon management companies like Continuum Ag and Cloud Agronomics.
Based in Boulder, Cloud has been named as the first methodology to issue carbon credits in Australia.
“At the end of the day, as people, we’re all interested in pulling greenhouse gases out of the air. And there’s no reason we shouldn’t be doing that, especially if people can be incentivized,” said Gabriel Sheets-Poling, the Chief Strategy Officer at Cloud Ag.
Monitoring and verification technologies like those Cloud Ag, Continuum and others are offering not just give buyers more assurance, but also provide meaningful information to farmers.
“We will know the impact of our practices on carbon in the soil. No one else in the marketplace I’ve talked to is doing it that way and measuring,” said John C. Barnes of Barnes Farming Corporation, a pilot participant in the Rabo Carbon Bank program. “Some of the practices we’re already doing, but our management team are going to have opportunities to be exposed to some new ideas, some cutting-edge practices, that maybe would not have been economical on their own but with carbon payments become feasible.”
Meanwhile, some companies are developing new treatments that can boost the carbon capturing power of farmland crops. That’s what the Australian business, Soil Carbon Co. has set out to do.
It’s raised roughly $6 million for its fungus-based treatment that helps plants produce more sugars to capture and store more carbon deeper underground.
“We’re putting an intermediary between the soil and the roots: specific types of fungi that live inside the plant,” company co-founder Guy Webb told AgFunder News. “We then take some of that sugar flow and in return get some benefits, but convert some of those sugars into a more stable form of carbon.”
While most people agree that soil carbon sequestration in farmland can be a solution that contributes to stopping global warming, it can’t be the only solution. And it may not even be the best solution.
Craig Cox, a senior vice president of agriculture and natural resources for the Environmental Working Group, told The Wall Street Journal that permanently converting land to trees and natural grasses is a better way of sequestering carbon more securely, since farmers’ climate-friendly practices could easily be undone if a field changes hands.
Buyers of carbon credits are lining up to pay out to farmers, despite the risks. For companies like Shopify, it’s a way to differentiate themselves from other e-commerce competitors and attract more users.
“Customers are voting with their wallets and supporting companies that align with their values,” Stacy Kauk, director of Shopify’s Sustainability Fund, told The Journal.