By Jacob Bunge | Photography by Rachel Mummey for The Wall Street Journal
U.S. farmers make their living raising crops from the soil each
year. Now, some are getting paid for putting something back into
their fields: carbon.
Big agriculture companies including Bayer AG, Nutrien Ltd. and
Cargill Inc. are jockeying with startups to encourage crop
producers to adopt climate-friendly practices and develop
farming-driven carbon markets. Those efforts would let retailers,
food makers and other companies offset their greenhouse gas
emissions by paying farmers for their fields' capacity to withdraw
carbon dioxide from the atmosphere and trap it in the soil.
The concept envisions the U.S. Midwest's swatches of cropland
doing double duty as a vast carbon sink. Plants' process of
photosynthesis withdraws carbon dioxide from the air, combines it
with water and sunlight to produce energy, and ultimately embeds
carbon in dirt through roots, while releasing oxygen back into the
atmosphere. Soil, if left undisturbed, can retain the converted
carbon for years.
Agricultural companies, long criticized as environmental
villains, say that paying farmers to maximize those natural
processes can put the scale of modern farming behind a potential
climate solution. Farmers, following half a decade of lean crop
prices, are contemplating a possible new source of income that is
less dependent on weather and agricultural commodity markets. The
Environmental Protection Agency has estimated that the agriculture
sector accounts for 10% of U.S. greenhouse gas emissions.
President-elect Joe Biden's administration also plans to pursue
the concept. Mr. Biden said this month that under his
administration, the U.S. Department of Agriculture will direct
federal conservation payments to farmers who use their fields to
capture more carbon.
There is no U.S. federal requirement for companies to offset
their greenhouse gas emissions, whether by buying credits from
farmers or other means. But some companies say they are voluntarily
looking for ways to reduce or eliminate their carbon footprint, to
attract environmentally conscious consumers and investors, and
pursue their own corporate missions.
In September, while other Iowa farmers were tilling their fields
after harvest to help combat weeds, Kelly Garrett headed out to
plant again. The wheat and rye he sowed on his farm near Denison,
Iowa, won't be harvested and sold. Keeping his fields covered with
growth over the winter months, he said, keeps his soil enriched and
boosts the quantity of carbon dioxide his fields can pull from the
atmosphere. In the spring, he plants his typical crops into the
It is also padding his bottom line. In early November, Mr.
Garrett posed in one of his corn fields with an oversize check for
$75,000, proceeds from selling 5,000 carbon credits that his farm
generated through a program being developed by the agricultural
startups Nori LLC and Locus Agricultural Solutions.
"There's a lot of money to be made here for farmers," said Mr.
Garrett, who adopted carbon-trapping practices on his farm several
years ago to help enrich his soil.
The buyer of Mr. Garrett's carbon bounty was Shopify Inc. The
e-commerce platform used the carbon reductions generated by Mr.
Garrett's farm to help offset carbon emissions from the boats,
planes and trucks transporting goods sold through Shopify's
platform during the Black Friday/Cyber Monday weekend of Nov. 27 to
Shopify's Shop Pay payment system automatically offsets
emissions associated with purchases. Stacy Kauk, director of
Shopify's Sustainability Fund, said that and other efforts have
helped draw more than 60 million users to the system. "Customers
are voting with their wallets and supporting companies that align
with their values," she said.
Some agricultural companies, including Bayer and Nutrien as well
as startups like Nori and Indigo Ag, aspire to be carbon middlemen,
offering products and services to develop platforms where
farmer-generated credits can be bought and sold. Others, including
Cargill, Corteva Inc. and Archer Daniels Midland Co. are
facilitating and funding farmers' efforts as a way to burnish the
companies' own climate commitments and those of their customers,
such as grain buyers.
Farmers that participate in the carbon credit programs so far
have generally received between $7 and $40 per acre, depending on
farmers' practices. The companies say those practices can be
verified through data beamed from tractors to online farm
management systems, and by monitoring fields with satellites and
soil tests. A typical Iowa corn farmer this year will earn $49 to
$246 per acre, and between a $28 loss and a $172 profit for
soybeans, according to Iowa State University analyses.
"The only way this will work is if there is real revenue on the
table for farmers," said Emma Fuller, director of sustainability
science for Corteva's data science unit Granular, which is helping
manage farmers' carbon data.
Some in the food industry are wary of investing heavily behind
still-new scientific models for measuring farm-driven carbon
reductions, over concerns that the calculations could later turn
out to be faulty. And despite growing Farm Belt momentum, some
environmental groups are leery.
Jim Walsh, senior energy policy analyst for Food and Water
Watch, said that polluting companies could use carbon offset
purchases as a way to avoid cleaning up their own operations. Craig
Cox, senior vice president of agriculture and natural resources for
the Environmental Working Group, said that permanently converting
land to trees and natural grasses is a more surefire way of
sequestering carbon, since farmers' climate-friendly practices
could easily be undone if a field changes hands.
"If the practices disappear, are the credits refunded?" Mr. Cox
said. Carbon credit registries typically require legal commitments
from farmers and landowners to maintain carbon-capturing practices,
and can include monitoring periods, company officials said.
Mr. Garrett, the Iowa farmer, said he generated 22,745 carbon
credits by verifying through Locus and Nori his practices from the
past five years, like conserving irrigation water, spreading manure
as fertilizer and giving up tillage. He said he is committed to the
carbon-capturing practices, because they improve his soil quality
and crop yields enough to pay off even without carbon payments. He
said he believes climate change is producing more volatile weather,
such as the derecho storm system that leveled portions of his
cornfields last summer.
The proceeds from selling carbon credits to Shopify helped Mr.
Garrett offset his purchase this fall of 160 acres of farmland, he
said, and another buyer is ready to buy the remainder.
"If we sell all the credits, it'll pay for one-third of the
farm," Mr. Garrett said.
Write to Jacob Bunge at firstname.lastname@example.org
(END) Dow Jones Newswires
December 23, 2020 05:44 ET (10:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.