Carbon as an agricultural product

By on June 4, 2021 0

Agriculture continues to become more complex every year.

Farming families are no longer content with just cultivating the land, planting the seeds, watching them grow, harvesting and selling or using the harvest. Today it’s about science, technology, marketing, water quality and environmental stewardship, global trade and emerging markets – and the list could go on. again and again.

One of the hot topics today that many farmers are trying to understand better is the area of ​​carbon credits and carbon sequestration.

Reducing environmental impacts and achieving climate sustainability is a broad topic of discussion and agriculture has become a central part of the discussion as the agricultural sector is able to provide natural climate solutions.

Experts suggest that agricultural producers across the country are able to reduce carbon emissions by implementing “climate-smart” farming practices that sequester carbon.

Recently, an article by Peggy Hall, associate professor of agricultural and resource law at Ohio State University, looked at the idea of ​​carbon as a commodity for agriculture.

Hall notes: “While carbon markets are not new, recent Congressional proposals and announcements by the Biden administration are sparking new interest in them. Some companies are actively seeking carbon trading deals with farmers, further fueling discussion within the farming community. “

Like everything, with a new idea comes many questions and concerns. The first is of course: do carbon sequestration practices have real potential as an agricultural product? Hall says it’s a tough question right now and the answers aren’t very clear yet.

In her article, however, she notes that there are answers to other questions, as well as resources that may be useful for those considering carbon markets for the first time.

Here’s what she provided:

• What is a carbon market? A carbon market is built around carbon credits generated by carbon reduction practices. As part of the farm, a producer who reduces the farm’s carbon emissions or captures the carbon through “sequestration” practices can earn carbon credits.

Like other markets, a carbon market involves a transaction between a seller and a buyer. The seller sells a carbon credit to a buyer who can use the carbon credit to offset or reduce their carbon emissions.

• Do carbon markets already exist? Yes, although they could be private markets with different names occurring in different regions.

Bayer Crop Sciences launched its carbon initiative last year, rewarding producers for adopting carbon-reducing practices that will help Bayer meet its goal of reducing its greenhouse gas emissions by 30% by 2030 Indigo Ag began making long-term carbon deals with producers in 2019, paying $ 15 per tonne for carbon sequestration practices.

Food companies and agribusinesses including McDonald’s, Cargill and General Mills have formed the Ecosystem Services Market Consortium, which will fully open its private carbon market in 2022.

• Are legal agreements involved? Yes. The use of a written agreement is standard practice in carbon market transactions, but agreements may vary from market to market.

Arrangements could address acceptable practices, calculation and verification of carbon reductions, including third party verification, sharing of data and records, pricing, costs of practices, minimum acreage and duration of the contract. .

As with other legal contracts, reviewing a carbon deal with a lawyer is a wise decision.

The Biden administration has expressed interest in developing a federal carbon bank that would pay producers and foresters for carbon reduction practices. The USDA would administer the bank with funding from the Commodity Credit Corporation.

Rumors say the bank would start with at least $ 1 billion to buy carbon credits from producers for $ 20 a tonne. The proposal is one of many USDA ideas outlined in the administration’s Climate 21 project.

• What does the Congress propose? The bipartisan Growing Climate Solutions Act would require the USDA to assess the carbon credit market, establish a third-party verifier certification program overseen by an advisory board, establish an online website with information for growers, and report regularly to the government. Congress on market performance, challenges for producers and barriers to entry into the market.

An initial allocation of $ 4.1 million to the program would be supplemented by $ 1 million per year for the next five years. The Senate Committee on Agriculture, Nutrition and Forestry has already passed the bill.

The Rural Forest Markets Act, also a bipartite bill, would help small private forest owners by ensuring market funding for forest carbon reduction practices.

• Is there opposition to carbon markets? Yes, and skepticism too. For example, dozens of organizations have urged Congress to “oppose carbon offset scams like the Growing Climate Solutions Act” and argued that agricultural offsets are ineffective, incompatible with sustainable agriculture, can consolidate further agriculture and increase dangerous pollution, especially in environmental justice communities.

The Institute for Agriculture & Trade Policy also criticizes carbon markets, saying that the prices of emission credits are too low and volatile, that leaks and offsets can lead to liability and fraud issues, that the tools of measures are inadequate, that carbon storage in the soil is ephemeral and markets undermine further. effective and holistic practices.

Nearly half of farmers in a 2020 Iowa Farm and Rural Life poll were unsure whether they were making money for carbon credits, while 17% said carbon markets should not be developed .

To learn more about carbon markets, the National Agricultural Law Center ( offers several resources and recorded webinars.

There are many other resources available, so do your homework. It seems there is more to discuss and learn about carbon markets.

Tony Nye is the state coordinator for the Ohio State University Smallholder Farm Extension Program and has been an OSU Extension Educator for Agriculture and Natural Resources for over 30 years, currently serving the County of Clinton and the Miami Valley EERA.

Leave a comment

Your email address will not be published. Required fields are marked *