The discussion of carbon markets for agriculture has been the topic of much discussion in the past year or so. That’s partly due to a change in presidential administrations and politics that favor such activities as carbon farming. But it also is being driven by the private sector. Large multinational, agricultural companies like Corteva and Bayer are well on the way to developing carbon marketplaces for farming. Others in the ag space are getting on board as well with programs and markets of their own.
Corteva is offering up to $5 to $20 per acre per year by introducing cover crops and/or reducing tillage on farms. The pilot program is available in Illinois, Indiana, and Iowa for 2021 and expanding to additional states in 2022. Bayer will pay growers $3 per acre for reduced tillage (strip-till or no-till), $6 per acre for cover crop adoption, and $9 per acre for adopting both practices. The Bayer program is available in 17 states — mostly in the Midwest.
The Buzz is Back
According to Michael Minton, an attorney for Orlando-based law firm Dean Mead, the idea of carbon farming was creating a buzz in Florida more than a decade ago but interest waned until more recently. Minton works closely with Florida agricultural operations and is based in the firm’s Ft. Pierce office.
“In 2009, we did our initial research on carbon markets for agriculture,” Minton says. “I wrote an article at the time based on the research and the potential tax implications of carbon credits. Back then, Gov. Charlie Crist had a lot of interest in establishing a carbon market for Florida, but the interest in it waned, and it really has not progressed as much as we would have hoped in the past decade.
“But that could be changing now with a new president and even some on the conservative side of the aisle expressing interest in carbon markets. I think people recognize it as a way to let market-driven forces encourage growers to adopt practices that help capture carbon. We are excited about the prospects for agriculture as this plays out and markets are developed.”
The law firm is currently working with a few clients to investigate the potential of establishing credits for certain farming practices. One example is the Florida dairy industry, which is covering waste lagoons on farms to capture methane and carbon. The U.S. dairy industry is involved in a larger “Net-Zero Initiative” to achieve carbon neutrality, optimized water usage, and improved water quality by 2050.
According to TerViva, a pongamia tree can sequester 115 metric tons of carbon per acre over its lifetime. Photo by Peter McClure
Pongamia Potential?
While some specialty crops that rely heavily on tillage might find it harder to develop a niche in carbon markets, others that are more permanent crops could fare better. Forestry and citrus, for example, have potential but still need some questions answered and markets developed.
Pongamia, an alternative oilseed tree crop, is gaining interest in Florida, particularly from the state’s citrus growers who have been battling HLB. The trees are now being planted on old citrus grove land and grow well in Florida’s environment.
TerViva is the firm working with growers to plant pongamia and create markets for it. Recently it announced a deal to work with Danone, a manufacturer of plant-based and specialized nutrition products, to develop new food products that utilize pongamia oil and plant protein.
TerViva is currently collaborating with Cultivo, a start-up that unlocks sources of natural capital for landowners and provides pongamia growers with new revenue streams through the issuance and sale of carbon credits.
“A pongamia orchard in Florida can sequester 115 metric tons of carbon per acre over its 30-year lifetime,” notes Nathan Chan, Sustainability Manager at TerViva. “We work with growers to register their pongamia plantings into agroforestry carbon projects, develop specific practices to encourage carbon sequestration, and manage the monitoring, reporting, and sale of carbon credits so farmers can focus on growing pongamia.”