Rod Nickel and Karl Plume

WINNIPEG/CHICAGO (Reuters] – Global agriculture giants are now competing for the attention of farmers by encouraging them to sign up for programs that reduce carbon dioxide emissions from the atmosphere.

Fertilizer producers Nutrien (NYSE:) Ltd. and Yara are agribusiness giant Cargill Inc. and seeds and chemical dealers. Corteva (NYSE:) Inc Bayer AG (DE) pay growers for every acre dedicated to sequestering carbon underground. According to executives, the ambitions of these companies extend from America to Canada and Brazil to Europe, Europe, India, and Europe.

The farmers capture carbon by using less fertilizer, planting more off-season crops and tilling less. The farmers log all their actions on digital platforms in order to create a carbon credit. The credits can be used by agricultural companies to offset climate impacts from other areas of their business or sold to companies that want to lower their carbon footprint.

The United Nations estimates that agriculture is responsible for almost 40% of the earth’s total land cover and 17% global emission. Changes to farm practices could sequester as much as 250 million tonnes of carbon dioxide annually in the United States, or 4% of the country’s emissions, according to a 2019 report https://www.nap.edu/catalog/25259/negative-emissions-technologies-and-reliable-sequestration-a-research-agenda by the National Academy of Sciences.

As governments and companies attempt to reduce greenhouse gas emissions and combat global warming, agriculture is increasingly being seen as an ally.

According to more than 12 interviews, farmers and analysts, some farmers are suspicious of the massive agricultural companies’ programs. They see it as an attempt to extract their data, which will then be sold to them. Some critics also question the possibility that farmers could guarantee their carbon storage underground. Simply turning the soil will not make it impossible to store it.

However, sequestering carbon can be a source of new income for farmers who want to diversify their business in volatile industries. Such programs allow farmers to reap the benefits of healthier soils, which are more reliant upon chemicals.

Matt Tracy, a central Illinois farmer, wanted to get a reward for planting cover crops and reducing the tillage. He enrolled 548 acres into Cargill’s RegenConnect program. Bayer offered a comparable one, but it was too short-term.

Even after Bayer began giving sign-up bonuses up to $1,000, his satisfaction with the decision is still strong.

I didn’t want my contract to last too long. “I want to find out how it turns before I go full-throttle,” he stated. These programs are going to be more in demand and will make us more money than we do now, I think.

Alejandro Plastina associate professor in economics, Iowa State University, stated that agricultural companies are able to measure success by the amount of land farmers dedicate to their programs as well as the willingness to buy credits from other corporations. However, most of the corporate promises are unclear and acres allocated to pilot projects remains small.

Plastina explained that agricultural companies can showcase their social responsibility at a minimal cost and farmers will be more loyal to digital platforms. This could result in increased farm supply sales.

Plastina explained that “it gives (ag businesses) the opportunity to associate their brands with caring about the world.” “I do not expect them to be able to make money with these projects any time soon.”

EXPERIENCED EARLY LEADERS

Bayer has 1.5 million acres in sustainability agriculture programs around the world, most notably in the United States.

Bayer’s program, which compensates growers when they plant cover crops and reduce tillage rather than pay for verified carbon sequestered by them, is unique.

Leo Bastos from Bayer’s Carbon Business said, “The idea was get something farmers feel comfortable and sure of so that they can see how much they can make.”

Nutrien’s program secured more than 200,000 acres across the United States and Canada in this past year. Nutrien is expecting to turn a profit because of its enrolment, which involves the sale of high-margin products such as crop treatments made from insect-killing bacteria and controlled-release fertiler. Mark Thompson, Chief Strategy Officer and Sustainability officer, stated that Nutrien will make a profit immediately.

Thompson stated that such products can also yield higher yields for farmers.

Cargill plans to cut its supply chain emissions by 30% by 2030. This is partly achieved by enrolling in 10 million acres of small-scale regenerative agricultural programs.

Corteva and Indigo Ag, a farm technology and service provider, have partnered to reward farmers who manage their crop nutrients better. This could lead to increased sales of nitrogen stabilizers which can be used more efficiently.

Chris Harbourt from Indigo, Indigo’s global chief of carbon, stated, “Corteva considers that to be a way for them to deepen their relation” with farmers.

Norwegian company Yara, based in Norway, is currently running a pilot programme on 50,000 acres of U.S. land and hopes to contract 1,000,000 acres by the end of this year.

According to Alex Bell (chief executive of Agoro Carbon Alliance), Brazil and India could produce larger amounts of carbon sequestered than the United States if they grow multiple crops every year.

Bell stated that Agoro is able to offer farmers a longer contract, for ten years. This should result in higher carbon prices.

Bell explained that it was difficult for farmers to accept this, but that is exactly what buyers value. Bell said some Americans are reluctant about locking in long-term contracts as the average farmer is nearing retirement.

Bell stated that Yara launched its program at a loss, and could break even in three years.

The programs are not well received by farmers.

Gunter Jochum from Manitoba, who is president of Western Canadian Wheat Growers Association said that he smells complete bullshit. Ag companies can access valuable data in return for small amounts of payment to farmers, he stated.

Canada’s National Farmers Union submitted that the program’s principle was “essentially impossible to work with” since carbon sequestration in warm climates is not permanent.

Justin Topp, a North Dakota farmer decided to try carbon farming. Nutrien offered him 12,000 acres of land, which is 80%, and he chose it over the other four.

Everyone is talking about it. “I’m interested in how it turns out.”