North American farmers profit as consumers pressure food business to go
green
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[December 03, 2020] By
Karl Plume and Rod Nickel
CHICAGO/WINNIPEG, Manitoba (Reuters) - Beer
made from rice grown with less water, rye planted in the off-season and
the sale of carbon credits to tech firms are just a few of the changes
North American farmers are making as the food industry strives to go
green.
The changes are enabling some farmers to earn extra money from industry
giants like Cargill, Nutrien and Anheuser-Busch. Consumers are
pressuring food producers to support farms that use less water and
fertilizer, reduce greenhouse gas emissions and use more natural
techniques to maintain soil quality.
Investments in sustainability remain a tiny part of overall spending by
the agriculture sector, which enjoyed healthy profits in 2020. They may
help to head off more costly regulations down the road now that
Democratic climate advocate Joe Biden was elected U.S. president.
Some companies, like farm retailer and fertilizer producer Nutrien , are
also opening new revenue potential for farmers by monetizing the carbon
their fields soak up. The companies say technology is improving
measurement and tracking of carbon capture, although some environmental
activists question the benefit of such programs and how sequestered
greenhouse gas volumes can be verified.
![](http://archives.lincolndailynews.com/2020/Nov/23/images/ads/current/fricke_christmas_sda.png)
Sustainable techniques farmers are adopting include refraining from
tilling soil at times to preserve carbon. Some are adding an off-season
cover crop of rye or grass to restore soil nutrients instead of applying
heavy fertilizer loads over the winter that can contaminate local water
supplies.
A study conducted by agriculture technology company Indigo Ag estimated
that if U.S. corn, soy and wheat farmers employed no-till and cover
crops on 15% of fields, they would generate an additional $600 million
by reducing costs, bolstering soil productivity or selling carbon
credits.
Indigo has a partnership with brewer Anheuser-Busch Inbev NV, which
plans to buy 2.6 million bushels of rice this year grown with less water
and nitrogen fertilizer than conventional rice. Anheuser-Busch said that
is up from 2.2 million bushels last year and accounts for 10% of its
U.S. rice supplies.
Bill Jones, the brewer's manager of raw materials, said farmers
voluntarily growing rice with a lower environmental impact along the
sensitive Mississippi River would be less disruptive to supplies than
having local authorities require such practices by legislating changes
to water and nitrogen use.
"We look at supply chain security. I see this gaining traction," he
said, noting that Minnesota and other U.S. states and conservation
districts worried about polluting the Mississippi are already
introducing limits on how much manure farmers can spread on
fields.Arkansas farmer Carson Stewart used the program for the first
time this year, earmarking his entire 340-acre rice crop to
Anheuser-Busch. Depending on milling quality, his rice may earn up to
$1.50 a bushel more than conventional rice, a premium of about 27%, he
said.
10 MILLION ACRE SHIFT
While companies expect Washington and Ottawa to grow more committed to
funding and regulating sustainable farming, industry sources and
activists said widespread adoption remains far off.
"They come with high up-front costs," said Giana Amador, managing
director at climate-focused NGO Carbon180. "We're seeing a huge
differentiation in quality among all these corporate commitments."In
September, privately held Cargill Inc said it would help North American
farmers shift 10 million acres to regenerative practices during the next
10 years by offering them financial support and training.
![](http://archives.lincolndailynews.com/2020/Nov/23/images/ads/current/culligan_sda_daily_FESTIVALS_2017.png)
Pushed by demand for greener foods from food companies that buy its
products, Cargill has already signed up 750 farmers to green programs,
representing 300,000 acres, said Ryan Sirolli, Cargill's director of row
crop sustainability. With projects like one that pays Iowa farmers to
leave soils untilled or to create field buffers to prevent fertilizer
runoff, Cargill hopes to cut 30% of its supply chain greenhouse gas
emissions over the next decade.
"We've done a lot to stop soil erosion. And we've had a reduction of 538
tons of CO2, which is the equivalent of taking 104 passenger cars off
the road," said Iowa farmer Lance Lillibridge, who estimates he will
earn about $37 an acre in a Cargill pilot project this year.
Environmental groups and consumer activists are sceptical about such
corporate sustainability pledges, noting that Cargill has not made good
on its promise to eliminate deforestation from supply chains by 2020.
As more premium-paying buyers emerge, more farmers will be enticed into
sustainable growing, said Devin Lammers, CEO of Gradable. The unit of
input dealer Farmers Business Network matches farmers using sustainable
practices with buyers such as Unilever, Tyson Foods and ethanol producer
POET.
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![](../images/120320PIX/busine39.jpg)
An agricultural combine, tractor and trailer, and semi truck are
parked alongside corn fields during the fall harvest as the
coronavirus disease (COVID-19) outbreak continues in Livonia, North
Dakota, U.S., October 26, 2020. Picture taken October 26, 2020.
REUTERS/Bing Guan/File Photo
![](http://archives.lincolndailynews.com/2020/Dec/03/images/ads/current/stclara_lda_SPONSOR_090519.png)
CARBON CREDITS
Some farmers are making money by verifying the amount of climate-warming
emissions their fields soak up and selling carbon credits to polluting companies
seeking to reduce their net emissions. Agribusiness companies call that a double
win for farmers as their fields become healthier and they earn extra cash.
This week, Saskatchewan-based Nutrien said it was launching a sustainable
agriculture program on 100,000 acres in the United States and Canada, with
expansion planned later in South America and Australia.
Nutrien Chief Executive Chuck Magro estimated that farmers will earn an
additional $50 per acre in profits under the program - $20 per acre for carbon
credits and $30 per acre worth of higher crop yields.
The announcement followed Nutrien's 2018 purchase of digital farming company
Agrible, which helps farmers log reduced emissions and water use. Magro said in
an interview that the aim is to enable farmers to use that data to sell carbon
credits. He noted that previous efforts produced meagre returns that were not
worth the effort for farmers who had to wade through hundreds of pages of
documents.
Agriculture accounts for 3% of the global carbon credit market, but that looks
to grow to 30% by 2050, Magro said. "We see carbon being the next big
agricultural revolution," he said.
Matt Coutts, chief investment officer of 100,000-acre Coutts Agro in
Saskatchewan, plans to sell carbon credits through Nutrien for up to 10,000
acres per year of canola, lentils and spring wheat. He expects they could
eventually generate at least C$75,000 in annual additional revenue.Ohio-based
start-up Locus Agricultural Solutions helped Iowa farmer Kelly Garrett create
22,400 tonnes in carbon credits by verifying his fields locked in about 1.4
tonnes per acre from 2015 to 2019. Garrett received a check for 5,000 of those
credits in November, after e-commerce platform Shopify bought them on the carbon
trading marketplace Nori for $75,000.
![](http://archives.lincolndailynews.com/2020/Nov/23/images/ads/current/eaton_lda_HFH_2019.png)
"The ability to sell our carbon credits through the Nori system and help the
rest of the world be more green is a wonderful benefit to our economy and our
finances," Garrett said.
Still, Nori noted that Microsoft Corp passed on a deal to buy most of Garrett's
remaining credits because they were not verified by on-farm soil tests. Nori
deems individual soil tests too costly, and instead verifies its credits based
on soil type, crops planted and other data, said Alexsandra Guerra, the
company's director of corporate development.
Microsoft declined to comment.Few North American farmers have gone through the
vetting process Garrett underwent, which also limits supplies of the
high-quality carbon credits that some buyers seek.Some critics say carbon saved
from no-till farming can easily escape if the soil is tilled again. "Statements
that soils can sequester all of our emissions and more are overstated ...
There's no way we could make that shift fast enough to address the climate
crisis," said Tara Ritter, senior program associate with the Institute for
Agriculture and Trade Policy.
PAYING UP FRONT
Despite those doubts, food companies are banking more on carbon capture and
regenerative agriculture. General Mills offers farmers technical advice while
other companies pay growers up front to adopt greener practices.PepsiCo, maker
of Quaker Oats and Frito-Lay chips, pays farmers $10 an acre to plant cover
crops over winter, which can reduce erosion and control weeds and insects.
This helps PepsiCo meet its sustainability targets and secure its food supply,
said director of sustainable agriculture Margaret Henry. PepsiCo subsidized
cover crops such as rye and radish last year across 50,000 Midwest acres and
plans to grow the program further.
Henry pointed to an added benefit: Cover crops soak up excess moisture, making
many fields ready for spring planting two weeks earlier than fields that lay
fallow."We want this to be a win win for the long term," she said.
(Reporting by Karl Plume in Chicago and Rod Nickel in Winnipeg, Manitoba;
Editing by Caroline Stauffer)
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