JAMESTOWN, N.D. — Government regulators across the globe, along with business leaders and investors, have made the case for lowering the carbon intensity of products coming from farms and ranches. But getting the value of those practices to trickle down to the farm and ranch level remains the challenge, panelists at North Dakota Farmers Union’s second annual Evolution Ag Summit discussed.
Research has shown the impact that varying ways of handling tillage, fertilizer and conservation practices like incorporating cover crops can have on reducing carbon emissions, said Courtney Hall, senior director of sustainability at CHS Inc. What remains to be seen is what those changes are worth and what kind of incentives are needed to get farmers and ranchers on board.
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“How do we make it worthwhile?” Hall said during a panel on food and agribusiness perspectives.
The Evolution Ag Summit — this year entitled “The Carbon Conundrum 2.0” in a repeat of last year’s main topic — was born out of a desire to bring people together on market opportunities and changes, said Matt Perdue, North Dakota Farmers Union government relations director. Carbon itself was not the only subject considered but has remained an enduring topic in the industry about which people have questions and concerns, he said.
The event drew a larger-than-expected crowd, with Farmers Union staff throughout the day adding more seating to accomodate several hundred farmers, ranchers and representatives of agribusiness.
Panels on food and agribusiness, sustainability, the price of carbon, incentives for carbon management and what farmers and ranchers think about the topic largely came back to what practices to reduce carbon emissions cost to farmers and what their implementation should be worth.
Hall said CHS doesn’t have any farmer-facing carbon sequestration programs yet but is doing a lot of listening and learning. Finding ways to provide incentives that work for everyone remains part of the problem.
“We don’t know what the reward is for that yet,” she said.
That incentive portion and determining what the reward is will be important in getting people to change the way they do things, other panelists agreed.
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“Conservation without compensation is only a conversation,” said Chad Ellis, CEO of Texas Agricultural Land Trust and chair of U.S. Roundtable for Sustainable Beef and of Ecosystem Service Market Consortium and founding chair of Trust in Food’s Trust in Beef program.
Adam Dunlop, executive vice president of Harvestone Low Carbon Partners, which owns Blue Flint Ethanol and Dakota Spirit AgEnergy in North Dakota as well as a biorefinery in Indiana, said the Inflation Reduction Act appears to mean to provide some tax incentives for farmers to provide low-carbon corn for use in ethanol; however, the rules aren’t clear around what will be required. He said farmers should keep a paper trail on how they produce their crop so that if the programs get implemented they can see an improved price for their crops.
But reducing carbon emissions is the only way ethanol or renewable diesel can stand out against other low-carbon fuels.
“We have to continue to drive toward lower carbon intensity because that’s the only thing that really differentiates one molecule … from another,” he said.
David Ripplinger, North Dakota State University professor and bioenergy economist, gave a talk about the price of carbon. The crux of the conversation was that there is no agreed upon price for carbon at this point. Various systems involved now, including carbon offsets — often big companies that pay farmers for practices so that the companies can get credit — carbon insets — where farmers are paid more for their practices in the supply chain — and in government programs, all value practices differently. And though he does believe the systems will mature and “converge” on a similar value, that’s nowhere near the case now.
“I don’t think anytime soon we’ll have a single price,” he said.
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A panel on incentivizing on-farm carbon management discussed how farmers and ranchers are being paid and whether it’s practice-based — meaning, given as an incentive to try a practice — or outcome-based — meaning paid out on whether carbon actually is sequestered by the practice.
Matt Rohlik, managing director of sales and strategic partnerships at Arva Intelligence, advised farmers and ranchers to sign only one-year contracts, make sure there are no “clawbacks” on anything — eluding to farmers having to repay money initially paid out — and to pick a good partner.
While financial incentives may be necessary to get some producers on board, the practices themselves can have positive impacts on profitability or on the durability of the land. Miranda Meehan, North Dakota State University associate professor and livestock environmental stewardship specialist, and Lindsay Malone, NDSU associate professor for climate smart approaches in ag, looked at ways conservation practices can improve the bottom line for farms and ranches.
On the pasture and forage side, Meehan explained how properly maintained grazing lands can both sequester more carbon and also provide more resilience against things like drought. She explained how “gold standard” practices — like “take half, leave half,” grazing pastures to a moderate level and carefully maintaining native species like big bluestem that provide deep roots — keep pastures healthy even in the common years of drought in the region. Proper grazing management can keep producers from having to sell down herds and thus lose years of herd genetics, she said.
Malone addressed more from the row crop side and showed how practices minimum tillage and using cover crops can increase yields in the long run. Challenges exist, like managing disease, pests and weeds, she said. Another big challenge is the cost of putting in and managing cover crops.
Malone and Meehan are working together on research that might help change the outlook on the cost of cover crops. Integrating livestock into crops systems can not only provide a value for the cover crops but also fulfill a soil health principle of having livestock onto the land.
A panel of three farmers and ranchers, which was the last presentation of the event, stressed that the kind of improvements that Malone and Meehan talked about — the enhanced soil health and the increasing ability to withstand drought and heavy moisture — were as important to focus on as monetary payments, though they said the payments were a nice addition if the practices incentivized fit into an operation.
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As an example, Dawn Martin, a Beulah, North Dakota, rancher, told the audience she and her husband tried to grow cover crops for a few years, in part for soil health benefits and in part for more grazing. But drought kept the crops from taking off in the fall, meaning the investment in the seed and planting were neither helping the soil nor providing forage for their cattle. Though they have implemented some cover crop usage over time, initially, cover crops did not fit into their operation.
“Obviously, incentives are always a benefit. I mean, to get more dollars for an operation is a huge help. But I think you have to make sure that that practice is going to work for your operation and it’s going to be a benefit for you, because otherwise you’re not going to want to keep it implemented,” Martin said.
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