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Farmers Say Carbon Credit Efforts Improve Soil Health, Boost Revenues

By Brandon Mulder

Farms across the US are seeing improved soil health and higher crop yields after participating in carbon farming programs that produce nature-based carbon credits sold as offsets in the voluntary carbon market, participating farmers said Jan. 13.

“The water-holding capacity in the soil is built up by that soil’s microbial action, and those microbes need the carbon in order to grow,” said Paul Overby, who farms 1,900 acres of grains in North Dakota near the Canadian border, during agriculture technology firm Indigo’s carbon farming strategies virtual workshop.

Overby was an early adopter of Indigo’s carbon farming program, Carbon by Indigo, which began partnering with farmers in 2019 to help them start generating and selling carbon credits to buyers.

Programs like Indigo’s encourage farmers to adopt land-use practices that can increase the carbon-capturing capacity of soil. The benefits of these are twofold. First, farmers can create supplementary revenue streams through selling their credits, which are verified by carbon offset registries, to companies looking to offset their carbon footprints. Second, farmers can improve soil health by adopting the regenerative land use practices required by the registries, like using cover crops, diverse crop rotation and no-till farming.

The northern region of North Dakota experienced a severe drought throughout the growing season last year, having recorded just 5.5 inches of rain. But Overby’s field was nonetheless able to produce above average wheat yields that year, about 60 bushels/acre, he said. And that’s all thanks to the increased carbon being stored in his soil.

“The carbon that you store in your soil becomes a food source,” Overby said. “It’s a currency of life, and that creates microbial action that builds up the soil structure to hold water.” That increased microbial action creates better soil conditions that promote crop growth, thus reducing the farmer’s need to rely on fertilizer or phosphorus inputs, he added. “Carbon is the building block that makes all that happen,” Overby said.

Mark Nault, a wheat farmer in northwest Oklahoma, noted similar results. He looks back on his earlier farming practices as “chemistry farming” – using chemical soil additives to augment growing conditions. Now, he classifies it as biology farming.

“Whenever I would plant my seed, I’d look back behind the drill to check the depth and moisture, and never once would I see an earthworm,” Nault said. “Now, when I go back and check the depth of the seed, I’m uncovering earthworms. I’ve got life underground that I’ve never had before.”

‘Demand is there’

Interest among US farmers in carbon farming practices has been mounting in recent years, Indigo’s data shows.

As of Jan. 1, the company’s carbon program counted 3.6 million acres and thousands of farmers enrolled – an 83% increase since the start of 2021, it said.

But demand for credits is still high, as demonstrated by their skyrocketing prices. According to S&P Global Platts data, one nature-based credit, equivalent to 1 mt of avoided or removed carbon emissions, was priced at $14.25. That’s up from $4.65 on June 13, when Platts first started assessing prices for nature-based credits.

It’s part of Indigo’s mission to generate more supply by enlisting more farmers in the voluntary carbon market, the company said.

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