The Iowa Soybean Association was already headed down a more intentional road to promote conservation and carbon sequestration before the Biden administration’s initiative came along. Now, the group has the financial backing to take its effort far beyond the state’s borders.
The group is operating one of the largest Partnerships for Climate-Smart Commodities projects in the country at a total cost of more than $157 million, $95 million of which will come from USDA.
Producer incentives total $114 million, with $52 million of that coming from federal funds and $62 million from corporate commitments. The food and ag industry giants contributing to the project include PepsiCo, Cargill, Target, JBS and Coca-Cola.
Notably, the project is paying producers for the amount of actual emission reductions, rather than just for the practices they implement. The bulk of project agreements analyzed by Agri-Pulse pay farmers to adopt climate-smart practices but do not tie payments to verified decreases in soil carbon dioxide equivalent.
Using a USDA-based carbon capture calculator to measure the amount of carbon farmers sequester, the Iowa Soybean project expects to pay farmers an average $40 per metric ton of carbon dioxide equivalent, or a total of $114.2 million, according to the project agreement. Some 47% of that amount will come out of the USDA grant, the rest from project partners.
The project has its roots in the Soil and Water Outcomes Fund that Iowa Soybean started in 2019 “to connect farmers with environmental outcomes and partner them with public and private entities who value those outcomes,” said Adam Kiel, managing director of the Soil and Water Outcomes Fund. The fund was already looking for ways to provide farmers with financial incentives to make changes.
The USDA grant allowed the Soil and Water Outcomes Fund to take its work to 12 Midwest and Great Plains states for growers of not only soybeans but also corn, wheat, and sugar beets. Beyond just payments to farmers, the money is going toward enrolling farmers and on-farm actions while helping measure outcomes using field inspections, farmer records and soil sampling. NRCS practices that are used to reduce emissions include nutrient management, pasture and hayland planting, no-till or reduced tillage, diverse crop rotations and cover crops.
The goal of the project is to help develop a market for verified carbon insets, which allow companies to reduce emissions within their supply chains, as well as generate credits for water quality improvements and low-carbon feedstocks for biofuels, according to the project agreement with USDA.
Since farmer enrollment began in earnest in 2023, the program has signed up 313,000 acres, mostly in Iowa and Missouri but also in Illinois, Indiana, Ohio, the Dakotas, Kansas and Minnesota.
Bryan BiegleFarmers aren’t paid per conservation practice, a common aspect of many PCSC projects, but for positive environmental outcomes generated by the practice changes, such as measured or calculated greenhouse gas reduction or the amount of runoff prevented. According to Kiel, payments to farmers for 2023 averaged $33 per acre.
Instead of using cover crops and reduced tillage on about half of his 2,500-acre farm, Bryan Biegler said enrolling in the Soil and Water Outcomes Fund pushed him to expand these methods to nearly all the farm.
Biegler, who farms near Lake Wilson in southwest Minnesota, has even started growing cereal rye (the cover crop of choice) for seed, which he sells to a seed dealer. He said a farmer can’t really afford to experiment too much with cover crops. By the time a producer buys the seed and inputs and applies them “you can be pushing $30 per acre. We still have to make a profit.”
That’s where PCSC payments have helped. Soil benefits are also a plus. This past spring, which was very wet, the first soybean fields he was able to plant were those that had been in rye. The soil held up better.
“I notice on those fields that they seem to be easier to get across during harvest when it is wet,” said Biegler.
As part of the five-year project, partners plan to account for and track nitrous oxide emission reductions and soil carbon sequestration separately at the field level. As with a number of PCSC projects, 20% of the contracts are reserved for underserved populations and supported with technical assistance.
Co-op eyes long-term incentives for cutting milk’s carbon footprint
In 2016 dairy farmer Paul Cornette was among a group of producers and area businesses who got together to form Peninsula Pride Farms in northeast Wisconsin’s Kewaunee and Door counties. The group wanted to research and encourage sustainable practices in their business. They knew they needed to up their game when it came to water quality, according to Cornette, but as much as anything they wanted to tell the non-farming world about their science-based stewardship.
“We had some environmental challenges in the region and groups of activists exploiting those challenges,” said Cornette, who runs a 400-head dairy and farms 1,000 acres with his brother, Tom. “We needed to communicate with people in our community and let them know why we do the things we do — and to tell them we do care about land and water resources.”
Paul Cornette
With Peninsula Pride Farms’ work as a backdrop, it made sense to Cornette to get involved when Wisconsin-based Edge Dairy Farmer Cooperative announced two years ago it wanted to secure a PCSC grant to be used in up to 18 states and tribal lands. The program is administered by Farmers for Sustainable Food, a non-profit organization established by Edge several years ago.
More than a dozen other organizations are involved, such as the Wisconsin Department of Agriculture, the Nature Conservancy, and MN Farm Business Management. The federal grant is $50 million.
The project’s goal, according to Edge’s funding agreement with USDA, “is to work with dairy processors, sugar beet co-ops and consumer-facing companies to establish climate-smart commodities that could result in financial incentives directly to farmers for achieving climate-smart commodity targets.”
Specifically, the project is supposed to reduce GHGs associated with beet sugar production using a three-pronged approach: “improving nutrient use efficiency by preventing environmental losses; optimizing fertilizer programs to maximize extractable sugar, and creating beneficial uses for beet sugar factory waste streams that reduce reliance on synthetic fertilizer inputs,” according to the agreement.
“Both climate-smart practices and associated farmer incentive payments and/or stipends for data collection, meeting attendance, and use of crop advisors will be set by each partner-led project to ensure that the compensation is enough to recruit and enroll producers,” the agreement says. “Payment rates for each individual practice will be informed by USDA NRCS & FSA dockets but not required.” Twenty different NRCS practices are covered, including no-till and reduced tillage.
At the field level, it means Cornette continues to move from conventional tillage. “A decade ago we might have plowed up to 650 to 700 acres in the fall,” he says. “Last fall that number was down to 250 acres,” he said.
The Cornettes also use more strip tillage and let alfalfa stubble stay in the field over winter. In addition, they use more stabilizer products with nitrogen fertilizer that prevent chemical volatilization into the atmosphere.
These are mitigation efforts the Cornettes were making even before they joined the FSF program. The ability to secure financial incentive to do even more intrigues Cornette. Not all these changes would have necessarily happened without financial help, either through Peninsula Pride Farms or the new USDA grant.
“I’d be lying if I said the funds didn’t have some influence on anything to do with the changes we keep making,” says Cornette. “But I do look at this as an investment in conservation, so the financial incentives help us make changes.”
With what they have accomplished already, Cornette said the farm’s greenhouse gas score, or carbon footprint, has declined by 15-25% while benefiting his operation. “Now we wonder how far we can push this, what net zero would look like and can we get there without bending over backwards.”
The financial incentives do make a difference. The Cornettes recently purchased a used late model 24-foot no-till drill and Paul couldn’t help but notice that if they participate at the highest levels in the FSF program, their incentive — over time — will nearly match what they paid for the drill.
As for making or saving money, Cornette has no hard numbers but said he spends less on fuel and labor.
“We’re learning on the go,” said Paul. “Soils that are no-tilled with cover crops may be more efficient with fertilizer and we may not need to spend as much money on nutrients. What’s to come, I don’t know, but I think we’ll find more benefits out there.”
Cotton project limits payments to new practices
Barry Evans considers his participation in the PCSC program through the U.S. Cotton Trust Protocol a natural extension of conservation methods he’s been applying on his 4,800-acre farm for 25 years.
Evans, who farms with son Eric near Kress in the Texas panhandle, devotes about half his land each year to cotton, and has used no-till and reduced tillage methods for decades.
“But the consumer doesn’t know that,” Evans said. “That’s where the U.S. Cotton Trust Protocol comes in. We’re doing good work, and the protocol is the voice to tell the consumer.”
Created in 2020, the protocol bills itself as a voluntary, farm-level science-based sustainability program encouraging the use of nutrient management, reduced tillage and cover crops. The protocol aims to increase drought and flood resilience, improve soil health, reduce erosion and increase nutrient use efficiency.
The PCSC project goals include tracking 4.2 million bales of climate-smart cotton through the supply chain and working with apparel brands and retailers to create demand for 4.2 million bales of cotton, according to the funding agreement with USDA. Another goal is to generate and sell 1.14 million metric tons of insets to the apparel industry that will generate grower income.
The project agreement notes that major brands such as Gap, Levi Strauss & Co., and Ralph Lauren have signed the the Fashion Industry Charter for Climate Action set the goal of halving the apparel industry’s carbon footprint by 2030.
The protocol is the lead partner with other organizations and universities that received a $90 million grant. The funding will be spread over 17 cotton-growing states to more than 1,300 farmers.
Barry EvansIn Evans’s case, they’re expanding their use of cereal rye as a cover crop to go along with the no-till and reduced tillage they have used for years. “We’re building up residue,” he said. “We capture rainfall with that residue in addition to reducing erosion.”
Growers working with the program will receive $5 per acre for enrolling, according to Chaz Holt, director of field operations for U.S. Cotton Trust Protocol. Beyond that initial interest, farmers adding a new practice such as cover crops are eligible to receive a payment of $35 per acre. Formulating a nutrient management plan pays $5 per acre, as does adopting minimum or no-till.
As with many such programs, farmers won’t get paid for practices they were already using. But if they are adding, for instance, cover crops on acres where that practice has never been used, they are eligible.
“There is no limit on the number of acres a farmer could enroll using new practices,” said Holt. “And technically no limit on dollars an individual farm could receive.”
The financial incentive is certainly welcome but isn’t the deciding factor for most producers like Evans. Farmer applicants for this grant money have to be members of the protocol.
“I’m doing it because it’s good business and good for the land. The financial incentive alone isn’t enough to make me do this,” Evan said. “It is enough money to help get the message about what we’re doing to the consumer, and it makes me willing to fill out the paperwork and verify the things we’re doing.”
According to Holt, three-fourths of the grant money will be payments to growers. To service the grant and payments to farmers, the protocol hired three regional specialists to provide technical assistance.
This grant will also specifically serve “historically underserved communities” such as farmers of color and veterans. Three universities and the Department of Veterans Affairs are partners in the grant.
Rice operation in Texas that has used land leveling. (USDA)Rice project aims to slash crop’s methane emissions
In the rice-growing states of Arkansas, California, Louisiana, Mississippi, Missouri and Texas, conservation incentives often involve building structures and systems as much as they focus on less tillage and cover crops. Structural changes often involve precision land-leveling and water distribution that make farms more efficient by using less water and energy.
Conventional cultivation practices for rice, which involve flooding the fields, result in emissions of methane, a potent greenhouse gas.
A PCSC project led by USA Rice aims to cut methane emissions on 240,000 acres of working rice farms through “irrigation strategies of alternate-wetting and drying (AWD), furrow irrigation, and efficiencies in use of fertilizer, crop protectants and energy,” according to the project agreement with USDA.
Those practices can cut rice’s methane footprint by 90% and research suggests more than 80% of farmers who start these practices as part of a contract will keep using them after it expires, the agreement says.
The project’s incentive structure combines payments for practices with a bonus of up to $7,000 for data collection and exceeding the average GHG reduction as measured by Field to Market’s Fieldprint calculator.
Financial assistance rates for EQIP practices equate to “full cost of implementing practices as determined by NRCS,” the agreement says. “The rate for CSP is standardized full cost of implementing enhancements (no historically underserved level). Then, these financial assistance rates are increased 25% to cover the added data and monitoring efforts borne by the producers.”
“Precision ground leveling is extremely important for rice production,” said Josh Hankins, director, grower relations and rice stewardship partnerships for USA Rice. Rice fields are generally flooded after planting and during the growing season, then drained prior to harvest.
Josh Hankins, USA Rice“Every project is different, and this [grant] allows more flexibility than what we’re used to,” he said. As of the beginning of August there were more than 800 applicants for funding across the six states. The final round of applications has just been completed.
USA Rice is the lead partner for the funded with USDA’s $80 million grant. Some of the other partners in this project — which will distribute $63 million directly to farmers — are Ducks Unlimited, National Black Growers Council, Walmart, Nestlé, Purina PetCare and Anheuser-Busch.
USA Rice has a decade-long partnership with Ducks Unlimited that leverages the groups’ mutual desire for environmentally friendly conservation work in a region where so much water is on the ground in the major U.S. waterfowl flyways.
USA Rice also has worked on conservation efforts under USDA’s Regional Conservation Partnership Program since it was formed in 2014.
“We have a long history with this kind of work,” says Hankins. Though grants for climate-smart commodities might cover as many as 30 different practices, he expects most of the work to involve irrigation, cover crops, no-till efforts and nutrient management.
Jeff Rutledge, a farmer near Newport in northeast Arkansas, used the example of a farmer who wants to turn a field that is irrigated on contours to a flatter, precision-leveled field, which means moving a lot of land.
“Going from a contour leveled field to a precision leveled field—straightening out the levees — generates about a 20% water savings and pumping costs,” says Rutledge, who farms 3,500 acres of rice, corn, and soybeans. “There’s a direct savings in the amount of water used and the energy needed to pump it. When we are talking about saving water, we are talking about saving money,” he adds.
Precision-leveling a field might cost anywhere from $600 to $1,000 per acre, according to Rutledge. Grants from the PCSC will help defray that cost. “These are long-term investments that make sense economically and environmentally,” he says.
Even though $80 million is a large grant, the demand from farmers for help to improve their conservation efforts will likely far exceed the amount offered, according to Hankins. This has been true of most programs they’ve done in the past.
“This is a very competitive process,” says Hankins. “We’ll probably be able to fund about 30% of the applications we receive.”