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To the Editor:
A proposed standard from the Securities and Exchange Commission to require publicly traded companies to assess and disclose climate-related financial risks to their businesses recently caught my eye -- and the eyes of many other farmers too. I've learned that the standard itself does not apply to businesses like mine and does not require companies to collect data from farms, but it has spurred some farmer organizations to express concerns about sharing farm data with food and agriculture companies.
While I agree that the agricultural community should seek clarity on any proposed standard, I'm concerned that we may be missing the bigger picture of what farmers stand to gain from efforts to improve transparency about climate data. With the right protections in place, collaboration around farm data has more upside than downside. It can reduce climate risks to farms and drive investment toward farmers who are generating positive climate solutions.
On our grain and livestock farm in Iowa, we've experienced climate risks firsthand. Our crop was flattened and our grain facility ripped apart in 2020 by a derecho, a powerful string of storms with tornado-strength winds, that left at least $7.5 billion in damages in its path. The ensuing disruptions on our farm and throughout the agricultural supply chain were a powerful example of the climate risks faced by food and agriculture companies. It makes sense that investors want to better understand how these companies are preparing for climate change.
Our family farm has also seized climate opportunities over the last decade. We embraced precision fertilizer application technology, reduced our use of synthetic fertilizer, altered our tillage and implemented cover crops, practices which can help to reduce our farm's carbon footprint, not to mention also make our operation more resilient to climate and economic shocks.
These changes have allowed us to cooperate with others in the agricultural industry to monetize the climate benefits we generate on our farm. They also make our farm a good partner for companies and other investors that have set net-zero climate goals -- a market that grew more than 50% over the past year and is estimated at $2.7 trillion.
In our experience, however, the market signal for climate benefits is weak and muddied by the time it gets to the farm. Without data to measure outcomes and estimate future impacts, investors who want to fund sustainable agriculture can't tell which market opportunities are real and impactful. As a result, farmers aren't receiving the full financial benefits of the climate solutions we generate. This lack of market incentive is holding back agricultural climate solutions at scale.
Efforts to improve transparency around climate risks and opportunities will help investors make sense of the array of claims they hear from companies, and direct investment toward companies and farms that have real plans to reduce their climate impacts. Increased data transparency will improve existing solutions in the marketplace and bring new solutions to market more quickly.
As this happens, my farm will continue to implement improved practices and partner with others in the industry to take advantage of opportunities to participate in new markets. To do so, we understand the need to share on-farm data -- how else would we be able to prove the benefits we are being paid for are real? While I believe in the benefits of sharing farm data, it must be voluntary and include appropriate privacy protections.
Policymakers and the agriculture community should also pursue opportunities to leverage data from public universities and improve models and technology to estimate emissions, particularly for farms that may not have the same data technologies as our operation.
I am encouraged by the agriculture sector's engagement on climate risk and resilience. We will need that collaboration as farm bill conversations commence. My hope is that farmers will engage with an open mind and an eye toward the future of agriculture.
Scott Henry is a partner for LongView Farms, a family grain and livestock farm in Nevada, Iowa.
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