OMAHA (DTN) -- Robert Bonnie, USDA's undersecretary for farm production and conservation, sees a movement ahead in agriculture where farmers are paid not just for what they grow, but how they grow it.
As USDA rolled out its Partnership for Climate-Smart Commodities pilot program this week, the department took a pivot with the Commodity Credit Corp. to offer up a chance for businesses and other organizations to create voluntary market incentives on working lands to measure, quantify and verify practices that lower or minimize emissions of carbon and other greenhouse gases. Among the goals is the prospect of premiums for how producers grow their products, which could include a potential USDA label.
There was already a lot of focus on criticism and pushback from Republican lawmakers who argue USDA is overstepping its bounds with the $1 billion program pulling money from the Commodity Credit Corp. As Bonnie testified earlier this week, GOP lawmakers questioned the purpose of the program and its benefits. USDA will need to move quickly on funding the projects, given that the last time Agriculture Secretary Tom Vilsack used CCC funds in a way that upset Republicans they restricted his ability to tap the fund when they took control of Congress.
Still, support for the new pilot program poured in from a long list of groups, including the American Farm Bureau Federation, National Farmers Union, American Soybean Association, National Corn Growers Association, National Milk Producers Federation, National Council of Farmer Cooperatives, as well as groups such as the Nature Conservancy and the Walton Family Foundation.
In an interview with DTN, Bonnie stressed the USDA mantra that the new program focuses on "voluntary, incentive-based, producer-led efforts" around climate change. In constructing the partnership, USDA focused on producers through the public comment period last spring around climate-smart approach, including adopting the pilot-program strategy advocated by the Food and Agriculture Climate Alliance (FACA), a collection of more than 80 farm and environmental groups.
"And that is what it is. We think we've got a lot of interest here from producers," Bonnie said. "We think broadening it away from just thinking about carbon and carbon sequestration and greenhouse gas emissions and making it a more-broad rule around climate-smart commodities will allow for broader participation."
Among the criticisms of the partnership is that producers don't just go into their local Farm Service Agency office to sign up for it. Instead, USDA issued a grant notice this week seeking applications from businesses, groups, state and local governments or tribes for projects under separate tranches. The first, due April 8, includes projects that could range from $5 million up to potentially $100 million. A second pool of funding is set aside for smaller projects from $250,000 to $4.9 million that is due May 27.
"So, the challenge is, if you are an individual producer, it's harder to think about how you engage in these broader markets, unless you are really big," Bonnie said. "How do you measure or monitor? How do you know what practices apply? The idea here is that there is strength in numbers. By allowing folks to aggregate producers -- whether it's a commodity group, a conservation district, a land-grant university, a conservation group -- that will actually allow more participation from smaller and medium-sized producers because it allows them to spread the costs of measurement, allows them to have easier access to information and technical assistance."
By working through aggregators rather than individual farmers or ranchers, USDA sees the ability for more producers to participate, Bonnie said. "Whether it's dairy producers working together, or what you see like the work with cotton producers to create sustainable cotton and that work, we think there are some places where there are projects with folks that have aggregated producers in a way that actually makes it easier and more cost-effective."
As an example of that, Progressive Farmer Crops Editor Matthew Wilde wrote last November about cotton producers earning a $2.50 premium per bale of cotton for acres enrolled in BASF's e3 Cotton Sustainability Program.
See "Sustainable Cotton is Industry's Future" here: https://www.dtnpf.com/….
When looking for projects to fund, USDA will be focusing on making sure the money provided will be going to producers who enroll in a particular program. That will be part of the criteria when USDA begins to rank projects. Bonnie added that an aggregator might not score well if its project is simply focused on the cost of reducing greenhouse gases.
"That limits your ability to think creatively about how to involve more producers and how to ensure dollars get to the ground." He added, "There's concern out in the countryside -- whether it's a carbon market or anything else -- is making sure resources will actually make it down to the ground."
Broadening a project to consider marketing climate-smart commodities allows for broader participation, and it also creates a strategy to reward early adopters of farming practices such as no-till and using cover crops.
"It allows us to work in parts of the country where maybe they're not going to sequester that much carbon, but their participation across a lot of acres could be really beneficial," Bonnie said. "And so, the idea here is to allow some more creativity in a way that will allow more producers to participate and more to benefit."
DTN highlighted those challenges facing early adopters who may grow in arid areas when conditions may lead to less carbon sequestration. See "Farming Climate Smart on the Plains" here: https://www.dtnpf.com/….
Midwest producers who have been no-till or using cover crops over the past decade or more may reflect less "additionality" for carbon credits right now, but there are companies in the supply chain looking to highlight "greening the soybeans," so the focus may not be as much about reflecting further emission reductions but maintaining those farm practices.
"We've heard a lot of strong interest from row-crop folks, particularly corn and soybeans, to recognize early adopters because there are so many people using conservation tillage," Bonnie said. "So, if you were to sell a climate-smart soybean, the supply chain may not be interested specifically in the amount of carbon, but they may be interested that this is a sustainably produced product."
Others who could benefit could be farmers selling corn to ethanol producers looking to reduce the carbon intensity of their product by measuring carbon footprints on the farm. Dairy producers have been working to manage manure in a way to reduce the carbon footprint of milk and other dairy products.
"That has been talked about among some folks, and there may be some interest out there," Bonnie said.
On the forestry side, there are projects by groups such as the Nature Conservancy and American Forest Foundation that are looking for ways to aggregate landowners who have small clusters of wooded lands, or tree farmers. Those groups are interested in the environmental footprint of wood products and being able to reach outside investors in their land who might be wanting to fund greener investments, Bonnie said.
"That's one place where there has been some interest, and also even among some larger forest owners," he said, adding, "So lots of ideas like that have come up, in the context of the public comment period; and so, we think there will be high interest here and there will be a fairly broad diversity of projects."
For more, see "USDA Promotes Climate-Smart Commodities," https://www.dtnpf.com/….
Also "Undersecretary Defends USDA's New Partnership for Climate-Smart Commodities," https://www.dtnpf.com/….
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
(c) Copyright 2022 DTN, LLC. All rights reserved.