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Agriculture and Sustainability

March 3, 2021 //

Agriculture and sustainability are two words often said together these days. It seems like almost every month, more companies of various sizes across many industries are announcing new sustainability commitments, along with sustainability programs and markets that farmers and ranchers can participate in. Advancements in technology and increased capital have provided farmers more opportunities to generate additional revenue from participation in these markets. Agriculture is considered a carbon sink land-use, meaning certain agricultural management practices, especially those that increase below-ground plant matter, can sequester carbon in soils to offset greenhouse gas emissions and reduce atmospheric CO2.

With agriculture being a solution to mitigate past and present emissions, it becomes especially important to understand how things are taking shape from agriculture’s perspective and what tools are available to help farmers succeed in a voluntary and economically viable way.

The Environmental Protection Agency provides annual estimates of man-made greenhouse gas emissions in the U.S. by emissions source. According to EPA, U.S. agriculture contributes only 10% of total U.S. emissions. This emphasizes not only U.S. agriculture’s per-unit emissions reductions over the past three decades, but significant productivity gains in crop and livestock production. Even more, the increased investment in agricultural research can help farmers and ranchers play a direct role in capturing more carbon in the soils with voluntary and incentive-based practices and markets.

Agricultural productivity is estimated by USDA’s Economic Research Service and put into indices of farm output, input and total factor productivity. When compared to 1990, U.S. agriculture is producing 143 times more food and agriculture products, while using almost the same amount of inputs. U.S. agriculture is producing more food for more people on less ground, and using the same or fewer resources to do it.

Since 1990, total U.S. agricultural emissions have increased by 12%. However, using the productivity trends, per capita agricultural emissions have declined by 15% since 1990. Furthermore, when adjusted by productivity gains, aggregate U.S. agricultural emissions have declined 24%.

figure 1 - Ag Emission Indices

Given that per capita agriculture emissions have decreased despite productivity gains, agriculture is poised to serve as a potential carbon sink if farmers or ranchers volunteer their time and labor to do so. There are programs and markets with incentive-based approaches being developed that can help farmers and ranchers adopt conservation practices that enhance their carbon sequestration potential and can help add diversified revenues. Some common practices include cover crops, diversity in cover crops, livestock grazing, crop rotation, no-till/ strip-till, anaerobic digesters, nutrient management, buffer strips, tree establishment, etc.

These ecosystem services credit markets are evolving to connect buyers who want sustainability credits to offset their own emissions to sellers, like farmers who have adopted certain management practices and used specific tools to quantify the amount of carbon sequestered into a credit for purchase. These credit markets are constantly evolving, and many are still under development or being refined in pilot stages. From public to non-profit to private, there are already several markets in various stages of development that allow farmers and ranchers to generate agriculture ecosystem credits and sell them to a variety of buyers.

figure 2 - sustainability markets' revenue potential

Takeaways

Agriculture and sustainability are two words often said together these days. Agriculture is successfully producing more food, feed, fiber and renewable fuel using less land and inputs and finding ways to reduce its own industry’s emissions. Other industries are looking at agriculture as a solution to mitigate past and present emissions. For farmers and ranchers, this presents an opportunity to add diversified revenue streams as long as these options remain voluntary and economically viable for farmers and ranchers and that they go sensibly hand-in-hand with climate-smart practices in place on the farm.

Dr. John Newton

Dr. John Newton

Chief Economist - American Farm Bureau Federation

jnewton@fb.org

Shelby Myers

Shelby Myers

Economist - American Farm Bureau Federation

shelbym@fb.org

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Filed Under: AFBF Market Intel, News

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