Fuel Farm Revenue
November 03, 2023 | By ForGround by Bayer
As a farmer, so much of what you do is about the bottom line. But what if the way you farm could help you both maximize farm income and simultaneously build a more sustainable operation?
Conservation programs can help provide opportunities for producers to enhance their sustainability efforts while creating an environment that can assist in boosting farm income. Both public and private programs offer a variety of cost-share plans for growers to consider.
What type of cost-share program is right for you?
Available through agencies like your local Natural Resources Conservation Service (NRCS), funding for public cost-share programs can vary from state to state.
According to Austin Omer, a ForGround by Bayer Sustainable Systems Agronomist, many public cost-share programs like those offered by NRCS pay based on the type of conservation practice implemented.
“Those programs are paying a farmer to implement cover crops or no-till, for example, on a per acre basis,” Omer says. “Some private programs pay based on outcome.”
Omer explains it this way. When a farmer implements a cover crop, he or she might get paid based on how much carbon that cover crop takes out of the air, puts back into the soil as organic matter and stores there over time.
Public programs usually dependent on state appropriations, and some designate funds for specific watershed work or certain USDA projects.
“Whether they’re a state program or a USDA program, they’re all really focused on very similar practices,” Omer explains. “And those practices are really aimed at improving water quality, increasing carbon sequestration, improving soil health and reducing erosion.”
In addition to public and private cost-share programs, a combination of the two also exists. Partnerships for Climate-Smart Commodities projects are one example, Omer says. Here, the private sector and USDA combine financial support to get projects implemented.
“Some of those may be based off of outcomes, but the majority will still be paid on practice from USDA,” Omer says. “A few of those public-private programs might pay based on outcome, but a lot of them are still basing their payment off of practice implementation.”
What’s in it for you?
Incentives, incentives. What’s in it for you if you’re interested in participating in a cost-share program? Omer says public programs typically are based on payment.
“[The agency] will essentially offer you, for example, an amount per acre to implement a cover crop,” he explains. “Mostly, these programs are trying to incentivize a transition based on a dollar per acre payment.”
While the incentive might vary depending on your location, Omer says some programs will cover the cost of the practice while others will not.
Private programs, however, typically pay regardless of the practice or the outcome.
“Bayer, for example, is an aggregator of credits or outcomes,” Omer explains. “So, we might be paying the farmer based on practice, but we are getting paid based on an outcome that is generated and sold in a marketplace.”
In a private program like the one offered at Bayer, Omer says an asset, or a carbon credit, is created then sold on a voluntary private carbon market. In this instance, the farmer gets paid based on the outcome, but Bayer pays the farmer based on a per-acre payment.
“There are other programs that pay the farmer based on an outcome, or how much carbon is sequestered,” Omer says. “We’re essentially paying based on practice and trying to reduce that risk in the marketplace for the farmer.”
What are the data and technology requirements to participate?
When it comes to receiving a payment for something, Omer says it’s a given that data will be required to prove the outcome.
Data is almost always required for both public and private program participation. “Data is one of those things in which technology can simplify the process,” Omer says.
He also notes that simplifying the data input process with the use of technology is key for public and private opportunities; however, it requires farmers to share information and prove that they’re doing what they say they are doing.
“We do need data to model the outcome and sell that outcome on a marketplace so that we can pay the farmer,” Omer says regarding Bayer’s private cost-share program. “We do infield sampling as well, hand- in-hand with that so we can ensure the model is representing an actual impact we have sold on the marketplace.”
What about program stacking opportunities?
Private and public programs are available to assist farmers in implementing conservation-minded management practices, including carbon sequestration. In some instances, the programs provide a monetary incentive that can be stacked for the same fields and practices to potentially earn additional revenue.
Participating in multiple regenerative and conservation programs does not necessarily mean you cannot participate in other carbon projects, like the Bayer Carbon Program. Compatibility is what should be considered. From incentives to generating credits and claiming outcomes and payment for specific practices, weighing the specifics of each program can help you determine if stacking might be an option.
For example, the Bayer Carbon Program offers revenue opportunities specifically for no-till, strip-till and cover crop adoption. If your management protocol includes other regenerative agriculture practices, you might still be eligible for other relevant programs in addition to the Bayer Carbon Program if you meet all eligibility metrics.
Are you eligible for cost-share programs?
Regardless of whether the cost-share opportunity is public, private or a combination of the two, Omer encourages farmers to seek out information on the program from a trusted advisor or fellow farmer. He says asking program details and what folks in your local area are doing can be helpful. Flexibility is also key, he says, no matter what type of program you’re interested in.
“If you sign up for a program and it allows you to be flexible and then you find a different program that is a better fit for your farm, then I would encourage you to take advantage of that program,” he says.
Local cooperatives and sustainable systems agronomists like Omer can also provide insight into what program might be the best option for your operation.
“We all need to work together as an industry to help educate not only farmers, but also others in the industry on what types of opportunities are available,” Omer says.
This article was written by Trust In Food in collaboration with Bayer.