Reuters – Global commodities trader Cargill Inc. starting this spring plans to pay American farmers for capturing carbon in their field soils and reducing fertilizer runoff, an executive said.
The Soil and Water Outcomes Fund, a partnership with the Iowa Soybean Association and third-party verification company Quantified Ventures, will then sell the environmental credits created to polluters, such as cities and companies, including Cargill itself, said Ryan Sirolli, director of row crop sustainability at Cargill.
Why it matters: The fund seeks to monetize the environmental benefits of farming practices, such as no-till farming and use of cover crops to prevent erosion.
It also follows rising criticism of intensive farming practices and the companies that rely on them. Environmentalists criticized Cargill last year for delaying a self-stated goal of ridding its supply chain of crops produced on deforested land.
Farmers in Iowa have enrolled almost 10,000 acres in a pilot program this spring, but the group is aiming to expand the program next season and broaden it beyond Iowa, Sirolli said.
Farmer Lance Lillibridge of Vinton, Iowa, enrolled about 300 acres in the program this season and expects to get at least $35 an acre, which will offset some of his planting costs.
“For a farmer, our margins are really small. In fact, right now there’s no margin at all…. This is the first time that we are rewarded for our sustainability efforts,” Lillibridge said.
Funded by grants from Cargill and the Walton Family Foundation, the Soil and Water Outcomes Fund will pay farmers $30 to $45 per acre this season, depending on what environmental results are confirmed, said Adam Kiel, director of conservation for the Iowa Soybean Association.
“We’ve got ambitions to go more broadly beyond Iowa in future years,” Kiel said. “Farmers view this as another revenue source on their farm that’s not a government payment.”