Carbon credit programs are certainly nothing new, but they are gaining unprecedented popularity as consumer sentiment has prompted companies like Disney, Microsoft, Google and many others to use the credits to offset some of their carbon emissions.

What that means for farmers is that they have more opportunities to get into the game of folding in additional conservation practices (or often, simply documenting what they are already doing) to generate an entirely new revenue stream.

In some cases, the barrier to entry is quite low – you don’t necessarily have to lock in your entire farm to a multiyear contract. Bayer’s ForGround program, now in its third year, has a minimum enrollment of just 10 acres, for example.

“Someone who’s never done it before, I wouldn’t tell them to just jump in and do no-till cover crops on everything right away,” according to Bayer agronomist Tyler Williams. “Start with your worst field. If you fail, you’re failing small. And the lower production ground is a lot of times just because you need to build up more organic matter there.”

Williams was on-hand to discuss ForGround at the 2024 Farm Progress Show, held Aug. 27-29 in Boone, Iowa. Several other companies were also there to promote their own carbon programs, including Cargill, which moderated a panel of farmers who participate in its RegenConnect program.

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One of the panelists, Iowa farmer Al Laubenthal, echoed Williams’ advice to start slow and gain comfort and confidence with carbon credit programs and the conservation requirements attached to them.

“Start out slow, you don’t have to do the whole farm at once,” he says. “You have to get your mind around the program.”

While many carbon credit programs help outside organizations offset their emissions, RegenConnect is an “inset” that only uses its credits internally, according to Emelia Melson, sustainability sales specialist at Cargill.

“We use carbon credits against our own environmental outcome claims and then our downstream customers,” she says. “So we’re not going and selling the credits to just a random company, we’re buying them into our supply chain.”

The difference between the Bayer and Cargill programs reinforces a basic need to study up on each offering before choosing who to partner with. For example, Bayer’s payment structure is on a per-acre basis based on various eligible practices. Cargill’s is calculated by how many tons of soil carbon have been sequestered on participating acres.

And then there’s the Agoro Carbon Alliance, which was also at FPS and has a different model of operation. Agoro started in 2021 and is owned by Yara Fertilizer. The program requires a longer commitment, but it’s also paired with more intensive assistance from local agronomists.

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“We’re going to have boots on the ground – usually minimum once or twice a year – or as much or as little as the farmer wants to see us,” according to Steve Hasselman, CCA with Agoro.

As with Cargill’s program, Agoro pays participants based on how much carbon they have captured from their conservation practices. This number can vary widely from field to field, so Hasselman encourages curious farmers to use this online calculator to estimate the potential on their operation.

What sometimes gets lost in reporting about carbon credit programs is the fact that the practices themselves have been promoted as improving soil health and yield potential long before there were additional incentives attached, according to Sky Hoffman, Corn Belt sustainable ag manager with Nutrien Ag Solutions.

Nutrien’s FARMSMART program qualifies growers who reduce applied nitrogen by at least 5%, and it has an average payout of nearly $5 per acre in corn. Four other crops also qualify – cotton, sorghum, winter wheat and barley. The payout is calculated by how much nitrous oxide (a greenhouse gas) emissions were reduced, following protocols from the Climate Action Reserve to generate carbon credits.

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“I see sustainability as good agronomy and stewardship that is backed by verified data,” Hoffman says. “It’s based on practices we’ve been recommending all along.”

Lisa Schulte Moore, the co-director of Iowa State University’s Bioeconomy Institute, says she’s not surprised that some farmers find the whole process overwhelming.

“I think the first message is to really do your research to figure out what the best option is for you and your farm,” she says. “I would definitely run any contract by an attorney.”

Also be aware that the USDA passed the Growing Climate Solutions act in 2022 and is trying to help provide guidance around what are called Payments for Ecosystem Services, which could potentially affect the structure of some carbon credit programs in the future, Schulte Moore adds.

Interested in learning more about how to capitalize on carbon credits? Click here for a more comprehensive look from Farm Futures earlier this spring.