In the carbon market, where demand is outpacing supply and price hasn’t yet enticed enough acres, a new partnership has emerged to help bring more farmers to the carbon table.

This newest agreement links Growmark’s “boots on the ground” FS network with Indigo Ag’s carbon farming registry. Lance Ruppert, executive director of agronomy, marketing and technology at Growmark, says the partnership will give farmers the chance to work with someone they already have a relationship with — their local FS crop specialist — and it will help Indigo Ag find acres and carbon credits that it can help sell to companies looking to fulfill their own sustainability goals.

“We want the markets to be long term and be successful. And we want growers to be successful long term,” Ruppert says.

Chris Harbourt, global head of carbon at Indigo Ag, is equally optimistic. “FS retailers in the Growmark System are proven industry leaders in offering trusted expertise to help farmers interpret and simplify the complexities of modern agriculture, and they do so over a broad geographical footprint,” Harbourt says.

Ruppert says Growmark has been studying the carbon markets seriously for nine months and has talked to people at many of the available programs.

“We’re trying to utilize our strengths — our farm-gate relationships — to help growers understand carbon markets, how they work, what the rules of the road are,” he explains. Growmark also wants to help farmers understand what they’re getting themselves into with a carbon contract and whether there’s an agronomic return on investment for the practice they’re considering.

“That’s our bread and butter,” Ruppert adds. “They still have to grow a cash crop, and we can help them navigate through a practice change.”

His team will help farmers collect historic data, should they sign up. Typically, carbon programs are asking for four to five years of crop data at sign-up (or two crop rotation cycles), and then annual data submissions on yield and practices.

Indigo Ag sells carbon credits to companies through a registry platform, which serves to set rules, standards and verification for the carbon credits. At this point, Ruppert says they’re the only program with registry approval.

“That makes buyers feel good about what they’re buying, because Indigo is certifying that it’s a real carbon credit. And on other side, hopefully farmers feel good about what they’re selling,” he explains.

Ruppert says when a farmer signs up for a carbon program through their joint partnership, they’ll get the same price they would get if they signed a contract directly through Indigo Ag; Indigo says farmers will receive 75% of the credit value. Growmark does not profit from those individual contracts, but the company isn’t willing to share financial specifics of its partnership with Indigo Ag.

“While we can’t disclose the financial details of the partnership, the Growmark System believes in investing in programs that help boost the profitability of our farmer-owners while also committing resources to sustainability initiatives in the communities we serve,” says Growmark CEO Jim Spradlin.

Market in development

Ruppert says the most important thing to remember at this point is that prices likely will improve for carbon — so make sure your contract has upside potential. The going rate at this point is $15 to $20 per metric ton of carbon sequestered.

“Indigo has been successful at getting appreciation of that price, and we anticipate those going up in the future. We want growers to participate in that uptick,” Ruppert says.

He adds that at that price, the return on investment for several programs is suspect right now, “unless you really believe in the conservation practice.”

“If the price per ton goes up and the cost to put in a cover crop comes down, then that ROI equation changes,” he explains. “Growers really need to read the contract and need to understand what they’re signing before they sign a carbon market contract.”

Contracts favor permanence, because buyers want to sequester carbon permanently — not just for a year or two. That threshold is 10 years, so most contracts are for five to 10 years. Remember, too, that while the practice change happens directly after harvest, farmers don’t “harvest” carbon until after the next year’s harvest. So while some programs are paying upfront, others might not issue payment until 18 months after sign-up. The good news for farmers is that some programs are leaning toward a front-loaded payment schedule, which pays out more in the early years when farmers incur costs to change practices, and less in later years as they reap soil health benefits.

What should you do if you’re interested? Talk to your FS crop specialist, Ruppert says. Work with him or her to figure out the additional practice you want to use. Lock it in and collect historical data through the winter.

And for as perplexing as carbon markets are to many in agriculture, Ruppert’s take on the new partnership is pretty simple: “In the end, I want to feel good that I’m bringing something to our farmers that I would take to my family or farmer friend.”

In a complicated, still-emerging market, that’s a straightforward approach that might just bring more farmers to the carbon table.