"Driving rain pelted the windows of “the Tower,” a
second-story glass enclosure in Ray Gaesser’s home that provides a view for
miles of the gentle, rolling fields around Corning, Iowa. Inside, away from the
elements, Mr. Gaesser pondered what the coming year might bring for farmers.
As tractors and planters throughout the Midwest rolled into
fields like the ones near his house earlier this year, Mr. Gaesser, 69, was
hopeful that soaring grain prices and heightened global demand for food would
translate into robust revenues. But he also expected that sharply higher costs
for fuel, fertilizer and other necessities would cut deeply into profits.
And then there is Big Food.
Companies like PepsiCo, Cargill, Walmart, and General Mills
are trying to convince farmers like Mr. Gaesser to adopt new climate-friendly
agricultural techniques through a variety of financial incentives and programs.
They have good reason. Together, these companies have pledged that at least 70
million acres, or roughly 18 percent of the nation’s total cropland, an area
about the size of Nevada, will be operated using regenerative agriculture
techniques by 2030.
Through photosynthesis, plants — whether corn or trees —
convert carbon dioxide from the air into energy that is stored in the soil.
Regenerative farming techniques, such as planting a cover crop during the fall,
allows that process to continue throughout the winter months when the soil
would normally be bare.
But there are several complicating factors. The programs
sponsored by the companies, which run from cost-sharing agreements with farmers
to guarantees to cover any declines in yields to complex, multiyear contracts
to pay for carbon dioxide that is captured and held in the soil, are largely
still in pilot stages and amount to only a fraction of the companies’ overall
goals. And many farmers remain skeptical of the initiatives, arguing that the
incentives being offered simply aren’t enough to cover the additional costs these
new techniques will incur.
“What is it worth to them for us to farm differently?” Mr.
Gaesser asked.
Mr. Gaesser embodies many of the competing forces in the
farming industry. A Republican who advised former President Donald J. Trump on
agricultural issues, Mr. Gaesser is also a vocal proponent of climate-friendly
farming methods and uses several across the 5,400 acres he farms with his son.
But he does not believe that farmers should foot the bill for overhauling
decades-long practices.
“There has to be value, or opportunity, throughout the whole
food chain,” he said. “Are customers willing to pay more for food that is
farmed in a climate-friendly manner?”
The global food system, which accounts for a third of the
world’s greenhouse gas emissions, is under pressure from consumers and investors
to create tangible plans to reduce that output. At the same time, they are
undertaking other initiatives, like eliminating plastic in packaging and
reducing water usage, to make their products more sustainable.
But attempts to achieve those climate goals come at a
tenuous time for the global food system. The pandemic, supply chain breakdowns
and the sanctions on Russia, one of major breadbaskets of the world, has food
companies scrambling — and paying higher prices — for the grains necessary for
the bulk of the food they produce.
The current agricultural system is not “flexible enough to
rapidly reduce its greenhouse gas emissions,” said Hannah Birgé, a senior
scientist of food and water for the Nature Conservancy, a nonprofit that has
teamed up with corporations to meet sustainability goals. “It’s not working for
the farmer, not working for the supply chain and not working for the consumer.”
But who should ultimately bear the costs for food grown in a
more sustainable manner — farmers, corporations, consumers or the government
through federal programs — is not the only question swirling around
regenerative agriculture.
Interviews with academics, nonprofit organizations,
corporations and farmers indicate there is no standard definition of what
constitutes regenerative agriculture. And practices that work on one piece of
land may not work on another.
But perhaps the biggest barrier is farmers themselves, with
their age, experience, culture and politics presenting challenges. For decades,
the average age of farmers in the United States has been creeping higher; in
2017, was nearly 58 years old. Experts say that convincing farmers to give up
yearslong techniques for newer approaches is a difficult task.
And while there has been more of an acceptance among farmers
in the heartland that climate change is occurring, there are still plenty who
view the discussion about solutions as talking points for Democrats. They chalk
up events like increased droughts and the Great Flood of 2019 to long-term
weather cycles.
“They know there are bigger rainfall events, maybe more than
normal, but the political climate in Nebraska is not conducive to talking about
climate change,” said Bob Bettger, 74, a fifth-generation farmer in Fairmont,
Neb. “We’re a deep red state, and most farmers pretty much think that the
climate changes naturally no matter what you do.”
Nonetheless, last year, Mr. Bettger, who has retired from
active farming but wants to protect the wildlife near his fields, enrolled 240
of the 1,500 acres of land he owns into a regenerative agriculture program that
will pay him for carbon dioxide that his land retains in the coming years.
“If you want to see change,” he said, “there has to be an
economic incentive for farmers.”
‘A new risk’
After maneuvering through the pandemic, labor shortages and
then various supply-chain scarcities for key ingredients, Big Food in recent
months has had to contend with a new challenge: inflation.
Companies have already raised the prices of cereals, chips
and cookies to cover the increased costs for the corn, soybeans and wheat that
help make them.
Now, as they consider ways to achieve their sustainability
goals, little is said about paying an even higher price for sustainably grown
crops.
Some pointed to a survey released earlier this year by the
International Food Information Council, a nonprofit that is financed by the
food and beverage industry, that found the majority of consumers were not
willing to pay more for food that is grown using regenerative agriculture
techniques.
Instead, much of the focus centers on convincing farmers
that the regenerative agriculture practices will pay for themselves over time.
Last year, the food and beverage giant PepsiCo set an
ambitious goal. By 2030, seven million acres — its entire global farming
footprint — would use regenerative agriculture techniques. To accomplish that,
PepsiCo, which had $7.6 billion in profits last year, made an offer to share in
the costs of some pilot programs. If the farmers adopted climate-friendly
techniques on a few acres of their farmland, PepsiCo would pay them $10 to $40
per acre for a year. In the first year, PepsiCo enrolled 345,000 acres in
various programs and believes there could be an “exponential curve” in growth
in the coming years.
“We believe there is a period of time where farmers need a
bridge to get through the process,” said Jim Andrew, PepsiCo’s chief
sustainability officer. “What we have found is they try it and then, in the
second year, they dramatically expand the square footage using the techniques
because they see the benefits.”
Last year, a nonprofit called the Soil Health Institute
conducted and Cargill funded a study that looked at 100 farms that used
regenerative agricultural techniques. It found that 67 percent of them reported
higher yields, producing more corn or soybeans. In addition, costs dropped and
incomes surged.
But others say changing the composition of the soil can take
years, requires consistent effort, and that it was still an open question
whether this type of farming is financially beneficial for farmers.
“From what I see, most corporations are willing to pay, but
they don’t have a clear vision yet for how much this will cost or for how
long,” said Debbie Reed, executive director of Ecosystem Services Market
Consortium, who works with corporations and farmers to develop climate
programs. “Farmers have to have skin in the game and understand that if they do
not make these changes, they will be out of business.”
Though “regenerative agriculture” may be a popular buzz
phrase in climate circles, the practices behind it are anything but new. For
decades, a small contingent of farmers have taken steps, like reducing or not
tilling a field after harvest, to prevent soil erosion; planting cover crops
during the fall; rotating different crops each year to avoid depleting the soil
of key nutrients; and controlled grazing of fields by cattle and other
livestock.
Because technological leaps resulted in improved seeds,
synthetic fertilizers and other products that increased crop yields in order to
meet higher demand, wider adoption of these farming methods haven’t caught on.
Moreover, farmers have been discouraged from diversifying
what they plant or taking risks with new sustainable farming practices because
of existing government programs, like the federal crop insurance program, a
safety net developed during the 1930s that pays farmers for poor or lost
harvests. Under the program, farmers buy insurance for commodity crops like
corn and soybeans based on past years’ yields.
Asking farmers to reverse decades of practice and take on,
in some cases, new expense and potential risks with regenerative farming has
been a tough sell.
The soil on roughly 21 percent of farmland wasn’t tilled
continuously over a four-year period while only 12 percent was planted with
cover crops, according to a 2017 survey by the U.S. Department of Agriculture.
Most experts expect to see those percentages climb when the
latest U.S.D.A. survey, which is done every five years, is conducted this year.
Part of the reason that adoption for cover crops has been
slower is cost.
Academics from Ohio State University and the University of
Illinois estimated earlier this year that it cost $37 an acre in seed,
equipment cost and labor to plant a cover crop each year. For a 300-acre farm
in Iowa, that’s an additional $11,000 in costs each year, and experts say
inflation has likely driven prices even higher.
But time is also a factor. “We’re planting a cover crop at
the same time we’re trying to harvest a primary crop that is our paycheck for
the next 12 months,” said Nathan Anderson, a board member of the Practical
Farmers of Iowa, a nonprofit organization that works with farmers and corporations
to move to more climate-friendly operations. “That’s a new risk.”
Still, as he steered his pickup around the deep ruts filled
with water from recent rains on the gravel roads around Aurelia, in northwest
Iowa, Mr. Anderson, 34, said the new sustainable techniques he started to use
on land he farms with his family have shown results.
When the Iowa winds blow, the topsoil on their fields stays
put. When the spring rains come down, his soil infiltrates the water better. He
attributes these changes to not tilling the soil and planting a variety of
cover crops during the winter.
But when asked whether he has seen an improvement in yields
or farm profitability, Mr. Anderson shrugged.
It is likely, he says, his overall costs have gone down,
noting that he certainly uses less fertilizer and herbicides, but he does incur
additional costs with planting cover crops. Yet the only change he sees in
yields occurs during extreme weather conditions, like drought.
“In fields that got less rain last year, the yields were
less than other areas, but more than what we saw before we started using some
of these techniques,” Mr. Anderson said. “When your crop can make it to the
next rain without wilting, that’s a beneficial thing for yields.”
Seeing gold in carbon dioxide
These days, the latest gold rush is found in the Midwest.
There, amid the dark, crumbly soil, food companies and others say lies a new
product — and revenue stream — for farmers: carbon.
Last year, Cargill began offering farmers $20 for every
metric ton of carbon dioxide they were able to sequester, or coax from the
atmosphere and into the soil, in their fields through regenerative farming
techniques.
Cargill, which is privately held, set a target two years ago
that 10 million acres of land in North America would be farmed sustainably by
2030. Cargill said it has 360,000 acres so far involved in a variety of regenerative
agriculture programs, but did not break out how much of those involved carbon
sequestration. “We see a tremendous amount of interest from the farmer and
ranching community,” said Heather Tansey, the head of Cargill’s environmental
sustainability group.
Cargill is one of many corporations and companies
crisscrossing the Midwest, offering contracts to farmers for the carbon dioxide
they sequester in their soil. For Cargill, that carbon can be counted as part
of its greenhouse gas emission reduction goals.
Other groups are selling the carbon credits. Last year,
Microsoft, which has a goal to be carbon negative by 2030, paid $2 million, or
$20 per metric ton, for carbon that was sequestered in land farmed by members
of the Land O’Lakes agricultural cooperative and some independent farmers to
offset its own greenhouse gas emissions.
But many farmers say the prices they’re being offered are
too low.
“We looked at the Cargill program and we do think that,
eventually, selling carbon offsets will be a good way for farmers to cover or
even make money from regenerative farming,” said Julie Miller, who with her
husband, Brent, and her daughter Allie farm 3,000 acres near Onawa, Iowa, some
of which has been in the family for six generations. “But it’s so early in its
development that the concern is you sign a contract to sell carbon for a few
dollars when, down the road, it could be worth much more.”
This year, Cargill is offering farmers $25 per metric ton.
But experts say it can take years for carbon to accumulate
in the soil, and that it can be time-consuming and costly to measure and verify
the changes in soil in fields.
“Soil carbon sequestration is a work in progress,” said Ms.
Reed of Ecosystem Services Market Consortium, which has worked with General
Mills, Archer Daniels Midland and others on various pilot projects. “Many
programs have gone straight to new technologies, and not all of them know what
they are doing, and/or are cutting corners.”
Ray Gaesser and his son Chris in Corning gave up on a carbon
sequestration project when it asked for proof that they had not tilled the land
for a period of time.
“How do I prove that?” Chris Gaesser, 36, who returned to
the farm after graduating from Iowa State University with a degree in agronomy,
asked with a laugh. “Show you a picture of the tractor in the shed?”
The two men believe, particularly as a younger generation
takes over, that farming is changing and sustainable farming practices will
continue to grow. But they struggle to see how the various climate goals will
be achieved under current incentive programs.
“Our business model is to protect what we’ve been blessed
with, but you still have to feed your family,” the elder Mr. Gaesser said.
“What is the bottom line for us to do this?””
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