A year after pledging to convert 10 million acres of U.S. farmland to regenerative practices within a decade, Cargill Inc. says it developed a system for paying farmers and measuring improved carbon absorption in their soil.
Its new "Regen Connect" program, unveiled Thursday, pays farmers for measurably increasing the carbon sequestered in their soil by adopting cover crops and reduced- or no-tillage practices.
The Minnetonka-based agribusiness enrolled hundreds of farmers, accounting for "hundreds of thousands of acres" in the program's first year, said Ben Fargher, Cargill's vice president of sustainability for its North America agriculture supply chain.
Climate scientists, food companies and many farmers see the potential of this system, but debate how — or even if — large-scale operations can adopt such practices.
"Farmers are inherently looking at the sustainability production of their farm, so it makes sense to them," Fargher said. "For us, the key is to make it about the economics and how it suits their particular business."
For Cargill, supporting regenerative agriculture is a twofold benefit: It helps them meet their corporate environmental pledges while also responding to pressure from their customers, like food companies, who want to offer consumers the assurance their food production isn't harming the planet.
"We've got these global environmental challenges, we have got all these commitments from our [food company] customers, and we actually know that farmers can be part of the solution — and produce food and environmental outcome at the same time," Fargher said.
The food and agriculture community over the last five years has increasingly embraced the idea of regenerative agriculture — a suite of farming practices aimed at turning depleted soil into healthy earth teeming with life. Advocates say it's a crucial way the food system could slow, or even reverse, the effects of climate change.
But for some farmers, economic risk wasn't matched by the potential payout. That's why Cargill, a middleman between growers and packaged food companies, created the "Regen Connect" program.
The company uses a predictive modeling technology from Regrow, a carbon measurement firm, to forecast precisely how much additional carbon an individual farmer could absorb on any given field by implementing these regenerative processes. Cargill then puts a price on that based on the carbon-trading markets.
It pays the farmer 50% of that upfront and the rest of it at the end of the growing cycle after the soil's carbon level is measured and verified.
A new study set to be released later this month by the Soil Health Institute, and supported by Cargill, seeks to allay some fears. The survey of 100 farmers who had long ago adopted these practices found their costs were lower and revenue higher as a result of these practices.
Most saw yields and profits increase while the average cost to grow corn and soybeans decreased by $24 and $16.57 an acre for corn and soybeans, respectively.
But the average length of time these farmers have been using no-till technique is 19 years, and nine years for cover crops.
There are immediate cost savings though, said Wayne Honeycutt, chief executive of the Soil Health Institute.
"If you are converting to no-tillage, you are bringing down your cost almost immediately because you reduce your fuel use and wear-and-tear on your tractor," Honeycutt said. "A number of these farmers got into it because economically it was either try some of the low input approaches or get out of farming."
Still there's a widely held belief that yields could decline for the first two to three years as farmers learn the system. "That's why it's so important to have on-farm data ... in order for it to work for them, their climate and their soils and their production system," Honeycutt said.
Fargher of Cargill said that's the value he hopes the company can offer with its new program.
"[Our tool] takes in data from the farmer, about their fields, about their rotations, about their soil type and their planting date," he said. "It combines that with remote sensing ... and it produces the modeling."
Cargill's program is focused solely on carbon, a key indicator of soil health but not the only one. Others include nutrient cycling, water cycling, water infiltration and storage vs. water runoff.
"Sure, carbon is involved because carbon influences these soil properties, but soil health goes beyond just a carbon-bank approach and carbon-credit approach," Honeycutt said.
Cargill is providing a private-sector avenue for financial incentives, but farmers also have access to others through the U.S. Department of Agriculture.
Honeycutt says it is economically beneficial to implement better soil health practices even without financial aid, but added he sees the benefit of providing that for more hesitant farmers.
"There's never enough [federal] money to help everyone," Honeycutt said. "There are more people adopting these practices than receive that financial assistance from the government."