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Climate change and greenhouse gas emissions have been hot topics for several years. For the most part, farmers and “Big ag” have been viewed as contributing to the cause of the problem. Now, the world is starting to realize agriculture can actually be part of the solution, a realization that helped coin the term “climate smart agriculture.”
U.S. Department of Agriculture (USDA) defines climate smart agriculture as incorporating practices that reduce greenhouse gas emissions or sequester carbon. In the last two months alone, the USDA has made two announcements pledging large amounts of additional funding and programs to support climate smart agriculture. For those wondering if carbon and ecosystems markets are going away anytime soon, this should be a sure sign that they are here to stay.
What new programs is USDA funding and what does it mean to U.S. farmers and the carbon market?
EQUIP Cover Crop Initiative
USDA’s Natural Resources Conservation Service (NRCS) has recently partnered with Farmers for Soil Health, an initiative of the United Soybean Board, the National Corn Growers Association and the National Pork Board. This initiative has a goal of doubling the number of corn and soybean acres using cover crops to 30 million acres by 2030.
To help achieve this goal, NRCS is investing $38 million in a new Cover Crop Initiative in 11 states, including Arkansas, California, Colorado, Georgia, Iowa, Michigan, Mississippi, Ohio, Pennsylvania, South Carolina and South Dakota. Sign-up for this program was held at the state level and applications were selected for funding on February 11. Even though the deadline has passed, it is never too early to visit your local NRCS office and let them know you are interested in this type of program for 2023. In 2021, NRCS provided technical and financial assistance to help producers plant 2.3 million acres of cover crops through EQIP. We hope this number continues to grow each year.
EQIP Conservation Incentive Contracts
Conservation Incentive Contracts offer producers an annual incentive payment to implement new management practices and monitoring activities to help manage, maintain and improve natural resources. Some examples of approved management practices include irrigation water management, drainage water management, feed management, and residue and tillage management. The practices are aimed at combating key concerns, such as degraded soil and water quality, available water and soil erosion. The duration of the Conservation Incentive Grant is five years. The 2018 Farm Bill created the new Conservation Incentive Contract option, and it was piloted in 2021 in four states. The new announcement opens it up nationwide. While the NRCS accepts applications for conservation programs year around, each state may have different sign-up dates. To apply, visit your local NRCS office to learn about the requirements and deadlines for your state.
Conservation Stewardship Program (CSP) Re-Enrollment Option
In previous years, if a CSP participant did not re-enroll the year their contract expired, they were ineligible for the program for two years. This includes growers who tried to re-enroll but the renewal was not granted due to lack of CSP funds. This new update allows a grower to immediately re-enroll in the program following an unfunded application to renew an existing contract. In other words, USDA is now waiving this two-year ineligibility restriction for all CSP applications.
Post Application Coverage Endorsement
USDA’s Risk Management Agency (RMA) announced a new option for insurance coverage, the Post Application Coverage Endorsement, for producers who split apply fertilizer on corn. When farmers split apply their nitrogen, they are helping the environment by preventing run-off and leaching into waterways and ground water, and helping their pocket book as well. PACE provides payments for the projected yield lost when producers are unable to make their nitrogen applications during the V3-V10 corn growth stages due to field conditions created by weather. PACE is only offered in select counties in 11 states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. The deadline to apply is March 15, 2022. A list of available crop insurance agents can be accessed at www.rma.usda.gov.
Pandemic Cover Crop Program
Farmers who have coverage under most crop insurance policies are eligible for a premium benefit from USDA if they planted cover crops during this crop year. The Pandemic Cover Crop Program (PCCP) is also offered by USDA’s RMA and has provided $59.5 million for producers planting cover crops. The intent is to reduce producers’ overall premium bills and help them maintain their cover crop practices. PCCP provides support of up to $5 per acre when qualified cover crops are planted and reported to FSA. The deadline for applying is March 15, 2022, and can be done at your local FSA office.
Partnerships for Climate-Smart Commodities
Through the Partnerships for Climate-Smart Commodities, the USDA will provide a series of grants totalling up to $1 billion to support the production and marketing of climate-smart commodities. This funding will be awarded to proposals that show interest in providing voluntary incentives through partners to producers and landowners. Each proposal should include a plan to pilot implementation of climate-smart agriculture, a quantification, monitoring, reporting, and verification plan, and a plan to develop markets and promote climate smart commodities generated as a result of project activities. If interested in applying, applicants need to submit their applications via Grants.gov by 11:59 p.m. Eastern Time on May 6, 2022, for proposals ranging from $5 million to $100 million, and June 10, 2022, for proposals ranging from $250,000 to $4,999,999.
What does this mean for the U.S. farmer and the carbon market?
The U.S. farmer is currently at the forefront of the climate change discussion. The USDA has recognized that climate smart agriculture can make an impact on our environment, and the financial burden should not be on the U.S. farmer to implement these practices. By taking advantage of these funding opportunities, a farmer can position himself or herself well for carbon and other ecosystems markets, as well as improve soil health.
With demand for carbon credits outstripping supply, let’s hope the additional funding and programs from the USDA enable more farmers to transition into climate smart agriculture opportunities.
If you are interested in learning more about the Truterra carbon program, visit www.truterrag.com/enroll
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