More than nine out of 10 farmers are aware of carbon markets but only a fraction of them are participants, said a USDA report on Monday that listed several barriers, including a “limited return on investment as a result of high transaction costs.” Carbon contracts have been promoted as a way for farmers to be paid for locking carbon into the soil as part of their day-to-day operations.
“This landmark report demonstrates both the potential and the challenges that carbon markets present for agriculture and forestry,” said Agriculture Secretary Tom Vilsack.
The report was the first step in the implementation of the Growing Climate Solutions Act, which was enacted at the end of 2022. The next step is for USDA to decide whether to set up a Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program. It would assist farmers interested in carbon markets and create a system to register market verifiers.
“Voluntary carbon markets offer an opportunity for farmers, ranchers, and forest owners to be compensated for reducing their environmental footprint,” said the Food and Agriculture Climate Alliance. “FACA continues to support the establishment of a USDA program to ensure producers have access to reliable information and resources.”
“High rates of awareness of carbon markets have not translated into high rates of participation among landowners and operators,” said the report. The expense of quantifying, verifying and reporting carbon sequestration can erode or erase income to the farmer, who may be required to adopt new crop practices or buy equipment to comply with the contract. Other obstacles were “conservative accounting of benefits generated; limited access to early adopters; stringent permanence requirements; small scale of agriculture projects; confusion over the options; and lack of demand,” it said.
The 88-page report is available here.