Farming practices generate revenue through carbon credit program

CHICAGO — Farmers are receiving payments for work they are doing on their farms to sequester carbon through the Indigo Ag program.

“We have completed the production of nearly 19,000 ag carbon credits to be issued by Climate Action Reserve,” said Ron Hovsepian, CEO of Indigo Ag. “We are able to use science and technology to measure and verify the carbon removal from the atmosphere that came from 175 farmers.”

This first crop, Hovsepian said, is just the beginning.

“We can deliver an immediate, scalable and affordable solution to face the climate change and make an impact,” Hovsepian said.

“We expect to unlock a repeatable process that creates a new revenue stream to farmers to enable the durability of the farmers’ journey to regenerative farming and sustainable practices not only in the U.S., but around the world,” he said.

Most farmers want to participate in efforts to reduce the amount of carbon emitted from conventional farming practices, said Dan Glickman, former secretary of agriculture. “The trick is how to provide incentives to farmers to participate and how to properly compensate them for doing that,” Glickman said.

Agriculture is not the only industry involved in carbon sequestration.

“But it is a major participant because 70% of the land in our country is held by private landowners, so the opportunity to make an impact is great,” Glickman said. “Farmers will benefit not only from the sale of traditional commodities, but also by the carbon credits that will provide an additional source of income.”

Indiana farmer Chris Lehe has received his first carbon credit payment through the Carbon by Indigo program.

“My cousin and I got involved because we had a landlord that wanted to convert her farm to no-till for soil conservation purposes,” Lehe said. “We were at a winter marketing meeting where an Indigo representative talked and we signed up because we thought it was a no-brainer.”

Lehe started working with Indigo Ag in 2018.

“Indigo has made a lot of changes and every change seemed to benefit the farmer,” he said. “No-till is not without its challenges, but as we no-till on certain acres, if we continue to see the improvements in the soil we will consider expanding them.”

All of Lehe’s acres are enrolled in the Indigo Ag carbon farming program.

“The 860-acre farm that we converted to no-till is not quite 20% of our acres,” he said. “We grow corn and soybeans and most of our corn is popcorn.”

Since the volatility in farming is extreme, Lehe said, adding carbon credit revenue is a great way to stabilize some of that volatility.

“For our first carbon credit harvest we earned almost $25,000 for a few hours of data entry,” he said.

Entering data is pretty simple with the technology Lehe has on his equipment.

“I use MyJohnDeere to upload my farm information to Indigo’s data center,” he said. “I can do whatever I want on my farm ground as long as I keep the data entered, the land is still enrolled.”

No-till is the main practice that Lehe is currently doing for carbon sequestration.

“All our bean acres are no-tilled,” he said. “We have also done some cover crops through a three-year program from NRCS.”

Ninety-five percent of the work in carbon farming is the farmer making the decision to make a change and then doing the practice such as no-till or planting a cover crop, said Chris Harbourt, chief strategy officer for Indigo Ag.

“Five percent is working with Indigo Ag to turn that into a revenue stream,” Harbourt said.

For example, a farmer may choose to plant a cover crop, and after the primary crop is harvested, data from the farm is entered into the Indigo Ag website.

“We also need data from two crop rotations prior to the year the new practice was started,” Harbourt said. “We do soil sampling in the fields and there is no cost to the farmers because they’re taking enough risk to make the change.”

Indigo Ag writes a report that includes every farmer in their program which is submitted to a third party for verification.

“It is reviewed, verified and submitted to the registry which issues credits,” Harbourt said.

Indigo Ag currently has 17 carbon credit buyers including companies such as JP-Morgan Chase, Blue Bottle Coffee and New Belgium Brewing.

“They are paying $40 per ton per year of carbon removed which is determined by a combination of soil sampling and modeling based on the practice change,” Harbourt said. “Seventy-five percent of that goes to the farmers and 25% goes to Indigo.”

The Indigo carbon farming program is currently available in 30 states.

“Eligible crops are corn, beans, wheat and cotton in states mainly east of the Rockies,” Harbourt said.

All of Indigo Ag’s modeling process is open to the scientific community.

“The submission to Climate Action Reserve is all open and transparent,” Harbourt said. “It has to be because when you’re assuring a grower and buyer that an invisible gas is sequestered in the soil it has to be open or no one is going to believe you.”

This can be a part of that future that includes better soils and climate resiliency, said Keith Paustian, professor at Colorado State University.

“I hope this is part of a new green revolution and a shift in our agricultural paradigm,” Paustian said.