Could carbon cropping reduce the cost of farming?

To make the most out of the budget, most farmers adjust to the demands of changing production requirements and market swings. So, to get a grip on how adjustments in production activities could impact bottom-line profits, detailed planning and good record-keeping can paint a clearer picture of costs and benefits on the farm.

If you’re looking to put money where it makes the most sense while enhancing the farm’s state to minimize the effects of unpredictable events, assess the value carbon cropping can bring to the farm in the context of expenditures. Striking a good balance between enduring profitability and seasonal costs and revenue are both long and short-term goals most farmers wish to achieve. This article discusses the ways carbon farming techniques can help manage costs.

The next big thing in agriculture: carbon cropping

What is carbon cropping? In a way, it is both a way to nourish farm soils and a solution to limit global warming since it has so much to do with regenerative agricultural practices that focus on soil health. The terms climate-smart agriculture and carbon farming imply the same meaning as carbon cropping.

To slow down the loss of fertile soil that grows crops, organic carbon must be put back into farmlands through various farming techniques that allow the soil to keep carbon. The process of carbon sequestration on the farm is what this type of farming entails. Implementing various methods to nourish soil carbon also draws carbon dioxide from the atmosphere at a more efficient rate than conventional farming practices. When practiced on a wide scale, it is estimated that carbon farming can draw down between 0.90 and 1.85 Pg C per year.

There is a growing understanding that for farmers to remain profitable while managing resilience and reducing greenhouse gas emissions, climate-smart agriculture must do double duty. Wider environmental impacts are affected by carbon cropping. But another important element should be addressed in conjunction. There should be economic incentives for farmers who shift to carbon farming practices that benefit human well-being and the environment.

Practices that impact profits in carbon farming

Successful carbon sequestration through farming generates carbon credits or certificates that are sold to other businesses looking to lower their greenhouse gas emissions. Earnings from agricultural credits are one way for carbon farming to expand the revenue potential of a farm.

Transitioning to regenerative agriculture also has practical implications for the farm. Soil carbon management in the fields can result in improved yield stability, profitability, and enhanced resilience, while also lowering greenhouse gas emissions. In the process, a salient feature of carbon farming is how it can have an impact on farming costs.

While the effects and implementation of carbon cropping look very different for every farm, managing cost efficiency is a good metric to keep track of to make better decisions for your business.

Cutting up costs that eat up farm profit

Each farm is managed differently. And here’s a look at some of the ways on-farm spending is driven by key farm inputs.

• Fuel

While the cost of diesel has always fluctuated depending on global supply and demand, it is forecasted that farmers might just have to get used to fuel costs staying on the upper end due to supply disruptions.

On top of record fuel prices, farmers are also experiencing difficulties acquiring equipment parts and necessary gear to run farm machinery.

Gasoline and diesel prices have shot up globally due to sanctions against Russia, a major supplier of oil worldwide. With higher demand and decreased supply, a fuel shortage is hitting hard on farmer costs.

• Power

Fuel prices aren’t the only aspect of farming that’s eating up farm budgets. Regional disturbances and political tensions are also causing gas prices to remain volatile.

Gas production in Europe has been interrupted by the Ukraine war and diminished support for Russian supplies, including natural gas. However, electricity costs have been on the rice since 2020 and supplies are slow to recover since. The turmoil in Europe will likely sustain the price pump on power for longer.

• Fertilizer

The extreme prices of gas and fuel also impact fertilizer production. Coupled with a troubled supply of raw materials, the global fertilizer industry is left ailing with supply and cost complications.

Ammonium nitrate, urea, potash, phosphate, and other raw materials are needed to produce various chemical soil inputs due to supply chain issues emerging from the COVID19 pandemic and political instabilities. The US sanction on the biggest global supplier of potash, Belarus, has directly impacted potash supplies. Notwithstanding supply and freight issues related to the conflict in Ukraine.

What this all means is that farmers are left on the receiving end, with up to a 300% price increase in fertilizer supplies. Costs of fertilizers are forecasted to keep pummeling the agriculture industry within the short- to mid-term.

Cultivating new farm practices to solve recurring troubles

The soaring costs of different farm inputs are straining farmer profits. If the instability in supply and sources is a sign of what the next decades will bring, many farmers are taking it as a way to update the way they manage their farms that also fulfills improved environmental and climate requirements.

It’s no longer enough to continue with the same methods when price and supply squeeze demand change. Otherwise, farming won’t just yield enough profits for a viable business.

A sustainable solution is carbon farming. Where practices that improve soil organic C can bring changes to how the farm is budgeted. The list below shows some of the ways costs can be minimized on-farm.

Together with an agronomist or a carbon program advisor, check which carbon cropping practices will work best during carbon farm planning.

Carbon farming practices that influence farm inputs

• Reduced fertilizer application: Optimizing fertilizer application is one way to decrease dependence on inorganic additives to the soil while keeping soil C levels in check. One way to do this is by keeping track of how much fertilizer is being applied as well as making sure the rate corresponds accordingly to the requirement of the crops. It isn’t uncommon to see other farming techniques such as sowing cover crops and nitrogen-fixing plants to manage nutrient levels in the fields. A decreased use (or even elimination) of fertilizer can have a positive effect on the expenditure of the farm.

• Reduced to no-tillage: Breaking up soil surface doesn’t just harm soil structure, it can also be a costly farm task, especially at times when fuel prices come at a premium. Reducing how much the soil is broken up through conservation tillage practices improves soil health while helping keep soil C intact. This also means that there is less use for fuel-run equipment to pass the fields, further keeping costs at a manageable level.

• Improved task efficiency: Keeping the farm running relies a lot on how operations are managed. Daily and seasonal tasks, when managed effectively, can bring about reductions in costs. Task management tools can give better insight into how well farm operations are accomplished and in which areas can use some adjustments. Tasks that are duplicated or abandoned can be costly for a farm.

• Fuel-use efficiency: Making sure that equipment and farm machinery are calibrated according to requirements can help save on fuel and power costs when running faulty devices. While this task could eat up a bit of time, cost savings is a worthwhile reason to check if the equipment is running smoothly or in need of repair.

→ See what other farming practices can work on your farm: 10 best carbon farming practices for soil health and income

How to start carbon cropping

If you seek guidance on carbon farming, start with a carbon program that provides direction on how to start earning from carbon cropping with a realistic plan in mind. Carbon farming is a sustainable solution to soil health that improves soil carbon capture by providing new sources of income to farmers such as sequestration credits.

Attaining measurable changes in soil C sequestration can also introduce cost-effective practices that can help cushion farmers from price hikes in farm inputs. Talk to us about our carbon program pre-payments to make your transition to climate-smart farming easier and more worthwhile. 

Sources:

• Zomer, R.J., Bossio, D.A., Sommer, R. et al. Global Sequestration Potential of Increased Organic Carbon in Cropland Soils. Sci Rep 7, 15554 (2017). https://doi.org/10.1038/s41598-017-15794-8

• Mattila, T. Hagelberg, E. Söderlund, S. Joona, J. (2022) How farmers approach soil carbon sequestration? Lessons learned from 105 carbon-farming plans. Soil and Tillage Research, Volume 215, 2022, 105204, ISSN 0167-1987, https://doi.org/10.1016/j.still.2021.105204. https://www.sciencedirect.com/science/article/pii/S0167198721002774

• Evans, M. Carwardine, J. Fensham, R. Butler, D. Wilson, K. Possingham, H. Martin, T. (2015). Carbon farming via assisted natural regeneration as a cost-effective mechanism for restoring biodiversity in agricultural landscapes/ Environmental Science & Policy, Volume 50, 2015, Pages 114-129, ISSN 1462-9011, https://doi.org/10.1016/j.envsci.2015.02.003. https://www.sciencedirect.com/science/article/pii/S1462901115000222