A new report from the Environmental Defense Fund aims to break down the barriers between investors and producers looking to improve sustainability on the farm.
investing conservation practices on the farm can be an expensive project, but it has the potential to pay off in the long-term resilience and environmental benefits. The Environmental Defense Fund hopes to encourage more investment with their latest report.
Research Analyst and co-author of the report, Vincent Gauthier states, “The farm economy has been facing numerous challenges including the flooding and severe weather we’ve seen in the last few years, and we know that farmers in order to prepare themselves and transition their operations to become more resilient to those severe weather challenges, they are going to need some private financing to help them make those transitions.”
He says that one potential solution is shifting from annual loans to multi-year loans for transitional financing.
“We know that these practices, such as conservation tillage and cover crops, take time for farmers to adopt and to get those practices right in terms of financial outcomes of those practices, but the current financial support that farmers are getting are on an annual basis,” he explains, “So, transition financing such as multi-year loans can help farmers adopt these practices and get those practices right over a few years, before having to repay the loan.”
He says that another option is environmental markets, to give farms another source of revenue.
It is an idea the American Farm Bureau Federationalso supports and the recently introduced bipartisan Growing Climate Solutions Act would establish a USDA certification for carbon credit.
“We know that these practices and farmers that adopt these practices provide environmental benefits, including water quality, reduced carbon emissions to downstream communities,” he adds. “So environmental markets provide ways in which farmers can actually be compensated for the environmental benefits that they’re providing to others.”
The study is fully funded by a one million dollar USDA Conservation Innovation Grant. Since its creation in 2002, the program has awarded $286 million dollars to 711 different groups working to advance conservation.
According to Gauthier, “One of its goals the USDA aims to improve stewardship and sustainability for agricultural lands, but their funding is not enough in order to adopt conservation and sustainable practices at the scale and pace we need them. To fill that gap, the USDA has been pivotal is supporting the research and development of new solutions that can bring private investments in order to fill that funding gap to help farmers.”
In addition to potential conservation investment solutions, the report includes five case studies of companies currently using unique investment models for agriculture.
Related:
Ag groups offering support for the Growing Climate Solutions Act