As farmers and ranchers are on a quest to understand the financial opportunities to sequester carbon, it’s a journey more farmers are joining.
The latest Ag Economy Barometer from Purdue University found between 30% and 40% of those surveyed say they are aware of opportunities to get paid for sequestering carbon. Yet, to date, only a small group has actually engaged in those discussions.
“On the March survey, which is the most recent survey, just 7% of the people in our larger survey sample actually have engaged in discussions,” says Jim Mintert, who authors the survey. “So, it’s a pretty small group of people who have actually taken that step to have some discussions.”
Mintert says as the survey probed even more, it found a much smaller group has actually taken the final step to seal the deal.
“Just 1% of the people in our survey said that they’ve signed a contract,” adds Mintert. “And I have to throw a caveat there, because when you get down to that small percentage, you’re talking about a handful of people out of our survey. So, that’s a pretty small percentage.”
As more people are aware of programs and companies offering carbon sequestration contracts, why aren’t more farmers and ranchers actually following through and signing a contract? Mintert says it may be the financial piece of it.
“Those that did respond to this suggested that the payment rates simply weren’t high enough to make this very interesting at this point,” says Mintert.
The Ag Economy Barometer found the average carbon contract payment today is less than $20 an acre, with many contracts offering farmers less than $10 dollars per acre.
A recent AgWeb story revealed only a small percentage of the payments are actually going to the farm level. A group is building a national infrastructure program for and around carbon markets through its public-private partnership in the Ecosystems Services Market Consortium (ESMC).
“The way those markets are working right now is there are so many people in the middle working on quantification, working on verification, working on protocol development, and those are very expensive things to do,” says Debbie Reed, executive director of ESMC. “Ultimately, what we see is (only) 5% to 10% of a credit actually goes to the farmer and rancher who created the credit because of all of what I will call the middlemen.”
Read more AgWeb coverage about current carbon contracts and carbon programs.
