By Tom Driscoll, Director of NFU Foundation and Conservation Policy

Producers face many severe challenges stemming from climate change. A 2013 report published by the U.S Department of Agriculture, Climate Change and Agriculture in the United States: Effects and Adaptation, estimates that “under climate change, losses to corn production in the United States from precipitation extremes would be expected to increase substantially and by 2030 could average $3 billion per year.” But, as discussed in previous Climate Column posts, farmers and ranchers have a lot of options to mitigate and adapt to climate change.

In the current extended period of low commodity prices, producers may be enthusiastic about the possibility of receiving payments for environmental services. Properly valuing on-farm stewardship could create a meaningful new income streams for family farmers. The Coalition on Agricultural Greenhouse Gases (C-AGG) is a coalition of stakeholders from throughout the value chain working to facilitate payments to producers for environmental benefits, particularly mitigating the negative impacts of climate change. C-AGG creates incentives and value for the agricultural sector to reduce greenhouse gas emissions and deliver ecosystem services at scale.

C-AGG understands that in order for farmers to receive value for ecosystem services, whether payment for practices undertaken or for the environmental results achieved, certain criteria must be established in order to protect the credibility of the program that facilitates such compensation. This is especially true if we hope to establish vibrant markets in which farmers can maximize value secured for certified, fungible environmental credits. C-AGG has identified guiding principles that all involved parties, including producers, must seek in order to institute durable, credible, and fair methods of compensating farmers for environmental services. Several of the principles are of particular interest to producers:

  • Science-based. Any programs or policies that encourage transfer of payments to farmers for environmental services must be based on the best available science. This will ensure the best environmental results.
  • Quantifiable, verifiable and results-based. The environmental benefits should be certified and counted to maintain credibility. This also properly incentivizes the use of the most beneficial practices and efforts, which is essential to encourage rapid on-farm deployment of climate-smart and environmentally beneficial endeavors. Any program must also recognize and address leakages wherever possible, or the environmental benefits that justify such programs could be undermined.
  • Innovation. The severe threat climate change levels on the food system demands creative thinking. Farmers and other food system stakeholders should be encouraged to innovative, and early actors should be recognized and rewarded.
  • Additionality. Payments cannot be awarded for activities that are already happening. This would weaken the motivation to make beneficial changes and take new action, and it would provide no real or new value to buyers.
  • Permanence. Programs and policies should offer value for efforts that hold and store carbon out of the atmosphere for lengths of time that make a difference in a changing climate. Permanence in biological systems is perhaps a misnomer; but knowing the storage time of carbon in beneficial reservoirs, such as in soils, is important. Permanence in biological systems is perhaps a misnomer; but knowing and increasing the storage time of carbon in beneficial reservoirs, such as in soils, is important.
  • Co-benefits. Many climate-smart actions have social and environmental co-benefits for which producers should also be rewarded.
  • Stakeholder engagement. Program managers need to operate in a transparent, accountable process with robust input from stakeholders in order to make these programs effective.

It’s important for producers to understand these concepts and appreciate their importance. Any viable program that compensates producers for environmental services should incorporate these principles. The more forcefully and clearly any proposed program demonstrates these values, the more likely it will be successfully implemented. Farmers interested in receiving payments for environmental services should advocate for programs that encompass these guidelines.

Would you be interested in providing environmental services on your farm if you could receive just compensation? Why or why not? Please share your thoughts in the comments below.

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