Agricultural Carbon Credits- Listen to the Farmers


Agricultural Carbon Credits- Listen to the Farmers

Nature-based solutions are one of the most scalable opportunities to address climate change, but farmers have become increasingly skeptical about the benefits and costs associated with carbon markets and carbon capture farming. Many farmers are concerned about the risks and low returns that these methods may generate, and they have become mistrustful of the promises made by companies and organizations.

According to a recent survey of 50 farmers in the United States, conducted by a fifth-generation farmer and published by AGFunderNews, many farmers believe that carbon capture farming will not deliver the promised benefits. One of the farmers quoted in the survey states, “I think carbon markets are a smoke and mirrors scheme…and I don’t think they are worth the extra cost.” This skepticism about carbon markets is rooted in the belief that farmers will not see significant revenue or profits from these methods. In fact, the AgFunder survey finds that farmers are only seeing a 1% to 1.5% increase in revenue per acre from carbon programs.

Similarly, farmers are skeptical about carbon capture farming for a multitude of reasons including time, cost and the ambiguity around how programs work.. According to an article in the Wall Street Journal, farmers are concerned about the cost of implementing carbon capture technology and are uncertain about the potential Impact on their bottom lines. As reported in the Wall Street Journal, “Farmers are not convinced that carbon credits will be worth the extra costs associated with implementing carbon capture technology.”

To address these issues, PanXchange has a fully vertically integrated program that focuses on the farmer. We start with facilitating the pursuit of credits with an approach and methodology that is estimated at half the time and cost of entities such as Verra. Most importantly, we are the only entity that gives landowners 100% ownership of the credits earned on their land. From there, they have direct access to carbon credit buyers on our trading platform, eliminating the middleman. Most importantly, before a client goes under contract with PanXchange, we run a sensitivity analysis on their program that includes all costs, yield implications and projected revenue in the course of the five-year program. If the numbers don’t work, we explain why the program isn’t a good fit for them today. However, we are proud to report that even for a 2500 acre traditional grain farmer, we can illustrate a 15% increase in profit per acre.

Farmers play a crucial role in the global effort to combat climate change, and their support is essential. It is important for companies to address the concerns about how programs work, the risks, rewards and how to maximize revenue on carbon programs in order to gain support from farmers. At PanXchange, we believe that building a sustainable and effective solution in agriculture to address climate change starts with the farmer. Soil is now an asset class, and we have almost 900 million acres in the US alone with the potential to increase the amount of carbon sequestered.