Carbon credit markets are showing potential as a possible revenue stream for farmers, thanks to carbon sequestration practices they can implement on their operations. Ag Secretary Tom Vilsack recently came out in favor of the USDA operating as a potential “carbon bank” for American producers that want to participate in carbon markets. Robert Bonnie, President Biden’s nominee for USDA Undersecretary for Food Production and Conservation, said some questions need to be answered before the agency gets to that point.
“Is there a role for USDA to help finance and to partner with the private sector? Not to structure things in a way that competes with the private sector, but to think about structuring things in a way that provides more stability, as well as the importance of getting the resources to the producer.”
Carbon credit markets, Bonnie noted, have been around for a long time. He said the challenge is making it financially worth it for producers to take the time and effort to implement sequestration practices that will cost money upfront.
“What we’re trying to do here is how do we incentivize reducing greenhouse gases through carbon sequestration or reducing emissions themselves, and so there’s an interest in being more performance-oriented. And so, thinking about some flexible tools of how USDA can do that. Are there some more flexible tools you can think about?”
There are challenges for farmers who want to take part in the current carbon market program. Bonnie said USDA will likely need to partner with private-sector organizations to help producers overcome those challenges.
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