Farm Food Facts

Carbon Sequestration with Ed Smith from Indigo

January 14, 2020 Episode 58
Farm Food Facts
Carbon Sequestration with Ed Smith from Indigo
Chapters
Farm Food Facts
Carbon Sequestration with Ed Smith from Indigo
Jan 14, 2020 Episode 58
USFRA

Today's Thought leader is Ed Smith, Vice President & Head of Indigo Carbon's carbon initiative which is focused on creating a thriving, voluntary market for carbon credits and other environmental service products.

Indigo's market aims to improve grower profitability by compensating them for sequestering large amounts of carbon in their soil, while simultaneously allowing consumers and businesses to offset their carbon footprint through the purchase of high quality, rigorously verified carbon credits. 

Show Notes Transcript

Today's Thought leader is Ed Smith, Vice President & Head of Indigo Carbon's carbon initiative which is focused on creating a thriving, voluntary market for carbon credits and other environmental service products.

Indigo's market aims to improve grower profitability by compensating them for sequestering large amounts of carbon in their soil, while simultaneously allowing consumers and businesses to offset their carbon footprint through the purchase of high quality, rigorously verified carbon credits. 

Speaker 1:
0:01
Farm food facts where every farmer, every acre and every voice matter. Welcome to farm food facts for January 15th, 2020 I'm your host Phil Lempert. Remember to watch the new short film from USF. RA 30 harps to see just how farmers provide a source of healthy food while addressing environmental concern for current and future generations. Go to U S farmers and ranchers. Dot org to view this impactful and heartfelt film. 2020 should prove to be a year where the relevance of sustainability and the environment coalesce with social and economic issues and will drive financial performance. It's all about doing good and making money at the same time. The facts are there to support the efforts. Nielsen reported in 2018 did. 73% of consumers said they would definitely change their consumption habits to reduce their environmental impact and over a third would pay higher than average prices for products that are made with sustainable materials.
Speaker 1:
1:06
Unilever who has 26 sustainable living brands reports that those products are growing 50% faster than its other brands on the job. Companies that have sustainable cultures enjoy a 50% higher morale and 16% higher productivity. Well, there's a little doubt that from the farm to the consumer being and marketing, your commitment to sustainable efforts pays off in both building a relationship with customers and profits. Today, our thought leader is it Smith, it is the vice president and head of Indigo carbon. He leads Indego's initiative, which is focused on creating a thriving voluntary market for carbon credits and other environmental service products. Indigo's market aims to improve grower profitability by compensating them for sequestering large amounts of carbon in their soil, while simultaneously allowing consumers and businesses to offset their own carbon footprint through the purchase of high quality rigorously verified carbon credits. It says that the transformational change requires more than just commitment.
Speaker 1:
2:16
We have to align incentives across the entire system. Doing that will require engagement from players within and outside of agriculture. This includes act, tech companies, input providers, nonprofits, government agencies, consumer packaged goods, companies, retailers, and each of us as consumers. Ed, welcome to farm food facts. Glad to be here. Thank you for having me. So at, let's talk about chain. You say it's about more than just commitment. I would agree. We actually have to get people across the entire supply chain to do something. Take me through that. What needs to happen? Sure. So I'll start on either of the ends in terms of on the consumer, the demand
Speaker 2:
3:00
side, companies and individuals need to be willing to think about their food differently and be willing to pay for more than just a commodity product. Can't just be commodity wheat. There's a lot of other things that go into the creation of wheat and corn and soy and a lot of the other ag products that we rely on and so we need to be willing to pay for differentiated deep monetized agricultural products.
Speaker 1:
3:24
But let me, let me challenge you on that. I agree. From a farmer standpoint, from a food industry standpoint, we constantly hear that people need to pay more. On the other hand, we hear that there's a great amount of the population that can't afford food today, yet alone paying more. So how do we balance that? Yeah, well
Speaker 2:
3:45
if I trace it through to the other side, then that creates a, an incentive for growers to farm differently through regenerative practices. With regenerative practices, there's no drop off in the amount of food produced. And by the way, once you switch to regenerative, you don't have to sell your products, your weeds, let's just say your bushels of wheat add in premium. You can decouple and sell the carbon credits differently from the wheat. And so a, a CPG company could be buying the wheat at traditional commodity prices and then say a large tech company in Silicon Valley could be buying the carbon credits associated with that. And then you would have an economic incentive for growers to farm differently to the carbon credits and we'd still produce the same low commodity price. And then for some CPG companies, you may sell the wheat or the corn or the soy coupled with the environmental benefits, in which case you would have more expensive food products. But it doesn't have to be that way. And that's one of the reasons that we think this carbon market is such a, a helpful and interesting way to go about this. You can pair those or decouple them. And by those I mean the actual food or crop with the environmental benefits and by decoupling it, you still end up with low prices for consumers.
Speaker 1:
4:59
So it sounds like it's a very complicated process to, to make all this happen from farmers to the consumers. How can we explain this in a way that everybody feels comfortable with? It empowers them to do it and to your point, makes it happen.
Speaker 2:
5:19
Let's wait to describe this would be farmers are now farming two different things. They're farming their cash crop. Yeah. Let's say it's wheat and they're also farming carbon and they can sell those together and they can sell them separately. So it's actually not that complicated. They just have diversified the products that are on their farm.
Speaker 1:
5:37
So what's your reaction from farmers when you talk to them about this or the looking at this as being something that really not only makes the money but saves the farm for future generations? Or are they just putting up their hand and saying way too complicated for us?
Speaker 2:
5:54
No, we're seeing significant, significant interests and so had over 14 million acres come to law website, sign in and say, Hey, here's my information. I'd like to sign up for it and to go carbon. That's sort of a staggering number. Absolutely. It's much more than we expected in our first 12 months, let alone our first six months. And so what we're seeing is exactly as you suggested that growers are interested in a new revenue stream. They're interested in diversifying revenue streams on their farm, and this is basically compensating growers for improving their soil health, which every, every farmer we talk to nose at it in a deep and intimate way, how healthy their soil is. And so being compensated for that, there's something that are extremely interested in not just the new revenue stream, but they know what that means for the quality of their farm. And as you said, the longevity and health of the farm for future generations.
Speaker 1:
6:46
There's no question with all the farmers that we speak with, the health of their soil is, you know, number one or at least number two in their, in their mind and in their heart and in their soul. So how big can this gas, what are the next steps for it and how do we make this kind of process pervasive throughout all of farming. So we number one, make farmers added revenue. Number two, we keep the soil as healthy as possible. And number three, we have a great boot supply that's affordable for America.
Speaker 2:
7:20
Well, we think you can be very big. We think that this can touch basically every agricultural acre, whether it's ranch land or crop land in the world in order to, in order to get there, we start with the growers that we have. No, I'm going to show them a good experience. We help the converge of regenerative practices and we help them make this new revenue stream a reality and then we think it scales from there by building the technology that lets us reach more and more acres at a low and compelling costs for growers.
Speaker 1:
7:52
What are the type of regenerative practices that you're working with farmers on? Yeah,
Speaker 2:
7:58
we think about a few. The first is no or limited tillage, which you know, so I would have called it plowing before I started working at Indigo. Basically stop disturbing the soil, which it's great. Weed control doesn't just kill weeds, kills a lot of the good stuff in the soil as well. So there's tillage, there is cash crop diversity. A lot of growers today are rotating their crops, but it's actually the triple rotation more than just the double rotation receive significant benefit and not as many growers are triple rotating their crops. The third is cover crops, keep living roots in the ground, bare exposed soil is vulnerable soil. And so we want living roots in the ground a year round. And the fourth one is minimizing your synthetic inputs, herbicides, pesticides, fungicides and fertilizer. But as your soil health rebounds, we see that you can cut down on those currently and the last one, the fifth one is livestock integration. Those cattle are Romy bio-reactors can help process either cover props or residue after after harvest. That just helped with that carbon right back in the soil and then we're contemplating other ones. We're talking to more and more growers. We're realizing that's the tip of the iceberg. The growers are talking to us about composting and a few other different practices that we know that this is going to be a learning journey in this expand.
Speaker 1:
9:17
So ed, what does a farmer have to do to take us through the step by steps for a farmer to be part of this program?
Speaker 2:
9:24
Sure. The farmer should come to our website and if they go to the Tara John or Indigo carbon aspect of our website, they can enter their information. We'll give them a call, they'll talk to one of our account representatives, they'll sign up. We will then ask them to help share a bunch of data with us like where are their fields and where their previous practices, because that's how you quantify the carbon. We are likely to send one of our team members out to the fields to actually take a soil sample that'll happen on about half of our farms. The grower will change their practices. Of course, bill adopt at least one of the regenerative practices that I mentioned before. We'll continue to gather data ongoing so they were able to compare to the baseline and then we will run it through our system to estimate the tons of carbon either sequestered or evaded and compensate growers accordingly and that's sort of what the first year looks like and you basically then repeat that for each subsequent season. The grower can stay with us as long as they want and as they increase their carbon over that baseline level, they'll continue to be compensated annually. As long as you're sharing information with us and data on what's going on and we're able to take soil samples, they can keep earning revenue from Indigo carbon.
Speaker 1:
10:38
What if you get through this process and I'm sure that this has happened and love to have your insight on it. You go to a farm or you look at it, do you say, here's how much money you're going to make, here's the changes that you've got to make. And the farmer, maybe a 65 70 year old farmer just says, you know, I really, I'm hesitant. I really don't want to make these kinds of changes at this stage in my farm and in my life. What do you say to that farmer?
Speaker 2:
11:07
Oh, I remember, of course supportive of farmers in whatever decision they want to make. We don't want to be, you don't want to be pushy, but we think this is good for the [inaudible], the farm.
Speaker 3:
11:16
It's good for the farmer, it's good for everyone who consumes what the farmer is producing and it's good for the planet. And so we think there's a lot of reasons to do it and because it's hard to adopt these practices, it's hard to change. We want to help through that. And so it would basically offer our help for figuring out which practices are the right ones to adopt for that particular grower. And we're happy to walk them through the economics of what this means for them so that it reduces the risk cause that's farmers have had a rough last few years, whether it's weather or modesty due to some of the tariffs that are happening. And so we think this could be massively helpful and impactful and we'd love to make it as easy as possible for them. So when we talk about data collection, probably something that every consumer, every farmer is worried about is what happens to the data.
Speaker 3:
12:11
So what are you doing with it? You're collecting it. Are you selling it or using it for any other purpose? It's a great question. And a trust with our growers is what our business is based on. And so we don't want to do anything that makes them nervous at all. So unequivocally our growers own their own data. We will use it internally to calculate the amount of carbon credits. We're also never going to sell their data to anyone else. That will absolutely not happen. We would like to advance the field of soil science though and we're going to have a lot of information and that's a critical component of what we're trying to do and so we may aggregate and anonymize so it's never attributable and work with some scientific partners in order to publish some papers on what we're learning from social science because we think this can benefit growers in the U S who aren't just in our our Indigo carbon program and frankly globally.
Speaker 3:
13:05
But again, that would always be aggregated, anonymized growers would never have to worry about anything there and just be for the purposes of publishing some scientific papers. Well, ed for, for you and the company, thanks so much for all you're doing for the farming community. Appreciate it and thank you for joining us today on farm food facts. My pleasure was happy to be here for more information on all things, food and agriculture, and to listen to our archives. Please visit food dialogues.com under the programs and media tab and visit us on Facebook at U S farmers and ranchers, or on Twitter at us FRA
Speaker 4:
13:47
[inaudible].
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