The Bottom Line: Are incentives enough to offset the costs of “carbon-smart” farming practices?

Guest Post by Lisa Eash, Ph.D. Candidate in the Department of Soil and Crop Sciences and Trainee in the CSU InTERFEWS Program

What if agriculture – a sector responsible for more than a fifth of total greenhouse gas (GHG) emissions1 – was actually capable of storing more CO2 than it emits? Studies show it may be possible through the adoption of improved farming practices which take carbon dioxide out of the atmosphere and store it in the soil.2 In the soil, carbon is a natural fertilizer, supporting our food system by increasing water and nutrient availability for crops3, while in the atmosphere, rising CO2 levels threaten the future of our planet. But the lofty goal of achieving net-zero agricultural GHG emissions necessitates a massive shift away from conventional practices and toward “carbon-smart” farming- trading bare fields for cover crops, monoculture for more diverse cropping systems, and plowing for no-till.5 Changing the way we farm has promise for our fight against climate change, but what does this mean for our nation’s farmers?

Near the border between Colorado and Utah, Steve Barry has dedicated his farming career to experimenting with improved management practices. Barry comes from an original homesteading family and considers farming a “culture, not just an occupation”. He can remember breaking ground as a child with his dad, 15 acres at a time, to transform the land from pinyon-juniper woodlands into golden fields of wheat. He also remembers how his dad farmed; intensive plowing was a common occurrence, and every straw of wheat residue was stripped from the field, bailed, and fed to cattle. These practices are all too common, especially for Barry’s father’s generation, and have ultimately resulted in severe soil degradation and erosion worldwide.

By the time Barry took over the farm in 2004, soils were dusty and depleted. Soil tests indicated that carbon levels were a low 0.4%. “It was basically just sand,” he recounts. Aware of the risks of severe wind storms and productivity losses that result from poor soils, Barry worried about what his soil test might imply for the future of his farm. He became one of the first of his neighbors to experiment with no-till and, in 2014, was instrumental in starting a collaboration with Colorado State University (CSU) to research cover crops­—crops grown solely for the benefit of the soil—on his field and on a nearby CSU research farm. He was committed to identifying practices that might reverse erosion, restore soil health, and provide his kids with the opportunity to inherit the culture of farming.

After several cover crop cycles and nearly two decades of conservation tillage, Barry is reaping the soil health benefits. Confirmed on CSU’s nearby research farm, cover crops and no-till improve soil structure, which has important implications for the potential to accrue soil carbon and protect against erosion.6,7 Pore space in the soil has also increased, which means when monsoonal rains do arrive, more of it can infiltrate into the soil and support his wheat crop rather than running off into the nearby canyon. Slowly but surely, cover crops and no-till are helping to restore Barry’s soils and support production for future generations.

However, the soil health rewards that Barry has gained unfortunately do not translate into increased profits. Many benefits of carbon-smart practices are long-term and/or flow to society rather than the producer.8 Their implementation can also come at a cost, particularly in the short-term. Cover crops, for example, require water to grow— a resource which is extremely limited in dryland systems like Barry’s.9 As a result, research on Barry’s field shows that wheat grown following a cover crop yields on average 25% less than if the land is left bare to accumulate moisture.10 This loss in revenue, combined with seed and additional labor costs, translates to as much as $60 per acre per year to implement cover crops.7

For nearly two decades, the cost of improved management practices has not deterred Barry. He mentions an important detail, “I’ve tried other avenues of farming— no-till and cover crops—because I love to farm, and also because I have another job. The farming didn’t have to give me an income. It gave me the opportunity to show other people in the area what farming can be.” Barry’s commitment to farming pushed him to work overtime at his second job in Blanding, UT to purchase his own tractors and implements early in his career. His job still supplements repairs and maintenance for that machinery. For him, the value of farming is intrinsic, “Seeing the progress I’ve made with this ground is the achievement. I go down there on the weekends to see the seeds emerge into a carpet of green. How do you even put it into words? It’s pure satisfaction.”

After a career dedicated to improving soils and exploring cover crops and no-till, Barry’s priorities are, by necessity, becoming more conventional. “As I look into retirement years, I need the farm to pay me something back. I need to add fertilizer, and whether I do that through chemicals or through cover crops is a financial decision. I need to sit down and run those numbers.”

With a newfound hype around the use of soil to thwart climate change, opportunities which coax farmers into implementing carbon-smart practices are abundant and have the potential to offset the cost of adopting new practices. Public and private efforts alike have funded initiatives to increase their adoption; President Biden called on farmers to lead our nation and the world in combating climate change and wants to divert $30 billion to conservation incentives.11 One investment company, IndigoAg, aims to sequester 1 trillion tons of carbon in the soil through agricultural lands—restoring atmospheric carbon levels to amounts we haven’t seen since before the industrial revolution.12

The dollar values of carbon incentives are as diverse as the agencies that offer them. The Environmental Quality Incentives Program (EQIP), a federal conservation program, pays farmers an average of $50 per acre to plant a cover crop, depending on state and crop type.13 Carbon markets, on the other hand, offer a somewhat risky investment opportunity. Farmers are paid variable payments based on the current price of carbon, a value which by some calculations might skyrocket to as much as $170 per ton within the next few years but currently hovers around only $5 per ton.14

Conservation incentives are not new to the farming community, nor is the plight of degraded soil. Federal conservation programs dating back to the Dust Bowl have aimed to entice farmers to adopt improved management practices, at times foregoing revenue for the benefit of the environment and society.8 Despite these efforts, national adoption rates of practices like no-till and cover cropping remain low, at 37% and 6%, respectively.15 Steve Barry may be able to explain why, “Right now the bottom line is money. (With retirement), I’ve started to go into a fixed budget. You can’t put money into something and not get something back.” His statement reinforces a widely accepted belief that farmers engage in practices that maximize short-term gains.16

Though Barry farms dryland crops in a region with limited rainfall—an admittedly challenging context for cover crop success9—his conditions are not unusual. Drylands cover over 43% of total global land area17, and if carbon sequestration proves financially unfeasible in these areas, the net-zero emissions goal might be a wild overshot. As we make grandiose claims about the amount of carbon that farmers will help us store in soils, we must consider whether incentives will be enough to offset the potential economic burden that carbon-smart practices may put on farmers. Barry puts it bluntly, “My decision to farm no-till or cover crop depends on economics. I need to make the financially smart decision”.


1IPCC. (2014). Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

2Batjes, N. H. (1996). Total carbon and nitrogen in the soils of the world. European journal of soil science47(2), 151-163.

3Rangelands NRM Western Australia (2016). The importance of Soil Organic Carbon.

4Abdalla, M., Osborne, B., Lanigan, G., Forristal, D., Williams, M., Smith, P., & Jones, M. B. (2013). Conservation tillage systems: a review of its consequences for greenhouse gas emissions. Soil Use and Management29(2), 199-209.

5Minasny, B., Malone, B. P., McBratney, A. B., Angers, D. A., Arrouays, D., Chambers, A., … & Winowiecki, L. (2017). Soil carbon 4 per mille. Geoderma292, 59-86.

6Barthes, B., & Roose, E. (2002). Aggregate stability as an indicator of soil susceptibility to runoff and erosion; validation at several levels. Catena47(2), 133-149.

7Eash, L., Berrada, A.F., Russel, K., & Fonte, S. J. Unpublished data

8Hoag, D. L. (2004). Economic incentives for soil conservation in the United States. Conservation Soil and Water for Society. Brisbane, 1-6.

9Unger, P. W., & Vigil, M. F. (1998). Cover crop effects on soil water relationships. Journal of soil and water conservation53(3), 200-207.

10Eash, L., Berrada, A. F., Russell, K., & Fonte, S. J. (2021). Cover Crop Impacts on Water Dynamics and Yields in Dryland Wheat Systems on the Colorado Plateau. Agronomy11(6), 1102.

11Newburger, E. (2021, Feb 12). Biden’s climate strategy looks to pay farmers to curb carbon footprint. CNBC.

12Evarts, A. (2019, June 12). Indigo Launches The Terraton InitiativeTM to Remove One Trillion Tons of Carbon Dioxide from the Atmosphere by Unlocking the Potential of Agricultural Soils to Sequester Carbon. Business Wire.

13Myers, R., Weber, A., & Tellatin, S. (2019). Cover Crop Economics: When Incentive Payments are Received for Cover Crop Use. SARE Outreach.

14Evans, R. (2021, June 29). Checklist available for ag producers, landowners considering carbon contracts. University of Nebraska – Lincoln.

15LaRose, J. & Myers, R. (2017). Progress Report: Adoption of Soil Health Systems Based on Data from the 2017 U.S. Census of Agriculture. Soil Health Institute.

16Napier, T. (1990) The Evolution of US Soil-Conservation policy: from voluntary adoption to coercion. In Soil Erosion on Agricultural Land. Edited by J. Boardman, I.D.L. Foster and J.A. Dearing. John Wiley & Sons, Ltd.

17Food and Agriculture Organization of the United Nations. (2020). Towards a Global Programme on Sustainable Dryland Agriculture in Collaboration with the Global Framework on Water Scarcity in Agriculture (WASAG) in a Changing Climate. Committee on Agriculture – 27th Session.

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