Markets & Finance Turn to Farm Data

Marketing contracts that offer premiums in exchange for field activity data are becoming increasingly common in grain.

Commodity agriculture continues to shift away from carbon pricing, towards more detailed disclosure of actual field-level activities. Smart climate financiers understand that CO2-e (carbon dioxide-equivalency) scores don’t capture actual, accurate emissions from products like fertilizer and pesticides, and avoid skewed claims that weigh and average them.

The voluntary carbon markets (VCM) have forever gotten a tough rap for enabling corporate greenwashing, and their inability to deliver impact for pre-sold credits. As society’s focus has broadened to span biodiversity, water quality, nutrient cycling and food nutrition in agriculture, relatively linear carbon-crediting has been in decline.

According to today’s issue of Marginal Carbon, “Market actors and others have been calling on the Science-based target initiative SBTi to incentivize the use of carbon credits, allowing them in target fulfilment. Hope was raised with the SBTi board putting out a statement in April in this direction. A scandal ensued, the CEO of the SBTi resigned, and now they published two reports on Scope 3 target setting, and the use of carbon credits. The reports essentially reaffirm the previous position that credits won't be allowed to be used to meet targets (CDR to neutralize the last 10% is still allowed).” 

The end of the VCM

The Data That Matters

Consider once again emissions across the value chain within supply sheds for grain-based ingredients. Shipping distances matter to calculations behind retail claims, but transportation is not even close to the biggest contributor to a food brand’s final score.

Because of their reliance on fossil fuels in manufacturing, and tendency to escape from the field and pollute surrounding environments, agrochemicals are most often the biggest contributor to a food brand’s total supply chain greenhouse gas (GHG) emissions. Fertilizer tends to show up as the most impactful area for reductions, once the potency of nitrous oxide is factored into carbon dioxide equivalency units.

To this end, governments are paying for better management and putting new taxes on emissions, while food brands seek to source low-emissions grain ingredients to demonstrate progress towards corporate goals. Connecting the dots back through industrial handling systems is a major challenge.

Enter: Real Farmers

Farmers are like snowflakes - all can be seen as beautiful in their own way, with each being completely unique. Some are contributing significant positive externalities to society by working with nature to grow food with superior nutrition through proper nutrient and water cycling in farmland - which is oddly ignored in efforts to model all farms after large-scale grain producers.