Rewarding farmers for removing carbon from the atmosphere

On the occasion of the 2016 World Food Day, Ban Ki-moon, still in his role as General Secretary of the United Nations, highlighted the close link between climate change, sustainable agriculture and food security. “The climate is changing. Food and agriculture must, too,” he wrote, before urging that without concerted action, millions more people could fall into poverty and hunger, threatening to reverse hard-won gains and placing in jeopardy our ability to achieve the UN Sustainable Development Goals (SDGs).

The World Food Programme estimates 135 million people face crisis levels of hunger, and another 130 million are on the edge of starvation as a result of the coronavirus. By 2030, rice yields will have to rise by 30 percent—from the same area of arable land—to guarantee food security. By 2050, the demand for wheat will increase by approximately 60 percent. To reach the goal of SDG 2 (“Zero Hunger”) has just gotten much harder. However, the challenge becomes more complex when adding the following: Agriculture employs an estimated 2.5 billion people worldwide. It contributes about one-fourth of all greenhouse gas (GHG) emissions. Hence, the observance of multiple intertwining SDGs – on hunger, poverty, employment, biodiversity, and the tackling of climate change – is in jeopardy if we don’t fix the food system.

In agriculture, every investment in innovation needs to be an investment in sustainability.

Feeding of the increasing global population without starving the planet is one of the greatest innovation challenges of our time. At Bayer, we are guided by sustainable intensification, the aim to increase production on less land whilst respecting planetary boundaries. In agriculture, every investment in innovation needs to be an investment in sustainability. It’s about how to reverse the trend of increased land-use change, better protect biodiversity, being more intentional on giving smallholder farmers access to innovation and decarbonize agriculture. We can make a difference, because Bayer’s annual 2.5 Billion Euro investment in agricultural innovation is second only to the agricultural research budget of the Peoples Republic of China.

Decarbonization has three pillars for us:

• We need to reduce carbon emissions for example through disrupting the fertilizer industry by increasing plant’s capability to mineralize nitrogen, broader adoption of no-till farming, and introduction of rice varieties that emit less methane.
• We need to increase resilience against the changing climates, for example through accelerated integration of new seed varieties that are drought resident, innovation in crop protection or the broad adoption of short-corn varieties with better resistance against storms and other extreme weather events.
• We need to mobilize the soil’s capacity to remove carbon from the atmosphere and store it for prolonged times. For that, new business models that reward farmers especially for carbon removal will stimulate innovations like crop-rotation, seed section with higher carbon removal potential or adoption of digital farming.

It is our priority to develop climate-smart solutions and trigger farmers’ adoption by creating innovative business models that benefit farmers, tackle climate change, and drive towards a carbon-zero future for agriculture. To tackle such an ambitious goal, we’re focusing our efforts where we can make the biggest impact, working collaboratively with growers and partners across the value chain to reduce by 30% the GHG emissions of crops grown in the field while also achieving carbon neutrality in our own operations by 2030.

Our Bayer Carbon Initiative – accessing the carbon market 

Farmers can make a major contribution to reducing agricultural GHG emissions. Today, farmers are rewarded solely for their food, feed and fiber production. But there is an unaddressed opportunity for farmers to also be rewarded for their efforts to reduce GHG emissions and capture carbon in the soil. To put our sustainability commitments into practice, we were the first agricultural company to develop a transparent, science-based and collaborative approach to a carbon trading platform to help farmers adopt climate-smart practices by setting up carbon initiatives.

Establishing a carbon market in agriculture is feasible if we help farmers build viable businesses around using their land and production to sequester carbon in the soil and reduce carbon emissions on their farms. Models for reduction measurement based on scientific data and agreed upon standards are necessary to achieve this. Farmers need the right tools to enable them to reduce and sequester carbon and methods for verifying reductions. Digital monitoring will be crucial to keep the costs of verification down and the income for farmers high.

We have been collaborating and working for several years on developing carbon scheme to help farmers participate in the fight against climate change. Whether it is practicing no-till, planting cover crops, the use of precision-application technologies or enhanced water efficiency, farmers have a vested interest in being part of the solution to climate change – their livelihoods depend upon it. By helping quantify GHG emissions reductions, we are also helping to get farmers incentivized for their practices. Moreover, by connecting farmers to the thousands of companies that committed to reducing their carbon emissions, we can create a market for carbon reductions that creates new income streams and complements government-funded rewards for environmental services. While we are providing the incentives to get the market jumpstarted, the beauty lies in the fact that once a market is established, the market price will drive the economic benefit organically.

Access an increasing carbon market, while preserving biodiversity

These new income sources for farmers are allowing them to increase productivity and access an increasing carbon market, while preserving biodiversity. At the same time Bayer will generate growth by providing climate-smart products and digital solutions, we are creating a market pull which will ultimately benefit customers, consumers, and the planet.

We know this is not a one-size-fits-all model, therefore we are building tailored approaches with local farmers where they can make their best choices in the practices to implement and be rewarded for. In July 2020, we started to financially compensate the farmers for their adoption of climate-smart practices in Brazil and the United States. We are also engaging with partners to create a viable carbon market for farmers. The start is promising: In the 2020/2021 season more than 1,200 farmers in Brazil and the US (around 450,000 acres) will be participating in pilot projects. As a next step, other regions in Asia and Europe will be integrated into this initiative.

Accountability through measurement of our progress

We are working with leading experts to develop robust indicators and targets that build upon internationally recognized standards and methodologies. Specific to GHG emissions, we are going to measure the impact and adoption rate of our solutions by tracking them against the current 5-year average of market practices for the main crops in Bayer’s key regions. In addition, all data is being reviewed and verified by an independent third party. As we move forward, we will transparently track all of our progress in our sustainability hub.

As a further demonstration of how important this is to us, the third-party certification body SustainCERT recently announced that the Bayer/Soil Health Partnership Conservation Innovation program, initiated by Bayer, the National Corn Growers Association (NCGA) and other partners to reduce value chain or “Scope 3” GHG emissions has achieved design certification as part of the Value Change Program pilot phase. This recognition is a critical step to validate our science-based and transparent efforts towards a carbon-zero future for agriculture.

A Plea for a collaborative commitment

In June, UNEP described agriculture as “both one of the central causes of, and answers to the climate crisis.” A carbon-zero future for agriculture is possible but it requires a transformational change. We are excited about working with growers to make it happen and very optimistic about a new way of partnering with farmers and high value organizations to continue shaping the future of agriculture. Cooperation in combatting climate change is key – farmers worldwide are in the center of this, and Bayer is committed to partnering with them and address challenges to advance a carbon-zero future for agriculture.