Frequently Asked Questions

RIPE is proposing that ag producers earn in the range of $100-$300 per acre or animal unit for voluntary stewardship practices such as cover crops, manure separation, or managed grazing.

The level of available funding that could be available to farmers and ranchers through a climate policy depends on several factors. RIPE analyzed multiple scenarios and believes that with growers’ advocacy, it is feasible to secure an annual fund for sustainable agriculture in the range of $38 billion a year. This would allow a medium-sized producer who chooses to participate in the program and invest in stewardship practices to earn in the range of $38,000 a year. Each participating grower will be ensured a payment level that includes three parts: Carbon Compensation, Stewardship Reimbursement, and Stewardship Incentive.

As an example, let us assume a carbon price of $50 per ton. Participating corn growers would receive three payments. First, there is a Carbon Compensation of $34 per acre, equal to the increased cost of inputs such as fertilizer and fuel. Second, a producer who is implementing cover crops would receive a Practice Reimbursement of $38 per acre, or the full average cost of the practice. Third, there is a Stewardship Incentive based on ecosystem service values totaling $108 per acre. A corn farmer with 450 acres would therefore receive a total annual payment between $32,400 and $48,600.

We look forward to sharing more about our calculations with interested stakeholders.

RIPE does not take a position on the revenue source at this time, allowing stakeholders the flexibility they need for a complex initiative, while RIPE focuses on the policy design and coalition building related to farmers’ potential role in climate policy. Presidential candidate Biden and Democrats in Congress are proposing the following sources of revenue for climate policy:

• General revenue/green bonds/bonds  – The federal government may generate bonds to finance a climate policy package. This appears to be the dominant source of funding planned by Democrats;
• Tax incentives – Farmers and ranchers could be allowed to earn tax credits, like the earned income tax credit or 45Q credit, based on the value of the stacked ecosystem services they’re delivering to the public;
• Other revenue sources identified but not prioritized in the Democratic climate plans are:  corporate tax rate increase, carbon tax, non-compliance fees for regulated companies.  Since these potential sources are not prioritized in the Democratic climate plans, we do not expect them to be a significant source of revenue.

RIPE offers a flexible roadmap that has a Policy Menu of Options.

The cost of a climate policy on agricultural inputs plus the cost of stewardship practice adoption will total around $67/acre for many producers. Carbon farming payments will only deliver around $17/acre to growers (at a carbon price of $50/ton), leaving producers with a net loss. However, farmers and ranchers who adopt stewardship practices are delivering public benefits around $100-$300/acre when stacking the ecosystem services such as soil health, climate, water quality, biodiversity, and more.

RIPE advocates for allowing producers to earn the stacked ecosystem service value of their voluntary practices, delivering value to the public and the grower.

Across the biggest commodities in the U.S. agricultural economy, the average cost of a climate policy would be $52 per acre. When looking across the spectrum of carbon farming practices, the average value is around $48 per acre, leaving most growers with a net loss. But that includes practices that most producers would likely not implement, such as biochar. If we only include practices that are popular with producers, then the average per-acre payment drops to $12. For most farmers and ranchers, the math of carbon farming payments alone simply doesn’t work.

Energy companies will have additional costs from a climate policy and will likely pass along some share of those costs to consumers and farmers.  RIPE supports protecting households with a sliding scale of support that fully protects low-income and middle-income households.  That would allow nearly all rural residents to be fully protected from energy price increases.   Farmers will confront around $30/acre in extra input costs (based on RIPE commissioned economic analysis, which includes commodity-specific and regional details), and those costs will be explicitly compensated for in the RIPE Roadmap payments for voluntary stewardship practices, along with a profitable stewardship incentive.

If the program funding comes from energy companies’ paying a pollution fee/permit/credit and those emissions decline over time, would the revenue available for farmers decline?  The price of those permits will rise over time, which will keep the revenue stable from 2020-2050, according to Resources for the Future E3 Model.  However, if the policy is designed as an energy performance standard with a credit, there is uncertainty about the revenue stream.  To address this challenge, RIPE’s legislative principles include that farmers will be fully compensated for the policy costs, giving farmers assurance that they will be protected in the face of the long-term uncertainties of a complex climate policy.

Yes! Farmers need high-speed internet access to adopt many stewardship practices, adapt to climate change and access clean energy market opportunities. Rural citizens and rural policymakers across America are eager to access modern information technology and need a revenue source. The funding gap to close the rural digital divide is $20 billion, according to the Federal Communications Commission. In the scheme of a comprehensive climate policy, this is a small price tag that can be fully covered in less than three years.  RIPE supports fully funding this with a portion of the climate policy revenue, to deliver tangible benefits to rural America from a comprehensive climate policy.

RIPE is supportive of the great contributions provided by IndigoAG, Ecosystem Services Marketplace Consortium (ESMC), and other private market organizers for environmental markets.  RIPE builds on that work and differs in the following ways:

1. Guaranteed & Larger Scale.  It is widely agreed upon that the private market demand for environmental services such as carbon sequestration or water quality is significantly lower than the supply that farmers would like to deliver, if fairly compensated. RIPE proposes a USDA program that guarantees payment for all participating farmers at a much larger scale. Since the public benefits from significant environmental benefits of sustainable agriculture, it warrants internalizing these values in the market system that farmers can benefit from. The scale of funding available for farmers from a national climate bill designed with RIPE Roadmap principles is in the range of $38 billion/year.
2. Guaranteed Price. Private markets fluctuate payment terms based on buyers’ interests, while RIPE’s proposed USDA program would ensure payment levels upfront.
3.  No Expensive or Intrusive Farm-Level Monitoring.  Scientific evidence of impact will be evaluated at the program level, not the farm level.  Since RIPE is not proposing an environmental trading program, there is no need to demonstrate the level of farm-specific impacts that have required costly and invasive monitoring.
4. Near-term Opportunities using Existing Protocols.  ESMC is developing sophisticated science that will be tremendously helpful to the wider field, and it will take many years to refine.  RIPE proposes payments be made immediately based on the known program-wide impacts.  As more research is made available through ESMC and others, that can inform payment level adjustments.
5. Larger Payments.  IndigoAg and other carbon farming actors are paying farmers for the greenhouse gas value alone, while RIPE proposes that payments include the values from greenhouse gas and water quality, biodiversity, soil health, and other ecosystem services.
6. No Penalty for Early Actors.  Markets that trade environmental services must be sensitive to the need to prove “additionality”, i.e. additional environmental benefits secured due to the payment.  RIPE’s program is not an environmental trading system, and can pay farmers for the outcomes they are delivering.  No penalty for early actors who are already investing in environmental benefits.

For more information about how RIPE compares to other organizations, please visit the Resource Page/Organizational Landscape.

Several major agricultural trade groups have recently launched coalitions that are dedicated to evaluating various climate policy proposals and advancing a climate policy that is in the best interest of agriculture. The main differences between RIPE and most of those groups are that RIPE:

• Has a specific policy design outline (i.e. pay for stacked ecosystem services at a level that aligns with the farmers’ carbon compensation, practice reimbursement, and stewardship incentive).
• Is dedicated to the farmer profitability principle (i.e. farmers must earn a profitable stewardship incentive from a climate policy in contrast to the cost-share model of carbon farming or conservation payments)
  

We believe most other ag-climate groups will be interested in adopting this type of approach, and we invite collaboration.  RIPE looks forward to engaging coalition members and other interested stakeholders with detailed briefings of the Roadmap for their consideration. If your trade group is part of a coalition and would like a briefing to learn more, please contact us.

For more information about how RIPE compares to other organizations and policies relating to ag and climate, please visit our Resource Page for Organizational and Policy Landscape.

Both Democrats and Republicans value the opportunity this policy framework offers by helping reduce the causes of climate change and benefiting agriculture and rural America. RIPE staff interviewed policymakers across the political spectrum about what they need to advance a bipartisan climate policy, and a resounding theme emerged that a climate policy that has the backing of environmental groups and agricultural producer groups will give them the winning coalition they need to secure a bipartisan victory.

Furthermore, political science and evidence from 100+ climate bills demonstrate that when public interest climate policies simultaneously create an industry opportunity, those policies secure bipartisan support.   Aligning public benefits with private interests is the key to delivering public benefits to all citizens.

U.S. farmers will be significantly affected by climate change’s rising temperatures, floods, droughts, and pests – and may lose up to $5 billion annually. For example, beef cattle farmers are projected to lose $44 million annually due to increased temperatures, while rice farmers may lose up to 20% of their annual yield by 2050. The RIPE Roadmap payments can help farmers afford to invest in the adaptation changes they need, such as –  cover cropping, which help manage fluctuations in water supplies; and improved air conditioning systems for livestock operations.

The key distinction is that carbon farming and offset proposals pay farmers ONLY for the greenhouse gas value of their practices, which is typically in the $12-23/acre for most climate-smart practices, at a $50/ton of carbon price. Yet the cost of a climate policy on farmers averages roughly $50/acre from higher energy and fertilizer costs, at that carbon price. Carbon farming payments are better than nothing, but since most farmers are still left at a net economic loss, we prefer a better deal that recognizes the tremendous value farmers and ranchers can contribute to our environmental benefits when considering the climate, water, soil, and other ecosystem services.  Another difference with carbon farming payments is that RIPE’s proposed payments avoid “additionality” requirements – such as strict and costly verification demands, and penalizing early actors – because it is not an environmental quality market mechanism but rather an independent USDA program based on program-wide values.

The main benefits provided by sustainable agriculture, which RIPE proposes to enable farmers to earn a payment on, are listed below.  This data is provided by a meta-study of ecosystem service studies relating to soil health stewardship.

Health Benefits – avoided premature deaths from air pollution and avoided pesticide exposure, for a societal benefit averaging $144/acre.

Clean Water from Nutrient Savings – estimated at an average of $112/acre.

Climate Stabilization from avoided GHG – estimated at $23/acre based on a wide selection of crop stewardship practices, typically referenced for GHG reduction opportunity – such as cover crops, precision nutrient management, organic, etc. – and valued at $42/ton of GHG avoided. One example of the low value of GHG comes from a study by USDA that found carbon sequestration value of EQIP practices was around $0.42/acre. If farmers only get paid for their GHG value, they will be hurt economically by a climate policy, but if farmers are also paid for the water and other benefits, it can transform into an economic opportunity.

We welcome your involvement!

To learn more, and explore possibilities to serve as an advisory committee member or ad-hoc advisor to RIPE, please visit our get involved overview page to see the many opportunities we have for you to participate in and support RIPE.

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Yes. RIPE’s proposal helps with flooding by investing in farm practices that mitigate flooding and by compensating farmers fairly for those efforts. Farmers would be compensated for the value of their flood mitigation efforts when they adapt stewardship practices.

Flooding annually costs the United States $8 billion, according to the National Weather Service.  Severe flooding events inundate agricultural fields, prevent and reduce crop plantings by millions of acres, and erode valuable topsoil from fields. RIPE supports compensating stewardship practices that help reduce these flood risks.

Practices likely to be compensated by RIPE’s proposal include cover crops, reduced tillage, rotational grazing, and silvopasture. All of these practices hold soil in place during flooding events, in turn preventing sedimentation in waterways and overland flow. Stewardship practices lessen the effects of flooding and reduces the amount of standing water on fields and pastures. 

In addition, flooding pollutes waterways. Pesticides and fertilizers, carried as runoff, damage fishing and recreation, as well as aquatic and terrestrial biodiversity. RIPE supports nutrient management, which lowers the nitrogen and phosphorus applications to soil, to protect the health of neighboring waterways.

Furthermore, RIPE’s proposed federal fund could support riparian buffers, particularly wooded buffers, which may be the most effective agricultural tool for flood mitigation. Buffer plants stabilize streambanks, slow sediment-laden runoff, and absorb the pollutants attached. In fact, riparian buffers along the Missouri River were estimated to reduce damage by almost half during a large flood in 1993. Buffers absorb rainwater and restore groundwater levels, while slowing runoff release, thereby reducing the intensity and frequency of flooding events.