The Challenge
Farmers and ranchers, as stewards of our nation’s land, can deliver tremendous value to improve the climate, water, air, and soil resources on which we depend. Climate change is imposing costs on producers, including increased floods, droughts, and pests. Yet traditional climate policy designs would impose burdens on growers through higher costs on inputs and possible regulations. RIPE proposes investing in farmers and ranchers to help them adapt and contribute through voluntary stewardship practices while increasing yields to feed a growing global population.
Most climate policy initiatives aimed at helping agricultural producers propose “carbon farming” payments for climate smart practices, but those will only compensate growers for a portion of the input cost increase from the policy overall, leaving farmers and ranchers with an economic loss from climate policy in the near term.
For example, a $42/ton carbon fee on the energy sectors will cost a potato grower around $75/acre in extra energy-based input costs such as fertilizer and fuel. A carbon farming stewardship practice like cover crops costs around $38/acre to implement. The carbon farming payment would be around $25/acre based on the cover crop’s carbon sequestration contributions. This leaves the potato farmer at a net loss of $88/acre. **RIPE commissioned a third-party economic analysis of carbon fee impact by commodity and region that is available to partners. To learn more, please contact us.
This is why most ag trade groups have reasonably opposed most climate policies.
We can design a better policy that helps the environment and helps growers’ bottom line too.
The Solution
RIPE aims to fairly compensate farmers and ranchers for the protection they provide to our air, water, and soil through their voluntary stewardship activities.
Current proposals put forth a concession in which growers are remunerated for their carbon farming practices, but at a rate that doesn’t effectively cover their outlay. In contrast, RIPE’s bipartisan climate policy framework would both cover the costs of investing in these beneficial production practices and also offer an additional stewardship incentive. RIPE projects that the U.S. agricultural community could secure in the range of $20 billion to $40 billion annually from a climate policy that reflects the RIPE Roadmap.
The RIPE Roadmap proposes to allocate a portion of climate policy funding – which could come from energy sector pollution fees, green bonds, tax incentives, or other sources such as an economic stimulus program – to incentivize producers’ investment in practices that safeguard our shared natural resources. When farmers and ranchers invest in voluntary stewardship practices such as cover crops, rotational grazing, or manure management – they are delivering value to our nation’s shared natural resources including preserving water quality, water conservation, soil health, biodiversity, and air quality while lowering greenhouse gas emissions. Together, these benefits offer a “stacked ecosystem services value.”* RIPE’s analysis indicates that the public value derived from these ecosystem services is high enough to warrant compensating growers for their stewardship practices while also allowing for a “Stewardship Incentive” that nets a financial profit for agricultural producers and an environmental and public health benefit for the public.
*Ecosystem services are defined as the benefits people obtain from ecosystems. These include provisioning services such as food and water; regulating services such as flood and disease control; and supporting services such as nutrient cycling that maintain the conditions for life on Earth. Please contact RIPE to learn more about the methodology we use to quantify ecosystem services.
Our Goals & Principles
The RIPE Roadmap includes a menu of options for policy design, which are informed by the following principles.
- Transform growers’ regulatory risk into a profit opportunity. Farmers and ranchers increasingly confront regulatory requirements and threats to adopt water quality, water quantity and climate practices without being compensated. RIPE proposes paying agricultural producers for voluntary adoption of stewardship practices at payment levels that reflect the public value of environmental stewardship practices.
- Offer a reliable and profitable revenue stream to farmers and ranchers. Growers are already confronting unpredictable livelihood impacted by low commodity prices, weather-induced losses, trade conflicts and increasing regulation. RIPE proposes a new USDA program that offers producers the opportunity to earn payments up front at levels that are guaranteed to be reliable and profitable each year.
- Align payment level to reflect public benefits from ecosystem services and private value farmers and ranchers need to be sustainable stewards.
- RIPE Payment Value to Society = Value of Carbon + Water Quality + Water Quantity + Soil Health + Air Benefits + Biodiversity + Other Ecosystem Services
- RIPE Payment Level to Farmer = Carbon Compensation + Practice Reimbursement + Stewardship Incentive
- Replace cost-share principle with stewardship incentive profit principle. Current conservation programs, which are authorized by the Farm Bill, operate under a cost-share principle that insists that farmers and ranchers cover part of the costs for stewardship practices. RIPE proposes full reimbursement of the practice costs. RIPE proposes payment levels that deliver a profitable stewardship incentive, netting the practice reimbursement and carbon compensation.
- Voluntary incentive-based and flexible program. RIPE offers a voluntary opportunity for producers to engage, and no regulations on farmers nor ranchers. Growers will decide if and how they want to participate in the program. They can select from a list of qualifying practices that are suitable to a variety of farmers and ranchers, from small specialty crop growers to large livestock producers. If the list of qualifying practices does not match a producer’s particular needs, they can be compensated for alternative practices that demonstrate equivalent environmental benefits.
- Innovation and increasing yields matter. Farmers and ranchers confront a profound task of feeding a growing population on fixed land and limited greenhouse gas resources. An innovation incentive will reward the private sector and growers for finding new ways of advancing sustainability without penalizing yields.
- Producer-driven, science-based, common sense climate policy without intrusive verification. The RIPE Roadmap is not an environmental trading program (such as water quality or carbon offsets), so the strict verification levels and grower liability of those programs is not warranted since they are not offsetting a regulated sectors’ liability. The impacts will be scientifically evaluated at the program level, not the operation level. Like existing USDA programs, farmers and ranchers will submit their self-verified documentation and the agency will evaluate the benefits using scientific studies and 1-5% audits.
- No penalty for early actors and no “additionality” liability. If your farm or ranch is already delivering stewardship value to society, you should be compensated for it, not penalized. RIPE proposes building on the success of current USDA conservation models – including by compensating for existing conservation threshold (e.g. if your operation currently uses water conservation irrigation systems you would be paid for that). Because this is not an environmental trading program, there is no need to demonstrate “additionality”, so RIPE avoids the costly technical challenges, producer liability, and scientific concerns that plague those types of policies.
- Close the rural digital divide. RIPE proposes using a portion of the climate revenue to fully fund closing the rural digital divide to help growers adopt sustainable agriculture practices, tap clean energy markets, and help rural Americans access modern communication technology.