The Challenge

Climate policy will impose burdens on farmers through higher energy costs and possible regulations. Current policy initiatives aimed at helping farmers propose “carbon farming” payments for climate smart practices, which will only compensate farmers for a portion of the energy cost increase, leaving them with an economic loss from climate policy in the near term.

For example, a $42/ton carbon fee will cost potato growers around $75/acre in extra energy-based input costs, while carbon farming payments are likely to be approximately $25/acre (based on common carbon farming options like cover crops), leaving potato farmers a cost burden of approximately $50/acre. (RIPE commissioned a third-party economic analysis of carbon fee by commodity that is available to partners.)

The Solution

Rather than accept a concession of carbon payments, RIPE is advancing a bipartisan climate policy framework to secure a profit opportunity for farmers. RIPE projects that farmers 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 carbon revenue to compensate farmers for the combined values they are delivering to greenhouse gas, water quality, water conservation, soil health, biodiversity and air quality – the combined value is called “stacked ecosystem services.” Voluntary practices that sequester greenhouse gases – such as cover crops and precision nutrient management – are also delivering tremendous value and farmers would be compensated. 

Furthermore, RIPE proposes that farmers be fairly compensated for the climate adaptation expenses they will face due to lower yields and the cost to update farming practices to address greater flooding, droughts and pests. RIPE proposes compensating farmers for these losses and helping them invest in the solutions.

The RIPE Roadmap includes a menu of options for policy design.  Input from stakeholders and advisors will shape the final policy proposal.  The end-goals of the RIPE Roadmap are to: 

  • Deliver a reliable revenue stream to farmers with a climate adaptation payment. Farmers are already confronting unpredictable livelihood impacted by low commodity prices, weather-induced losses, trade conflicts and increasing regulation.  
  • Deliver a profitable revenue stream for voluntary practices that compensates the full cost of a carbon fee and the stewardship practice, and includes a profit margin. With RIPE, the “cost-share” principle of current conservation programs is replaced with a “profit opportunity” approach.  
  • Provide farmer-driven common sense climate policy without intrusive data collection. Farmers choose if and when to adopt stewardship practices that make sense for their fields. Farmers will not be required to use sensors or share data with the government, because the policy is not a trading program. The impacts will be scientifically evaluated at the program level, not the farm level.  
  • Never penalize early actors. If your farm is already delivering stewardship value to society, you should be compensated for it. RIPE proposes building on the success of current USDA EQIP and CSP models – including by compensating for existing conservation threshold (e.g. if your farm currently uses water conservation irrigation systems you would be paid for that). Payments for additional activity would be provided as well (e.g. if you add cover crops you would be paid for the full value they deliver to soil, air and biodiversity).
  • Close the rural digital divide. RIPE proposes a portion of the climate revenue be spent to fully fund closing the rural digital divide to help farmers adopt sustainable agriculture practices and help rural Americans access modern communication technology. 
  • Transform regulations into a profit opportunity. Farmers increasingly confront regulatory requirements and threats to adopt water quality, water quantity and climate practices without being compensated. RIPE proposes paying farmers for voluntary adoption of the same practices that they otherwise would be mandated to implement.