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How do farmers earn thousands of dollars from carbon credits?

Farmers have always made their cash from crops; now they can also cash in from farming carbon. Carbon farmers create an additional income stream by selling carbon credits while also producing products that grow in carbon-rich soil. 

How do farmers earn thousands of dollars from carbon credits?

“Carbon farming” or “regenerative agriculture” removes carbon from the environment and stores it under the soil. It describes a variety of methods farmers can use to capture and store the carbon emissions they produce from their farming activities in the soil or in vegetation through photosynthesis, rather than releasing it into the atmosphere. Through this form of carbon offsetting, farmers can create a net loss of carbon from the atmosphere, making their activities net zero. 

Scientific studies estimate that agricultural soils could sequester over a billion additional tons of carbon yearly. Soil carbon sequestration is a process in which CO2 is removed from the atmosphere and stored as soil organic matter This is a mixture of carbon compounds such as animal and plant tissue, microbes, bacteria and carbon from soil minerals. Both the soil and the plants benefit from this. Carbon-rich soil promotes plant growth which in turn increases the growth of produce.

What is carbon farming?

Farmers unlocking the value of their land can now cash in carbon projects. The carbon stored in the trees, reforestation of formerly cleared agricultural land with long-term environmental plantings has the potential to generate carbon credits. In agriculture, farmers can generate carbon credits by:

  • Rotating livestock rotation: when cattle are alternated in different paddocks, each paddock has the opportunity to recover between pasturing periods.
  • Organic mulch: By adding mulch to the soil, such as wood chips or straw, the soil's moisture content increases and microorganisms interact with the organic matter to create healthier, more fertile soil.
  • Agroforestry: Including trees in farming operations has the positive effect of storing carbon emissions from farming and offer a variety of above- and below-ground advantages.
  • Cover crops: Clover and vetch can be planted alongside cash crops during the growing season to make up for carbon lost during harvest, or they can be utilized to keep the soil covered and carbon-rich throughout the winter.
  • Reduced tilling: Tilling releases carbon back into the atmosphere as it combines soil with air. Additionally, tilling disrupts the soil's structure, decreasing its fertility. Techniques for regenerative tillage aid in maintaining the soil's quality and carbon retention.

Carbon farming requires fewer resources and generates savings for farmers. It doesn’t just save farmers money - it can make money too. Farmers can generate new revenue streams at the same time as they make the journey towards sustainability. The additional income of selling carbon credits also produces products that grow in carbon-rich soil. Conventional agriculture includes monoculture cropping, tilling, chemical pesticides, and more. These can have significant negative sides on the soil. Farmers can use cover crops and minimize tillage. Carbon farming has additional benefits for the ecosystem

  • Decreased recharge in at-risk locations where rising water tables are a concern
  • Reduced water and wind erosion
  • Less chemical spray drift 
  • Increased biodiversity benefits due to habitat creation
  • Possibility of using native species to revegetate marginal or unproductive lands.

One carbon credit corresponds to one metric ton of carbon dioxide. The voluntary carbon market enables private investors, governments, non-governmental organizations, and businesses to voluntarily purchase carbon offsets to offset their emissions. Companies that are unable to reduce their emissions can purchase carbon offsets from verified suppliers to offset their emissions. In 2022, The World Bank reported global carbon pricing revenue in 2021 increased by almost 60 percent from 2020 levels, to around $84 billion.

Carbon farming projects

How do farmers earn thousands of dollars from carbon credits?

Not all carbon programs are a good match for farmers. Finding the right carbon program provider is a critical decision to determine success or failure. The right voluntary carbon credit program will create incentives for farmers to implement practices that at the same time will bring economic gain and ecological benefit. This can be successfully achieved with the right tools, expertise, and guidance. As carbon farming applies scientific principles to agriculture, data-driven assessments and implementation will yield verifiable results. 

If the biological work is done, then it is very likely for the soil carbon to be at a higher range than before the research and work. DGB Group´s Data Analysis shows that these biological activities improve root systems and make plants grow faster.

A combination of measurements will then determine the most effective and efficient carbon farming agronomic practices appropriate for the specific farm. Progress metrics are established individually as well to track progress and measure improvement.

Data will provide the input analyzed by the carbon program provider or independent verification body. Pricing calculations include the amount of total carbon removal or reduction generated by the farm. The exact amount a farmer will receive from carbon farming will depend on the land nature and data. This is why a high-tech approach to nature restoration, which can harness the latest smart technologies, can best secure the best outcomes for the farmer. After carbon credits are issued, they are ready to be  traded in a carbon market where buyers actively look for high-impact projects to complete their own emission reduction goals. 

DGB Group is currently developing five projects (Cameroon, Kenya and Uganda) which expect to originate 16,900,000+ tonnes of CO2 credits during their lifetime.

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