With agricultural related GHG emissions accounting for about quarter of global emissions, conversations around the role of farming in carbon and emissions management are intensifying. This includes the capacity of soil to sequester carbon by growers transitioning to farming practices such as no-till and cover cropping. Governments are starting to incentivize such transitions, and numerous food and crop input producer pilot programs to track on-farm sustainability practices have emerged. In this podcast, Joel Jackson, Chemicals and Fertilizer Analyst at BMO Capital Markets, discusses the key findings from his recent research report, which concludes that while many hope no-till farming and cover cropping could prove a benefit to growers to monetize sustainability practices and lower emissions, they may prove to be a burden unless government and food industry incentives materially increase and broaden. Even with government incentives and promises of CPG industry incentives, BMO estimates a 5- to 10- year payback for a farmer transitioning to no-till and cover cropping. Upfront equipment switching costs are sizable, there are yield penalties in initial years, and material annual cover crop seed costs. Plus, future outcomes are blurry - carbon monitoring is imprecise, carbon sequestration seems lower than projected and variable year to year, there’s carbon re-emissions potential from natural occurrences or if practices are abandoned, carbon marketplaces are immature, and government policies are unclear.

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