Opinion: Cracking the accounting jigsaw of on-farm conservation to grow the profitability of healthy soils

February 19, 2021

Opinion: Cracking the accounting jigsaw of on-farm conservation to grow the profitability of healthy soils

Feb 19, 2021

Key Issues:Sustainability

This opinion piece originally ran in AgriPulse

 

While American farmers are trying to navigate the COVID-19 pandemic and tough economic conditions, they are also being asked to improve soil health and water quality.

 

Policy and business leaders across the country are setting ambitious targets to reduce greenhouse gas emissions and other environmental impacts from food production. But farmers can’t be expected to adopt practices like conservation tillage, cover crops and efficient nutrient management without these practices paying off on their balance sheets.

 

Fortunately, there is growing evidence from farmers who have been able to make sustainable improvements while maintaining or even improving their profitability. Still, agricultural soils are complex, and different conservation practices have different costs, benefits and timelines to return on investment, especially when compared across crop types and geographies.

 

Simply put, a cover crop that worked for a farmer in Iowa may not work for a farmer in Illinois.

 

As interest and investments in agricultural soils grow, it is essential that we have the accounting tools to measure and understand the financial impacts that conservation practices have on the farm bottom line.

 

The uncertainty and complexity surrounding financial decisions about conservation practices should not be underestimated as a barrier to entry. Farmers and their business partners, from lenders to supply chain companies, like to have clear expectations of the costs and benefits that practices like conservation tillage, cover crops and efficient nutrient management will have on farm revenue, operating costs and long-term profitability.

 

But that’s true for all agricultural practices, which are implemented differently for different crops and regions of the country. The only difference is that each state and even subregions of each state have detailed information about conventional practices, their costs and their timing. We don’t have that information everywhere for cover crops, conservation tillage and other in-field conservation practices.

 

Furthermore, some conservation practices have to be measured differently than other annual practices like tillage in terms of their financials. Unlike many practices that have annual costs associated directly with benefits in that year, some conservation practices like cover crops have upfront costs associated with delayed benefits, similar to applying lime.

 

To simplify this accounting jigsaw, Environmental Defense Fund and Soil Health Partnership, an initiative of the National Corn Growers Association, collaborated with researchers to publish a practitioner’s guide for conducting budget analyses for conservation agriculture. Our goal is to help measure and grow the profitability of healthy soils by making robust accounting of conservation practices the norm, not the outlier.

 

Good accounting of agricultural conservation practices isn’t a nice-have, it’s a must-have, especially as Biden’s USDA sets sights on market mechanisms for boosting farmer adoption of practices that reduce greenhouse gas emissions and improve water quality.

Stakeholders across the value chain that want to see sustainable practices implemented at scale across U.S. agriculture — including USDA, state agencies, food and grain companies, and conservation organizations — need to participate in gathering and sharing information about the financial attributes of these practices, and develop solutions that effectively help farmers adopt these practices profitably.

 

It’s time we make accounting of conservation agriculture commonplace across the U.S. agricultural sector. Our farmers’ futures may very well depend on it.

 

Co-authored by National Corn Growers Association CEO Jon Doggett and Environmental Defense Fund VP of Ecosystems Britt Groosman.

 

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