HAMILTON, Ohio – The Inflation Reduction Act has about $396 billion in the budget for climate action. A lot of that is going into farm programs that look at sequestration and best management practices, said Mike Estadt, agriculture and natural resources extension educator in Pickaway County. But the devil is in the details.

Estadt was preparing to speak at the Cover Crop Field Day hosted by the Ohio No-Till Council and the Butler County Soil and Water Conservation District (SWCD). The event was at the Butler County SWCD Agriculture Conservation Education Demonstration site. Brady Smith, Butler County SWCD rural specialist, said he wanted to encourage farmers to try new things.

“I am always trying to push people to think outside the box and do different practices that are not considered normal or mainstream while also helping their profitability and also being more mindful of the environment,” he said.

That went right along with Estadt’s comments on carbon markets. There has been a lot of money put forth by the government toward the farmers adopting some of these, what they consider climate-smart practices, Estadt said.

“There are different types of programs,” he said. “There are programs based on practices and programs based on output. The difference is the amount of money you’re going to get paid. Some pay a set fee per acre for no-till, maybe $3 to $9, for crops. There is no verification of the actual amount of carbon that is sequestered in the soil. A lot of those are one-year programs.”

With programs based on outcomes, there will be a measurement, monitoring and verification of the amount of carbon put into the soil. Those programs will probably run for a minimum of five to 25 years. So, the companies that invest in these programs are looking for high-quality carbon sequestration.

The carbon markets are going to change and evolve, Estadt said. This is all new and so far, there has not been a lot of uptake across the farm belt. There is confusion on just what monitoring and verification mean. Farmers are reluctant to share data, and the payment was not worth the effort. The Inflation Reduction Act may change that.

Farmers who have been using no-till for a long time might not be too happy, Estadt said. The companies that need to buy the credits want to buy new carbon. They’re not interested in something sequestered in the soil for the last 10 to 25 years. Instead, they want to work with farmers who have been using tillage but want to switch to no-till.

“The carrot I throw out there, and again this is all new programs, there will be opportunities for some of these long-term no-tillers to capture what is called a carbon insert. These will be like the Cargills, and the ADMs, the people that buy their commodities and either pass them into the food chain, ethanol or the livestock industry. A lot of large, multi-national food companies will be looking for what they call low-carbon corn.”

If farmers can adopt practices related to lessening the amount of nitrogen fertilizer that they use, if a livestock producer can demonstrate reduction or capture of methane in their farming operation, that is going to add value to the commodity that they sell to those industries, Estadt explained.

It is complicated and messy, he said. However, some programs will allow the farmers to put in just a few acres. Farmers can “get their feet wet” and get used to the program.

“My advice right now is to make sure before you sign anything to have an attorney look at it,” he said. “You’re making a long-term commitment to some of these programs. Some are 25 to 50 years. If it fits your farm plan, these programs will evolve into some beneficial financial programs.”