Pilot explores carbon markets - Minnesota Board of Water and ...

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Pilot explores carbon markets - Minnesota Board of Water and ...
2021 August Snapshots

Pilot explores carbon markets
                                                                                                               Ben Mergen milks
                                                                                                               50 Holsteins, raises
                                                                                                               a small herd of beef
                                                                                                               cattle and grows
                                                                                                               mostly corn, soybeans
                                                                                                               and alfalfa on his
                                                                                                               farm near Albany in
                                                                                                               Stearns County. He’s
                                                                                                               worked with Stearns
                                                                                                               County SWCD staff
                                                                                                               on a pilot project
                                                                                                               designed to quantify
                                                                                                               environmental benefits
                                                                                                               of implementing soil
                                                                                                               health practices.
                                                                                                               A three-year NRCS
                                                                                                               agreement helps to
                                                                                                               subsidize the pilot
                                                                                                               project’s enrollment
                                                                                                               costs.
                                                                                                               Photo Credits:
                                                                                                               Ann Wessel, BWSR

                        Farmers who implement soil health practices could tap an emerging revenue
                        stream, earning credits for improvements that benefit water quality and
                        sequester carbon. The Sauk River watershed is one of a dozen U.S. pilot sites.
                        ALBANY — Stearns County farmer Ben          private partnership of the ag supply
Natural Resources       Mergen was among the first to sign          and value chain, is seeking buyers as it
Conservation            up for a pilot project that will quantify   prepares for a 2022 launch. ESMC and
Service website:                                                    The Nature Conservancy developed
www.nrcs.usda.gov
                        environmental benefits of the cover
                        crops he’s implementing on his dairy        the pilot to help farmers earn
USDA is an equal        and beef operation.                         additional revenue for practices that
opportunity provider,                                               improve soil health, sequester carbon
employer and lender.    Verifying the carbon sequestration and      and reduce pollutant-carrying field
                        water-quality improvements that result      runoff. The pilot will fine-tune testing
                        from soil health practices will position    protocols used to verify credits.
                        Mergen — and others within the Sauk
                        River watershed, one of about a dozen       “Along with nitrogen-scavenging
                        pilot sites across the U.S. — to sell       and nutrient-scavenging, keeping
                        credits on a national market.               something living in the soil and
                                                                    erosion control, it’s just another
                        The nonprofit Ecosystem Services            aspect of cover crops that maybe will
                        Marketplace Consortium, a public-           bring a profit,” Mergen said as he and

                                                      www.bwsr.state.mn.us                                                          1
Pilot explores carbon markets - Minnesota Board of Water and ...
Ben Mergen and his daughter Ella checked a 13-acre soybean field on June 29 in Stearns County's Farming Township. Mergen planted the beans
directly into a living cover crop. Working with Stearns County SWCD staff and NRCS assistance, this year Mergen is trying cover crops on 90 acres. He’s
also among the first within the Sauk River watershed signed on to an NRCS-supported pilot project that could lead to another revenue source for the
farm: carbon credits.

                                       “
daughter Ella checked a                       If there’s a way to cut back on your                                  “I think it’s another avenue
soybean field.                                                                                                      to reach farmers looking to
                                              labor and your time ... and still be                                  improve their resources. It’s
Mergen moved back to the              profitable, maybe if you do have to take a yield                              also another opportunity to
farm 10 years ago from                                                                                              leverage additional financial
Indiana, where he’d been              hit, between the fuel savings and the cost of
                                                                                                                    resources for our farmers as

                                                                                                       ”
working for Gavilon Grain.            having the machinery, that should pan out. If                                 they implement additional
At the time, his father,              you get a payment on top of it from the                                       conservation practices,”
Roger, was ready to cut                                                                                             Fuchs said.
                                      ESMC, that only helps.
back. He still helps with                                                                                           The 50-acre enrollment on
fieldwork and twice-daily              — Ben Mergen, Stearns County farmer
                                                                                                                    Mergen’s farm is also part
chores. But Mergen — a                                                                                              of All Acres for Our Water,
fifth-generation farmer —             share programs,” said                  how that all will work.”               which centers on the Backes
lives on the home place               Leif Fixen, agriculture                                                       Lake subwatershed.
with his wife, Alicia — a             strategy manager for TNC               The pilot aims to enroll
full-time dental hygienist in         in Minnesota, North Dakota             50,000 acres within the                “What we’re trying to do
Melrose — and their three             and South Dakota.                      Sauk River watershed, which            is clean up the water —
daughters.                                                                   drains to the Mississippi              either stop erosion of soil or
                                      The ESMC tool can be used              River. The watershed was               runoff of nutrients. That’s
The Mergens milk 50                   for third-party valuation of           chosen partly because                  where all of this will tie in
Holsteins and raise a beef            carbon reduction or water-             the Stearns County Soil &              so that we can cut down
herd of 25 cow-calf pairs.            quality improvement within             Water Conservation District            on the nitrates, whether
They raise about 500 acres            a company’s supply chain.              (SWCD) already was working             it’s in groundwater or
of corn, soybeans, alfalfa            Or it can generate tradeable           with producers on All Acres            whether it’s getting into a
and the occasional spring             credits that can be sold to a          for Our Water. Another                 stream and heading down
wheat crop.                           company.                               pilot designed to spur                 to the Mississippi and
With dairy, beef, corn and                                                   conservation practices, All            out to the Gulf,” Mergen
                                      “The farmer will be able to            Acres for Our Water involves
soybeans, it’s exactly the                                                                                          said of the programs. “As
                                      market each of those credits           TNC and the Minnesota
sort of farm the pilot project                                                                                      far as benefits, besides
                                      independently,” Fixen said.            Land Trust.
is seeking.                           “Once the marketplace is                                                      what’s on the farm and
                                      launched, you’ll be able               By early summer,                       in our pocketbook, it’ll be
Funding from the USDA’s                                                                                             the environment with the
Natural Resources                     to sell your carbon credit,            Stearns County SWCD
                                      you’ll be able to sell a               Administrator Dennis                   cleaner water, and then the
Conservation Service (NRCS),                                                                                        carbon capture has to do
The Nature Conservancy and            water-quality credit — and             Fuchs said enrollment
                                      potentially even inside of             totaled about 500 acres.               with climate change.”
the Minnesota Department
of Agriculture cover costs            that water-quality credit              SWCD staff members                     Mergen first tried cover
associated with the three-            you’ll be able to sell your            contact landowners, offer              crops five years ago with
year signup period, which             nitrogen credit, you’ll be             technical assistance and               a 40-acre signup through
ends in 2022.                         able to sell your phosphorus           help producers apply for               NRCS’ Conservation
                                      credit and you’ll be able to           reimbursements. SWCD                   Stewardship Program.
“Right now, the big benefit           sell your total suspended              staff also helped with soil
is you get to the front               solids credit. A lot of that is        sampling, which will be                “You kind of got paid to try
of the line for the cost-             a little less known right now,         repeated in five years.                it, so there wasn’t a whole
                                                             www.bwsr.state.mn.us                                                                     2
Pilot explores carbon markets - Minnesota Board of Water and ...
“
lot of risk involved, which is
a nice way to start any kind      ESMC Pilot Project Details
of project you don’t know
a whole lot about,” Mergen        ENROLLMENT: Minnesota is one of about a dozen                     Environmental
said.                             states where the pilot project is underway. A handful
                                  of other enrollments from watersheds in southwestern              markets offer a
This season, his cover crop       Minnesota was based on landowner interest.                        voluntary way
enrollments total 90 acres.
The programs in which he’s        PILOT FUNDING: In Minnesota, funds from the USDA’s                of achieving our
involved will generate about      Natural Resources Conservation Service, the state                 desired air and
                                  Department of Agriculture’s Minnesota Agricultural
$11,000 in assistance.
                                  Water Quality Certification Program and The Nature                water outcomes
He tried something new            Conservancy leverage partners’ cost-share and                     at potentially the
on the 13-acre bean field:        technical assistance. The three-year NRCS agreement
                                  helps to subsidize enrollment costs.
                                                                                                    lowest cost to
planting green. This spring

                                                                                                                       ”
he seeded soybeans into a                                                                           society.
                                  PROJECT PARTNERS: In Minnesota, they include
living cover crop. Mergen
                                  the Stearns County SWCD, AgCentric, Centra Sota
said the method required
                                  Cooperative, the Environmental Initiative, Field to
closely watching the rye,
                                  Market, the Headwaters Agriculture Sustainability                — Leif Fixen, agriculture
which tends to take off           Partnership, Houston Engineering, Land O’Lakes’
in the spring, but a well-                                                                         strategy manager for
                                  Truterra, MBOLD, Midwest Dairy, the Minnesota Milk
timed chemical application        Producers Association, Syngenta and the University of
                                                                                                   TNC in Minnesota, North
successfully killed the           Minnesota Forever Green Initiative.                              Dakota and South Dakota
cover crop. The beans,
planted at the same time as       POTENTIAL BUYERS: Buyers could include retailers
conventionally tilled fields,     seeking to claim a zero-carbon net impact, or
were thriving in late June.       municipalities that find it more affordable to
                                  improve water quality via upstream credits vs. a new
“I’m hoping to get at least       wastewater treatment plant.
half my ground covered in
cover crops, if not three-
quarters,” Mergen said of        bought a strip-till machine.   the microorganisms alive,”
                                                                Mergen said.                       The Minnesota Board of
his long-term goal.              “I’m trying to be more                                            Water and Soil Resources
His best advice to those         profitable with less work.     “I’m hoping to do some             is among the ESMC pilot
considering soil health          So cutting back on some        custom work, maybe see             project supporters. BWSR’s
practices: “Start small. Don’t   of the fieldwork — that’s      if some other people want          mission is to improve
do more than you think you       where I picked up that         to try the strip-till,” he said.
                                                                                                   and protect Minnesota’s
can handle in spring or fall.”   strip-till machine. I’m        “No-tilling soybeans looks
                                 hoping to get away from full   like it’s working pretty well      water and soil resources
This year, Mergen further        tillage and leave as much      so far. We’ll see what the         by working in partnership
committed to soil health         cover on as I can and keep     yield monitor says, but so         with local organizations and
practices when he became a       some growing roots in the      far it looks like a pretty nice    private landowners. www.
cover crop seed dealer and       ground. I think that keeps     stand.”                            bwsr.state.mn.us

                                                   www.bwsr.state.mn.us                                                        3
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