In just one week, farmers have pledged more than 700,000 acres to Indigo Ag’s new carbon sequestration initiative. The program, which launched on June 12, will pay farmers to use regenerative farming practices and remove carbon from the atmosphere.
“Over time with modern cultivation methods, we have really depleted the amount of carbon in the soil and released it back into the atmosphere,” says David Perry, CEO of Indigo, which provides seed treatments and electronically connects grain growers and buyers. “The average soil has about 3% to 7% carbon before cultivation; now it has about 1%.”
The Terraton Initiative, Perry told Chip Flory during a recent episode of AgriTalk, is Indigo’s global effort to capture 1 trillion tons of carbon dioxide from the atmosphere by using agricultural plants and then storing that carbon in the soil.
“If we took every cultivated acre on earth, which is about 3.5 billion acres, and got it back to 3%, that would take that 1 trillion tons of carbon dioxide out of the atmosphere and it hold it in the soil,” he says. “A trillion tons of carbon dioxide happens to be the increase that we've had in the atmosphere since the beginning of the Industrial Revolution.”
Through farming practices, such as cover crops, no-till, crop rotations and complimentary livestock enterprises, farmers can develop carbon-enriched soils, Perry says. More plants equal more photosynthesis, which captures more carbon—to put it simply.
Soils with higher carbon levels are healthier soils, Perry says, as they feature improved drought tolerance, require fewer inputs, showcase better water permeability and produce more nutritious crops with enhanced yields.
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“We really have the opportunity to take farming from today, where it is perceived to be part of the problem and make farming and farmers maybe the biggest part of the solution,” Perry says.
As part of the Terraton Initiative, Indigo created Indigo Carbon, which is the platform that will pay farmers for increasing the carbon content of their soil and reducing overall emissions.
“Society is already paying companies for taking carbon out of the atmosphere,” Perry says. “For example, oil companies get paid about $35 a ton of carbon dioxide that they capture and pump into the ground as part of enhanced oil recovery. So, there's the existing value for taking carbon dioxide out of the atmosphere. We're creating a market so that farmers have the incentive to do that.”
Farmers who join Indigo Carbon within the first 12 months are eligible to receive a minimum of $15 per metric ton of carbon dioxide sequestered. The market price will ultimately be set by supply and demand. Perry says most farmers can sequester 2 tons to 3 tons per acre per year, which would be an added revenue of $30 to $60 per acre.
“What the Terraton Initiative does is link farmers to an income stream,” says Ben Riensche, owner and manager of Blue Diamond Farm Company in Jesup, Iowa. “In a tough year like this, every possible avenue to drive more revenue to my farm is precious.”
Riensche, who has been working with the company for three years as a customer and a research partner, says farmers with prevent plant acres can use this as a way to experiment with new farming practices.
Farmers who sign up for the program can compete for additional monetary prizes. Indigo is launching the Carbon Cup, which is a national competition to recognize the farmers who sequester the most carbon in their soils.
Indigo recently earned the top spot on among 50 companies on CNBC’s disruptors list. The company was founded in 2014 in Boston, has raised $650 million and is valued at $3.5 billion, according to PitchBook. The company has 650 employees and seven global locations.
Learn more about Indigo’s Terraton Initiative.