On thin margins, cutting carbon is how farms protect themselves

As COP31 opens on food and agriculture, Laith Amin, VP Growth & Strategic Development, EcoEngineers, an LRQA company, argues that the practices that lower emissions are the same ones that protect farm income. Many farms run on margins of just a few percent, and in a tough year, none at all. At that level, a spike in diesel or fertilizer prices can wipe out the year’s profit. Diesel and fertilizer are both made from fossil fuels, carry a heavy carbon footprint and are priced by global energy markets that no farmer controls. Farms will always need some of each, but every liter or ton they no longer buy cuts emissions and leaves less of the budget exposed to the next price shock. That is where lowering carbon and protecting the farm line up. The practices that make this possible are already proven. No-till farming, a technique for growing crops without disturbing the soil, means fewer passes across the field, which saves diesel. Biochar and cover crops build healthier soil that can need less synthetic fertilizer. Low-carbon fertilizer made with decarbonized hydrogen cuts both emissions and reliance on imported chemicals. And automation, accelerated by labor shortages, makes farms more efficient while cutting emissions. One project EcoEngineers supported illustrates how this works. On an oat production project, leftover biomass that would likely have released methane was converted into biochar and returned to the soil, improving nutrient availability and sequestering carbon. Voluntary carbon market revenue made the project viable at the start. Once embedded, the practice strengthened the farm’s economics and helped cushion it against fertilizer price shocks. The value needs to reach the farm Decarbonization only builds resilience if farmers share in what it creates. In the US, Section 45Z of the Inflation Reduction Act gives fuel producers a tax credit when their feedstock is grown with practices that reduce carbon. Those producers need farms to keep supplying low-carbon crops, and we are already seeing the value flow back in practice. Farmers are already organizing, verifying their data and negotiating for their share. That changes what a farm sells. A bushel of corn or soybeans is normally a commodity priced against a commodity reference grade. Grown with climate-smart practices and backed by verified data, it becomes a differentiated product that can earn a premium. This trend away from standardization and towards adding differentiated attributes is a reversal of a trend that has been happening to farm production consistently for over 100 years. That premium depends on proof. Low-carbon crops lose their unique value the moment they are blended with everything else at the grain elevator or similar storage. Chain of custody and independent verification keep the attribute attached to the crop, and the reward attached to the farmer. Finance is the other hurdle. Capital-intensive upgrades are much harder to fund when borrowing costs 7 to 10%, compared with 3 to 5% a few years ago. Governments and other underwriters can help by offering lower-cost capital, especially in emerging markets. What we’ll be watching at COP31 We’ll be looking for policies that hold steady long enough for farmers to invest and for commitments that help value reach the farm gate. On margins this thin, resilience and decarbonization must be the same investment. Tomorrow, I’m participating in Newsweek’s Feeding the Future event at COP31 and will share more updates.