Cargill is taking advantage of its position in the supply chain between farmers and consumer food companies to invest in advancing the emerging carbon marketplace associated with regenerative agriculture.
Its new program, RegenConnect, builds on Cargill’s plan to advance regenerative agriculture practices on 10 million acres in North America by 2030.
In 2020, the company managed a pilot program running on nearly 10,000 acres across 15 soybean farms in Iowa that paid farmers between $30 and $45 per acre to adopt regenerative agriculture practices. Cargill also bought the carbon offsets on an annual basis.
Building on that model, Cargill said RegenConnect will connect farmers to consumer packaged goods (CPG) companies hoping to buy offsets for their net-zero commitments, starting in 2022. Ben Fargher, vice president of sustainability in Cargill's North American agriculture supply chain, said the company is in talks with a few brands but is not at liberty to say who.
According to Cargill, this new revenue stream will help more farmers make the transition to regenerative agriculture practices such as planting cover crops and embracing no-tillage. The offsets will be paid per metric ton of carbon sequestered. Cargill’s plan is to act as a facilitator between its farmers and the consumer packaged goods (CPG) industry.
"Our CPG customers have commitments, and quite frankly, expectations around environmental sustainability emissions," Fargher said. "Farmers are doing good work, and these carbon markets are developing. We are able to add value and create a bridge to tangibly make a difference. We want to connect the two."
Cargill also plans to use this program to meet its own sustainability goals, which include reducing greenhouse gas emissions by 10 percent by 2025 in its operations and 30 percent in its supply chain.
We are able to add value and create a bridge to tangibly make a difference. We want to connect the two.
"We're looking at working within the supply chain to reduce emissions and make that contribution within that insetting or supply chain focus," Fargher said. Insetting, the opposite of offsetting, are actions that directly reduce emissions inside the company's own supply chain.
Cargill does not have a publicly stated net-zero goal at the moment but it still has a commitment to draw down emissions. This program is part of the holistic strategy.
Cargill is working with the carbon accounting firm Regrow to collect, measure, report and verify the carbon data on farms. According to Cargill, ReGrow’s platform uses remote sensing and modeling for measurement purposes.
Fargher emphasized the need for robust verification, measurement, reporting and protocols. But soil carbon sequestration modeling is still in the early phases, so more on the ground measurement might be needed. Fargher mentioned RegenConnect plans to collect data from the farms directly. The ability to prove additionality — essentially verifying that the carbon sequestered due to an offset is new and not something that would have happened without the offset payment — is always especially important when it comes to soil offsetting, and Cargill is aware of the challenges around that particular metric.
"Around additionality, this program is for regenerative ag practices, like tillage arrangements or cover crops, that are for new or expanded acres, not for existing practices," he said.
Carbon marketplaces for agriculture soil sequestrations have started popping up over the past few years. Companies including Indigo, Nori and CIBO are developing models that propose to offer farmers a more streamlined way to connect with potential offset buyers. With RegenConnect, Cargill has effectively decided to create its own branded marketplace instead of partnering with an outside firm. It remains to be seen whether other large food companies active on sustainability, such as Danone and General Mills, will follow Cargill’s lead and create their own marketplaces.