By Alejandro Plastina and Wendiam Sawadgo
Emerging voluntary carbon markets are attracting lots of attention in US agriculture, to the extent that agriculture carbon credits are usually referred to as the new cash crop. In essence, large companies would purchase carbon credits from multiple sources, including agriculture, to achieve their net zero emission goals. Farmers and ranchers would implement conservation practices that sequester carbon or provide other environmental benefits in exchange for compensation in cash or carbon credits depending on the carbon program. However, not all conservation practices are able to generate carbon credits.
Two major requirements that conservation practices need to fulfill in order to generate credits are additionality and permanence. Additionality requires that practices be additional or different from the baseline, and requires judgement on whether the practice would have been implemented in the absence of the carbon program. Permanence refers to the length of time that a specific practice sequesters carbon from the atmosphere.
A key challenge that annual conservation practices, such as cover cropping and no-till, face is the permanence of the sequestered carbon in the soil. If a farm discontinues the use of cover crops, or vertical tillage is implemented on a farm after several years of no-till (e.g., to manage weed pressure or excess moisture in the soil) then sequestered carbon from previous vintages leaves the soil and returns to the atmosphere. Some carbon programs address the risk of “reversal” through a voluntary carbon reserve, which consists of carbon credits generated by agricultural practices that are kept outside the carbon market untraded for 10 years or more. In those cases, the amount of agricultural carbon credits available for sale is smaller than the total number of carbon credits generated by farmers.
When a practice is temporarily discontinued due to factors external to the farm (mostly due to weather), most carbon programs include penalties associated with skipping payments for the discontinued practices until reinstated and do not count incomplete practices towards carbon credit generation (Plastina and Wongpiyabovorn 2021).
In the present environment of burgeoning agriculture carbon programs, little attention has been paid to the potential effects of alternating adoption, opportunistic adoption, and partial adoption on total area under conservation practices (Pannel and Claasen 2020), let alone their limiting effects on the development of voluntary carbon markets.
Unfortunately, we are not aware of any farm-level longitudinal study on the drivers and associated probability of temporary or permanent disadoption of conservation practices. However, using county-level data from the 2012 and 2017 US Censuses of Agriculture, Sawadgo and Plastina (forthcoming) evaluate regional patterns of adoption and disadoption of conservation practices in the United States. They estimate that national disadoption rates in cover crops and no-till averaged 15.60% and 39.38%, respectively, between censuses. This article sheds light on the patterns of adoption and disadoption of cover crops and no-till in Illinois, Indiana, and Iowa, which jointly accounted for 17% of the value of crop production in the United States from 2016 to 2020 (USDA 2021).
Cover Crops in the I-States
In 2017, cover crops were planted in 2,617,335 acres in the I-States, equivalent to 4.12% of their total cropland area, with high variability in the intensity of adoption across counties, ranging from 0.31% in Lake County, Illinois, to 27.05% in Floyd County, Indiana (see figure 1). Iowa planted 973,112 acres, Indiana 936,118 acres, and Illinois 708,105 acres. The region more than doubled its area under cover crops between 2012 and 2017, with most of the increase taking place in Iowa (593,498 acres), followed by Indiana (389,521 acres), and Illinois (343,179 acres).
The rate of adoption of cover crops, calculated as the ratio of cover crop area to total 2017 cropland acres (to eliminate the effect of changes in cropland acres through time from the comparison), increased between 2012 and 2017 from 1.45% to 3.67% in Iowa, from 4.71% to 7.25% in Indiana, and from 1.34% to 2.95% in Illinois. Total cropland acres are calculated as the sum of planted (e.g., harvested, pastured, and failed) plus not planted (e.g., summer fallow and idle) acres. The overall low rates of adoption suggest that under the “right” conditions, cover cropping could be substantially scaled up into large additional areas in the I-states to supply agricultural carbon credits into voluntary carbon markets. Among the most relevant incentives to create the “right” conditions are solid price signals from a robust carbon credit demand, transparency in the methodology used to translate practices into credits, and the possibility to stack payments across government-sponsored cost share programs and payments from carbon programs.
An analysis of changes in adoption rates by county indicates that 199 counties out of the 289 counties in the I-states for which there is complete data (69%) increased their rates of adoption by at least 1 percentage point between 2012 and 2017, while 59 counties (20%) kept it relatively stable (change between 0 and 1 percentage points), and 31 counties (11%) experienced declines in their rates of adoption, or disadoption (see figure 2). The biggest gain in cover cropped area (20,001 acres) occurred in Keokuk County, Iowa, and the largest drop (-6,374 acres) was observed in Orange County, Indiana.
In Indiana, twenty counties experienced a total decline in cover crop area of 40,616 acres, equivalent to 22.7% of their 2012 cover cropped area. In Illinois, seven counties reduced their cover cropped area by 5,603 acres, equivalent to 28.0% of their 2012 levels. In Iowa, four counties experienced a total decline of 8,572 acres, equivalent to 42.5% of their 2012 levels.
No-Till in the I-States
In 2017, no-tillage systems were implemented on 19,571,098 acres in the I-States, equivalent to 30.84% of their total cropland area, with high variability in the intensity of adoption across counties, ranging from 2.97% in Winnebago County, Iowa, to 77.04% in Shelby County, Iowa (see figure 3). Iowa used no-till on 8,196,199 acres, Illinois on 6,471,985 acres, and Indiana on 4,902,914 acres. The region increased its no-till area by 9.0% between 2012 and 2017, with most of the increase taking place in Iowa (1,245,363 acres), followed by Illinois (424,156 acres), which compensate a net disadoption of no-till on 49,217 acres in Indiana.
The rate of adoption of no-till, calculated with respect to total 2017 cropland acres, increased between 2012 and 2017 from 26.47% to 30.88% in Iowa, from 25.46% to 26.96% in Illinois, and declined from 39.33% to 37.98% in Indiana. The overall high rates of adoption suggest that no-till could be more difficult to scale up into additional areas in the I-states than cover crops. Particularly concerning for this practice is the potential for carbon reversals occurring when long-term no-tilled fields are tilled to manage weeds, reduce compaction, or other reasons, releasing the carbon sequestered in the soil back to the atmosphere. While voluntary carbon programs will likely penalize a temporary disadoption of cover crops by temporarily discontinuing the accumulation of partial carbon credits, a carbon reversal from a temporary disadoption of no-till could have much harsher consequences, ranging from losing accumulated credits to monetary sanctions.
An analysis of changes in adoption rates by county indicates that 175 counties out of the 291 counties in the I-states for which there is complete data (61%) increased their rates of adoption by at least 1 percentage point between 2012 and 2017, while 20 counties (7%) kept it relatively stable (change between 0 and 1 percentage points), and 96 counties (33%) experienced disadoption (see figure 4). The biggest gain in no-till area (62,616 acres) occurred in Plymouth County, Iowa, and the largest drop (-35,435 acres) was observed in Jasper County, Indiana.
In Indiana, forty-six counties experienced a total decline in no-till area of 369,247 acres, equivalent to 14.6% of their 2012 cover cropped area. In Illinois, thirty-nine counties reduced their no-till area by 292,086 acres, equivalent to 12.1% of their 2012 levels. In Iowa, eleven counties experienced a total decline of 95,457 acres, equivalent to 11.1% of their 2012 levels.
Concluding Remarks
This article highlights the non-permanence of two annual conservation practices between 2012 and 2017 in the I-States: 11% and 33% of the counties in the region disadopted cover crops and no-till, respectively, reducing their areas in those conservation practices by 25% and 13% with respect to 2012 levels. If these percentages are indicative of the probability that farmers participating in voluntary carbon programs could temporarily discontinue contracted practices and trigger penalties from carbon programs, our findings suggest that farmers planting cover crops and using no-till would face non-trivial probabilities of being penalized over the life of a multi-year carbon contract.
References
Pannell, D.J., and R. Claasen. 2020. “The Roles of Adoption and Behavior Change in Agricultural Policy.” Applied Economics Perspectives and Policy 42(1):31–41.
Plastina, A., and O. Wongpiyabovorn. 2021. “How to Grow and Sell Carbon Credits in US Agriculture.” Iowa State University Extension and Outreach, Ag Decision Maker File A1-76.
Sawadgo, W., and A. Plastina. Forthcoming. “The Invisible Elephant: Disadoption of Conservation Practices in the United States.” Choices. Accepted for publication on August 22, 2021.
US Department of Agriculture (USDA). 2021. Farm Income and Wealth Statistics. Economic Research Service. Washington, D.C., September 2.
Suggested citation:
Plastina, A. and W. Sawadgo. 2021. "Cover Crops and No-till in the I-States: Non-Permanence and Carbon Markets." Agricultural Policy Review, Fall 2021. Center for Agricultural and Rural Development, Iowa State University. Available at www.card.iastate.edu/ag_policy_review/article/?a=133.