November 3, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

It has been widely accepted that farming, by its very nature, is an extractive industry. But the realities of water pollution, soil degradation, erosion, and loss of fertility are creeping and cumulative – embodied more as undercurrents to the activity of farming, making the effects easier to dismiss until an impending crisis happens. 

Furthermore, we have done a poor job in modernizing how we look at the profit and loss associated with farming. Higher crop yields and more animals, partnered with low cost of inputs, have traditionally meant higher profit. For centuries, the unaccounted losses tied to traditional extractive farming have been viewed as unavoidable, and inherent – but it need not be this way, according to the Union of Concerned Scientists. They stated that a shift from extractive to regenerative agriculture is not only possible, but profitable when taking a more modern, holistic approach to the costs and output of agricultural production.

Last year, LandFund Partners (LFP), which owns and manages more than 40,000 acres in the Mississippi River Valley, launched the LFP Soil Enrichment Fund (SEF), an open-ended, liquid investment vehicle committed to using regenerative farming methods, that LFP aims to grow to an asset portfolio valued at $1 billion. 

So how does a soil enrichment fund work?

LFP partnered with AgriCapture and Climate Action Reserve to generate carbon credits from the farmland held by the SEF. The initial 20,100 acres were already part of the first large-scale carbon credit scheme in the Mississippi River Valley when the SEF was announced in October 2021, and most of the SEF farms were eligible to earn carbon credits beginning this year.

AgriCapture’s agronomists and sustainable farming experts work to determine the optimal combination of climate-friendly practices for each farm. The team then collects data from farm records, satellite imagery, and through soil sampling that is submitted for validation and verification of emission reduction through Climate Action Reserve.

“We will employ best-in-class regenerative agricultural practices to create healthier soils and more climate-friendly farms. This is not only the right thing to do, but it will also make our land more valuable,” said John Farris, founder and CEO of LFP, last October.

One year later, the first carbon credits have been issued as part of a pilot carbon credit project for two of LFP’s farms in Arkansas. These pilot farms provided proof of concept, which led LFP to enroll their 15 farms totaling more than 25,000 acres in the project. These additional farms should receive carbon credits at some point in 2023, according to the investor.

“We are incredibly proud that LandFund is now the first investment fund to receive agricultural carbon credits for on-farm practices from a premier carbon registry. We are showing that farming can be part of the climate solution,” said Chris Morris, president and COO, LandFund Partners.

LFP and AgriCapture stated that these agricultural carbon credits – successfully generated through their partnership within one year of harvest – stand as proof that there is a sustainable, nature-based approach to climate change with the power to provide positive financial benefits to climate conscious farmers.

Morris concluded, “When we made a commitment to using regenerative farming practices to improve soil health, we knew we needed a partner organization that would get results when it came to carbon credits. AgriCapture delivered our 2021 carbon credits within 12 months of harvest.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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