Monday, May 25, 2009
Sustainable Agriculture Financing
For today’s farmers to have the incentive to adopt sustainable farming methods, stewardship must lead to an increase in the farm’s income. Stewardship is more than just the use of organic farming methods, however, but includes methods such as biodynamic farming. Biodynamic farming produces robust and flavorful crops, uses methods that reduce the usage of nitrogen and phosphorous rich fertilizers, plants vegetation in riparian zones, creates shading, and generates water quality credits, easements, transferable development rights, renewable energy, and carbon credits.
Any and all stewardship methods can be utilized by farmers to generate extra income without reducing crop yields.
The tradeoff a farmer faces between selling crops themselves, versus selling the water rights connected to the croplands, lies in their price comparison. If selling crops such as rice allows the farmer a higher income gain than selling the crop lands’ water rights, the farmer will typically choose to grow the crops instead of fallowing his or her fields and selling the rights. The California Drought Bank, which faced little success when attempting to buy its desired amount of water rights from farmers noted that the price of water rights was too low.
While many organizations focus on educating farmers on the various ways to generate income from stewardship, our society still faces a general lack of knowledge regarding the current existing market mechanisms, and how to generate the financial incentives necessary to increase stewardship.
More agricultural organizations have been joining the Chicago Climate Exchange (CCX) in order to sell the carbon credits they have generated. Such a movement is very encouraging, though it is just the start in a long process toward cementing stewardship as financially viable, attractive, competitive. If we are to expect more farmers to adopt sustainable measures, we must enable them to efficiently create and monetize their farming methods. Mission Markets Inc. provides a crucial step in this process.
Posted by Mike Van Patten at Monday, May 25, 2009 0 comments