Paying Farmers For Ecosystem Services

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

Several companies have emerged offering to pay farmers for carbon sequestration if certain practices are adopted. David Widmar, managing partner at Agricultural Economic Insights believes there can be a future in paying farmers for these types of ecosystem services and other non-food uses.

Widmar... "That we think will be an important trend to keep an eye on and monitor long term. You know, it could be something that's selling the hunting rights to, your ground. It could be leasing the ground for a solar or a wind installation or selling it for those things. You know, the demand for ag resources from non-ag uses could still be a really big deal. I think, you know, the carbon credits is a very specific example. And we haven't seen the interest for policy action kicking in yet. So it's going to take a while for these adoptions to kick through. And I think the other thing to keep in mind is that. If you're going to get a 10 or a 20 or a 50 an acre per year carbon payment that isn't like a free ATM that's going to benefit your farm for forever into the future. It's not going to save your farm finances for forever. We can still get ourselves in trouble long term with this new income stream that all of a sudden we adjust our cost of production to our standards of living or our just our business models adjust to that. And so it's not going to necessarily foolproof our business for the rest of our career. We have to be very cautious about how we pursue those and how we implement those into our business. And then sort of what's next, what do we look to long term."

Widmar is an agricultural economist specializing in agricultural trends and the farm economy.