Agricultural Sustainability

As a mission-driven financial cooperative, we believe in partnering with our customer-owners to build sustainable futures.


Supporting and enabling our customer-owners to achieve their goals of greater sustainability.

Sustainability begins with economic viability. That is why Frontier Farm Credit is here – to ensure farmers and ranchers have access to credit and risk management tools in good and tough times.

Producers also understand their livelihood depends on good stewardship and have long worked to leave something better for future generations. Frontier Farm Credit is here to support customer-owners as they build more sustainable operations. Through education, collaboration, industry partnerships and more, Frontier Farm Credit is helping make agriculture stronger for today and tomorrow.

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Our focus on environmental sustainability is a natural outgrowth of our long-standing support for the economic, generational and social well-being of our customer-owners and their rural communities.

Soil health, reduced reliance on natural and man-made resources, lower carbon emissions – sustainability takes many forms. And as consumers, policymakers and investors increasingly look to agriculture to help solve environmental problems, farmers and ranchers face opportunities and unknowns. Our approach is to help producers make sense of both.

As a producer-owned cooperative, we finance and insure agriculture as it comes. To that end, we do not and will not prescribe production methods; those are individual choices left up to each customer.


Educate customers about trends, issues, and opportunities.


Enable customers to participate in climate-smart practices through specialized products and programs.


Engage with other organizations to collaborate on new opportunities in sustainable agriculture where our funding, expertise and/or resources can bring value to our customers, associations, and industry.

Digging into Carbon Markets

Sep 14, 2022, 12:31 PM by Frontier Farm Credit Staff Reports
Learn more about the state of carbon markets and factors to consider before jumping in.

Frontier Farm Credit and Farm Credit Services of America (FCSAmerica) are co-sponsoring a webinar series, Two Economists and a Lender. In this episode, the carbon market is discussed by economists David Widmar and Brent Gloy. Myriah Johnson, our vice president of Corporate Sustainability, provides background on the carbon market, agriculture’s role in sequestering carbon and opportunities to sell carbon credits to companies looking to offset pollution. Below is an overview of the conversation.


Carbon Market Definitions

Carbon Credit – A tradeable permit or certificate that provides the holder of the credit the right to emit one ton of carbon dioxide or an equivalent of another greenhouse gas.
Carbon Inset –Implementation of sustainable practices that sequester carbon.
Carbon Offset – Investment in practices that reduce carbon emissions elsewhere to compensate for your carbon footprint.
Additionality – Offset is created for something that wouldn’t have been done otherwise.
Permanence – An offset that is created and can’t be easily undone.
Verifiable – The offset can be measured and verified.


Much of the current climate change discussion deals with getting carbon out of the atmosphere and back down in the soil. Agriculture is the one industry that deals directly with soil and has the capacity to influence the movement of carbon from the atmosphere into the soil. Of course, we can’t control it completely. We know weather can play a huge role in this effort. In some ways, weather almost dwarfs our influence as land managers. But that's not to say we're not going to try.

how does agriculture sequester carbonA variety of land management practices can help us achieve sequestration. The image - how does agriculture sequester carbon - only cites a few. Cover crops and reduced tillage probably are among the most familiar. Grazing management practices also can influence carbon storage on pasture and grassland.

While we understand the practices that contribute to sequestration, there is much we don’t know, including how fast we can store carbon and for how long. The uncertainty around carbon storage contributes to some of the uncertainty we see in the carbon marketplace and the struggle to get it up and running. That hasn’t stopped investment in the industry or buyers.

Carbon buyers are companies that have committed to reduce their emissions. An airline, for example, may have announced it will reduce its carbon footprint to zero. But alternative fuels can only go so far in achieving that goal, so the airline buys carbon credits – one ton of sequestered carbon for one ton of emitted carbon – to get it closer to its target.

From the perspective of an agricultural producer, a carbon credit is just another commodity. But getting it from field to market requires certification. Middlemen will test carbon in the soil to verify it has been sequestered. Once certified, a credit goes into a carbon registry, where it can be sold as an inset or offset, but not both. This paper trail ensures a carbon credit is sold only once.

How to Evaluate the Sale of Carbon Credits

The sale of a carbon credit is, in many ways, the same as any other commodity. Think of corn. If you were offered $7 a bushel, would you take it? That’s probably not enough information on which to make a decision. You also would want to know things such as how many bushels are required and at what level of quality, when and where must it be delivered, what are the payment terms . . . ? When producers have the opportunity to sell carbon credits, it is just as important to step back and assess all the requirements. The sale of corn is more intuitive to most producers than the sale of carbon credits, so it’s important to spend time learning about the market and its various opportunities. If producers only consider the one opportunity in front of them and allow that to drive their thought process, they could miss the bigger picture and lock themselves into a contract that isn’t the best deal for them. The goal is to be in the driver seat, to think strategically. Writing down key questions and the answers you have arrived at is an effective tool for decision-making. Also capture the thinking of family members, employees and other trusted advisors. It’s important to revisit your answers; it can reveal how your thinking has changed over time and where there are weaknesses or blind spots.

Here are some questions to get you started:

  • What are your current thoughts and expectations regarding carbon credits? Do you see it as an exciting opportunity, think it could change the world and has no downside or are you skeptical about the market and what it can accomplish?
  • What would cause you to change your mind? If it’s information, what would that be and is it available? Will it be the future?
  • Is there a significant management burden to entering the carbon market?
  • Can you enter the carbon market in increments – say just a few acres -- to get familiar with it?

The time invested today in answering these and other questions will pay off when opportunity presents itself. It’s important to be realistic about what the market and its opportunities and understand what you want and need to get from it.

Watch the full webinar recording from August 25 below. Explore past and upcoming webinars


What are Carbon Credits

Carbon credits provide an opportunity to transfer wealth from urban to rural areas as Fortune 500 and other companies look for agricultural producers who can help them meet their climate goals. But the carbon market also is in its early days and in constant flux.

The science on sequestration lags market interest and, as a result, buyers are determined not to overpay for something that might not deliver as expected and producers are concerned that they won’t be fairly compensated for their work and land commitment.

In this environment, says Tony Jesina, our senior vice president of insurance and a leader in our sustainability initiative, caution is warranted. Take time to talk to trusted advisors to decide if a contract is a good fit. The questions below, drawn from Texas A&M AgriLife Extension, are a good starting point for evaluating contracts.

Who is the buyer? Some companies are approaching producers directly. In other cases, “market makers” might take a cut – say, 25% -- to arrange a contract. It is important to know who you will be partnering with and why they are in the agricultural space. Some key questions: How long has the buyer been in the carbon market? What expertise does the buyer have? Does the buyer have a good reputation and, in the case of a middleman, who is on the other end of the relationship?

What are the required practices? Is the buyer looking for reduced or no-till practices, cover crops and/or water conservation measures? It’s important to know exactly what is expected of you.

How long is the term of the contract? Many are for multiple years. Some are for one year. As with most areas of carbon contracts, terms vary widely. Know what you are signing up for and for how long.

What is the durability of sequestration? Parcels might need to be maintained in a certain state to ensure carbon is sequestered for a defined period of time. Microsoft, for example, has some contracts that require 13 years of sequestration. It also has contracts that are durable for 999 years – generally for forests.

Consider oversubscribing to ensure you can sequester the required amount of carbon for the required number of years. For example, if you sign up 80 acres in the contract, set aside 120 to 130 acres in the event some of the land has to be torn up.

What is the payment structure? How and when will you be paid. If the ground is rented, know who gets paid. Does it go to landlord or is the tenant compensated for doing the work.

How will sequestration be verified? Carbon sequestration is tricky and there is little consensus on sequestration levels. Some companies, for example, are determining sequestration levels based on specific practices and soil type. They are offering payment for practice. Others are sampling soil to verify carbon levels at the start and end of a contract.

What data is required? The more data producers have specific to their practices, land and sequestration levels, the better their position in negotiating contracts. Work is under way to make it easier and more cost effective to collect good data.

At the same time, producers need to be thoughtful about data sharing. Before signing a carbon contract, know not only what data is required and when it must be provided, but also who will have access to it and how it will be used.

What else can be done with the land? Determine how the contract impacts – or limits – what you can do beyond an agreed-upon practice. For example, can you tile? How might the contract impact irrigation practices?

What are the penalties in the contract? If you have a wet fall and lots of compaction and need to till, will you be penalized for doing so? What if you are four years into a five-year contract when this happens – do you lose all or a portion of payment?

It’s also important to know where possible disputes about penalties or violations will be litigated. If, for example, it’s in Delaware, what would that involve in terms of time and cost?

In the event of a death or land sale, what happens to the contract? Determine if the contract stays with land or ceases to no longer exist. This will impact heirs or possible buyers and could lead to penalties.

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Frontier Farm Credit serves farmers, ranchers, agribusinesses and rural residents in eastern Kansas. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.