California’s Healthy Soils Program – empowering farmers to be part of the climate change solution.
Many farmers want to do the right thing for our climate but when margins are already so tight, it’s difficult to make happen. Our current economic system doesn’t reward farmers – or most businesses – for socially and environmentally responsible practices. California, a leader on innovative climate change solutions, has had a “cap and trade” program in place since 2013 to address this problem. Known as California Climate Investments, the program generates revenue, which it invests in part in regenerative agriculture. Between 2016 and 2019 California has pumped $40.5 million into its Healthy Soils Program.
The great thing about this program is that it pays farmers to do the things they care about, but that don’t inherently improve the bottom line. Farmers can draw down carbon through cover cropping, no-till, reduced-till, mulching, compost application, and conservation plantings while getting paid for it.
But at the same time, we need to see farms get the financial planning and accounting assistance they need to make these programs work through the lifecycle of the farm business. We consistently work with farmers that participate in grant and expense reimbursement programs who are not up to speed on accounting principles for these kinds of programs. At the most basic level, grants are income and farmers need to plan for corresponding, eligible expenses to manage their tax obligation. Reimbursed expenses are handled differently, and the tax year can close without reimbursable expenses appearing as income.
Farmers need and deserve access to good education and professional support to be successful with programs like these. The Rodale Institute’s report that came out in September, Regenerative Organic Agriculture and Climate Change: A Down to Earth Solution to Climate Change, tells us that through these regenerative agriculture practices, we can sequester massive amounts of carbon from the atmosphere and even reverse climate change. This idea is gaining more and more momentum and hopefully will lead to the more programs like California’s Healthy Soils Program. Let’s work together to be sure the legal and financial education is there for them, too.
Check out California’s Health Soil Program including eight videos of regenerative agriculture projects that the program has funded: https://www.cdfa.ca.gov/oefi/healthysoils/.