FarmCredit: Developing Carbon and Biodiversity Insetting in the Agri-food Value Chain

Edward Knapp, Cian White, Luff, Martha O’Hagan, Jane Stout and Yvonne M. Buckley

No 356725, Agricultural Economics Society 99th Annual Conference, April 14-16, 2025, The University of Bordeaux, France from Agricultural Economics Society (AES)

Abstract: To reach policy targets of reducing farm greenhouse gas emissions (GHGs) and to improve farmland biodiversity, additional finance is needed outside of traditional government programmes. One method of encouraging private finance to support biodiversity enhancements and GHG reductions on farms is through insetting, that is crediting farmers for their on-farm environmental actions within the agrifood value chain. In this study we explore the potential of carbon and biodiversity insetting by engaging with stakeholders to co-design the tools required to support robust and transparent on-farm sustainability improvements. Monitoring, reporting and verification (MRV) platforms have been developed to assess soil carbon, biodiversity and assess the carbon footprint of farms. FarmCredit works with two leading MRV technology companies to assess soil carbon, biodiversity habitat extent and the carbon footprint of participating farms. In conjunction with stakeholders in agri-finance, food processing, and government, this study co-designs an action-based insetting payment system that farmers can realistically engage with, and that agri-food corporates and government bodies want to invest in. Finally, we consult with stakeholders to develop policy frameworks to support carbon and biodiversity insetting in the agri-food value chain. The tools developed in FarmCredit can be applicable to dairy and other sectors of agriculture and land use within the agri-food value chain. The development of robust insetting sustainability programmes within the agri-food value chain also has the potential to drive down emissions in the Agriculture, Forestry, and Land Use (AFOLU) sector and may encourage carbon sequestration in agricultural soils or biomass. Robust insetting may also prevent agri-food sector carbon credits from carbon sequestration or avoided emissions from being utilised as offsets by other GHG emissions intensive sectors.

Keywords: Agribusiness; Agricultural Finance; Environmental Economics and Policy; Supply Chain (search for similar items in EconPapers)
Pages: 14
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aes025:356725

DOI: 10.22004/ag.econ.356725

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