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The U.S. agribusiness sector faces long term limits in facilitating carbon income opportunities for farmers and
ranchers (Fs&Rs). The current Environmental Protection Agency (EPA) agriculture requirements focus mainly on
pesticide waste, genetically engineered crops and water resource management. There are no specific greenhouse
gas (GHG) emission reduction requirements for the agriculture industry. However, the first poultry, dairy and swine
animal feeding operations (AFOs) air emissions study has been underway since the summer of 2007. It should also
be noted that GHGs include not just CO2, but methane, nitrous oxide and a multitude of fluorinated gases. In all,
there are almost two dozen radiative and/or ozone depleting gases recognized by the Intergovernmental Panel on
Climate Change. The lack of regulatory direction, the fact that current debate includes only the most recognized
gases and the infancy of current voluntary offset programs is only one half of the dilemma. Legacy farming and
ranching processes create enormous hurdles for any new agribusiness carbon model to take hold. The largest
hurdles exist in implementing wholesale agrisector GHG change management. Wholesale changes would need to:
Individuals and companies involved in the farming and ranching sector are vast and varied and have conducted
business in their respective disciplines one way for a long time. Entrenched legacy farming and ranching processes
that have developed over the last 100 years and the labor intensive nature of their operations do not allow for quick
change. The very infancy of GHG emissions as a business driver would limit the agrisector operators from
committing too quickly to unproven capital intensive programs. The industry is still absorbing the business model
impacts of biofuel and wind and needs flexibility to handle the speed at which the renewable energy landscape
changes. The news media headlines continue to reflect the wind and renewable energy fields in a sort of regulatory
and entrepreneurial flux. This flux is not a reliable business model that Fs&Rs would risk extended financial
investment. To date they have limited their exposure to the leasing of land for wind projects or the upstream
benefits/pitfalls of ethanol, biodiesel and biomass-to-energy production.
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The U.S. state of Kansas is scheduled to host its 11 annual wind and renewable energy conference in 2010. This
has been a catalyst for Ag stakeholder involvement in the renewable energy sector for over a decade. On the other
hand very little uniformed agribusiness renewable business models have developed for the farmer and rancher. In
response, Kansas has now issued their 2010 Alternative Energy Incentives. The incentives include an Agriculture
Value Added Loan program. This is a program that backs low interest (and in some cases forgivable) loans for
feasibility studies, business plans or equity drives in the agriculture sector and allows for the proposal of a myriad of
projects. This is the type of regulatory response needed to allow Fs&Rs greater flexibility to developing technologies.
But the question remains, can the farming and ranching agriculture sector realistically absorb another operating
paradigm.
Here are three long term impacts that could hinder the agriculture sector from implementing GHG opportunities:
At this point the agribusiness farming and ranching sector needs to begin examining GHG emissions income
opportunities at the operational level. First would be the development of standardized (user friendly) best practice
and cost-benefit-analysis formulas. Secondly, stakeholders and in particular farm bureaus representing the local
operator should be seen at the negotiating table. Questions still remain as to what renewable energy technologies
will become long term revenue generating processes. The Fs&Rs will need to decide if there are advantages to not
just participating in future GHG offset opportunities but actually developing offset income opportunities to legacy
agriculture revenue streams that in the best of times are tenuous.