GRAY MAGUIRE: Vital bridge established to enable the flow of finance to progressive farmers

SA saw a major milestone achieved within it’s borders last week.

The Anthesis Group’s AgriCarbon programme became the first in Africa, and only the second in the world, to receive a carbon credit issuance under Verra’s Verified Carbon Standard improved agricultural land management (VM0042) methodology.

The methodology quantifies the greenhouse gas emission reductions and soil organic carbon removals resulting from the adoption of sustainable farming practices and generates income for participating farmers from the sale of the credits. 

The milestone is significant not only because it is a first for Africa and the developing world in general, but more so because of the dire necessity for SA farmers to improve their climate change resilience.

While most farmers will testify to being eyewitnesses to increased climate variability, most Business Day readers are not farmers, so for some perspective: the department of agriculture, land reform & rural development finds that the observed rate of regional warming of the country has been 2°C and above for many areas over the last century, roughly double the global average increase.

The upshot of this is that the annual number of hot days as well as extreme daily rainfall events has increased significantly, resulting in an unstable agricultural production environment that undermines our food sovereignty.

The department estimates that the climate change impact on agriculture could reduce real GDP by 3%, with cascading impacts on the overall economy of 5%-10% of GDP over the next 25 years.

According to Agri SA, cultivated soils in SA have lost 45%-65% of their soil carbon stocks over the last 100 years thanks to unsustainable farming practices, which implies enormous carbon sequestration potential from the adoption of conservation and regenerative agricultural practices.

The carbon market value of sequestration aside, soil carbon is a key indicator of soil health, which not only helps farmers sustain higher yields with fewer inputs, but protects crops from both drought and flooding. 

The farming practices that led to the degradation of SA soil carbon stocks are still being implemented on at least 75% of SA farmlands, but progressive farmers are responding by adopting regenerative farming practices such as cover cropping, reduced tillage and diversified crop rotations.

These practices enhance soil health, boost productivity and transform farmland into carbon sinks over time — removing carbon dioxide from the atmosphere and playing a crucial role in both climate change mitigation and adaptation.

That said, a 2022 study by agricultural research group GrainSA on the financial implications of transitioning from conventional tillage systems to no-tillage and/or fully integrated crop-livestock regenerative conservation agriculture systems in the Mpumalanga and Maluti grain production areas, found that while the long-term cumulative cash flow impacts of transitioning to more sustainable systems were positive for farmers, “there seems to be a moderate reduction in the cumulative free cash flow no-tillage and conservation agriculture in the first few years”.

This is primarily due to the initial costs associated with the acquisition of implements (such as no-till planters) and livestock for fully integrated systems, which requires investment from often cash-strapped farmers. 

The GrainSA study further argues that “these results have important implications for food security and system resilience. Producers must seriously consider the transition to more sustainable and regenerative options, but to do that the financial sector has to invest in conservation agriculture and assist producers in making the required transition.”

“To support the successful conversion to no-tillage and conservation agriculture is an investment in the future and will lead to a more food-secure SA.” 

Thus far the financial sector has been slow to take up this call to action, but with the ground-breaking new tool of a proven carbon credit revenue system being made available to the agricultural industry, a vital bridge has been established to enable the flow of finance to progressive farmers. 

• Maguire is carbon project manager at Climate Neutral Group SA. He writes in his personal capacity.