Get your operation and your customers ready for carbon pricing.

Agriculture is a carbon-intensive operation, dependent on fossil fuels and fertilizers to continue to meet the growing responsibility to feed the world. At the same time, the federal and provincial governments either have or will put a price on carbon.

Matt Carstens, the senior vice-president of the newly-developed Land O’Lakes SUSTAIN business unit, says that agri-retailers looking to lower potential costs by reducing the carbon footprint of their business and of their customers should look first to nitrogen-efficiency. He stresses that this doesn’t mean retailers should necessarily recommend reducing nitrogen use — there are cases where they’re using the right amount or even too little.

“I think if you look at where the biggest gains can be made, nitrogen-efficiency can greatly benefit the planet, growers and agri-retailers,” he says. “It’s in that nitrogen space where you can most easily reduce your carbon footprint.”

Those that have the right attitude and make the commitment at all levels of their organization are winning and are seeing the benefits. Matt Carstens

These efforts won’t just improve your operation’s carbon footprint — Carstens says it can have a positive impact on a grower’s operation and their relationship with their agri-retailer.

“Those that have taken action at the agri-retail level, they’re really seeing a benefit with that farmer,” he says. “But the biggest benefit they see is optimizing output per unit of input for that grower’s operation. At the end of the day, that’s really what we’re all here for: to produce and feed the world in the most efficient way possible.”

Agri-retailers and their producers can adjust their operations by using new products, new technology and altering their current practices. “As they move forward with their outputs — whether that’s proteins or crops or anything in between — I would say the biggest benefit they’re seeing is that optimization of outputs per unit of input and finding a better balance there,” says Carstens.

Preparing for Carbon Pricing

With the federal government’s upcoming carbon pricing plan just around the corner, Land O’Lakes SUSTAIN has been in talks with locally-controlled agri-retailers in western Canada, as well as various businesses in Alberta that currently work with carbon credits.

“We will continue to expand discussions to include the appropriate personnel in government, whether it’s at the provincial or national level within Canada to make a greater impact in this space,” says Carstens. “But today, the preliminary efforts have been with agri-retailers and with different businesses that have been in this space for several years, prior to some of the most recent announcements coming out of government.”

With so much uncertainty surrounding this upcoming plan, Carstens recommends that agri-retailers and their customers engage with the various programs that help them qualify for carbon credits.

“That’s the best thing you can do, because there’s lots of confusion around what will constitute the plan and what won’t, and the whole government is still sorting this out,” he says. “So, there are a lot of efforts that need to take shape before then. But right now, the best thing is what can and should a grower be doing to help them optimize output per unit of input with an eye on greenhouse gas emissions.”

Since the plan is still in development, the question of its overall impact on the agriculture sector remains. Carstens says that any carbon pricing plan that doesn’t help retailers and producers maintain or grow profitability is simply not sustainable. “That’s really the fundamental principle of sustainability,” he says. “If profitability can’t be maintained or grown, it’s not sustainable — it won’t last. So, I don’t think any agri-retailers or growers should fear this because at the end of the day, there’s got to be an element of profitability in the equation.”

Reap the Benefits

By improving the sustainability of their operations, he adds that retailers and producers will also see a marked improvement in their water quality and soil health. “It can greatly benefit the producer when we look at adjustments to what they’re doing in the production cycle and what it can mean for water quality and soil health,” he says. “When you think of soil, that’s the greatest asset the farmer has in many cases. I think most producers and agri-retailers see the connectivity between not only their carbon footprint, but also water quality and soil health.”

But according to Carstens, western Canada is already ahead of the curve when it comes to reducing their carbon footprint, and adds that the introduction of this carbon pricing plan brings up many interesting elements for the ag community to adjust to.

“We’ve got to continue to find the time and create the right focus at the agri-retail level, producer level and everything all the way down to food companies and grocery stores to, ultimately, help provide the right efforts for consumers,” he says. “We need to be tailoring the message to the consumers. So, I would say that time and focus are the two elements that retailers and their customers need to be aware of.”

With all these factors to keep in mind, many may be wondering about the process of transitioning to a sustainable operation. According to Carstens, the process can be a smooth one with the right attitude and proper commitment to continuous improvement. “Those that have the attitude and make the commitment at all levels of their organization are winning and are seeing the benefits,” he says. “Not that it’s an easy journey, but it’s definitely one worth taking.”