Farming systems focused on improving soil health have been shown to have many potential benefits for agriculture and society such as reducing soil erosion, increasing biodiversity, and mitigating climate change.
However, less is known about the financial implications of adopting soil carbon building practices at the farm level.
What are the potential impacts on costs and returns and how can farmers manage the risks associated with adopting new practices?
Working with Ontario’s Greenbelt Foundation, University of Guelph researchers set out to help fill this knowledge gap by applying farm-level budgets for switching to soil health promoting farm practices. They used existing data collected from previous studies conducted in southern Ontario.
The “Towards a Business Case for Soil Health: A Synthesis of Current Knowledge on the Economics of Soil Health Practices in Ontario” determined a range of net returns for the adoption of six different farming practices: reduced tillage, cover crops, increasing crop diversity, organic amendments, rotational grazing and nutrient management.
Lead researcher Dr. Aaron De Laporte from the University of Guelph’s Department of Food, Agricultural and Resource Economics says the study’s results can aid farmers in their decision-making around adopting soil health practices that are beneficial to the environment and might also be beneficial to their bottom line.
The report will also be useful for policy makers in determining which practices would benefit from government support to help reduce the risk for farmers.
De Laporte notes that some of the benefits of soil health practices have not yet been quantified so the estimates are likely conservative.
Here are some highlights from the report:
Tillage Intensity
For a typical grain farm with a corn-soybean rotation, reducing the amount of tillage used resulted in small initial losses but long-term gains. Costs are lower with no-till but yields took a hit in the first few years after no-till was adopted, especially in corn. After five years, yields were similar for no-till and conventional crops leading to gains in the long-term.
Cover Crops
Cover cropping with mixed varieties has higher initial costs but revenues increase over time as yields build, while costs, N credit, and weed control benefits remain constant.
Diverse Crop Rotations
Adding winter wheat to a corn-soybean crop rotation also has initial costs but like tillage and cover crops, the benefits become positive over time, as early as in the second year, with maximum sustained benefits by the fourth year.
Organic Amendments
When the price of manure was zero and transportation distances were short, chicken manure application had a high potential upside but beef manure barely broke even with mineral fertilizers. When nitrogen prices are high, manure would represent greater cost savings and reasonable transportation distances would increase. The authors also acknowledge that manure has a host of other unmonetized benefits such as the application of carbon, additional micronutrients, and soil microbes.
Rotational Grazing
Higher intensity rotational grazing can have potentially greater net returns, but also much higher upfront capital fencing and watering costs.
De Laporte cautions that the farm-level economics of adopting soil health practices varies from farm to farm depending on many site-specific factors such as soil type, drainage, and cropping practices as well as weather, and crop and input prices.
The Greenbelt Foundation is a charitable organization solely dedicated to the health and prosperity of Ontario's two million acre protected Greenbelt.
The full report can be found at https://www.greenbelt.ca/business_case_soil_health