Dive Brief:

• Organic Valley on Monday formally launched an in-house program that pays its dairy farmers to adopt climate-smart agriculture practices.
• The co-op said the first agreements and payments have been provided to farmers participating in its Carbon Insetting Program. The program offers technical support to transition to regenerative farming practices, plus payments for each verifiable metric ton of carbon saved.
• Over the next five years, Organic Valley aims to enroll 500 farms in the program and install close to 1,200 regenerative agriculture practices, Director of Sustainability Nicole Rakobitsch said in an interview with Agriculture Dive.

Dive Insight:

Although the food industry has touted carbon credits as a powerful tool to incentivize farmers to lessen their climate impact, businesses tend to rely on intermediaries such as Indigo Ag to handle the logistics. Organic Valley is taking the unique step of essentially operating its own carbon credit program, cutting out the middleman entirely.

Rakobitsch said building up an in-house carbon credit program affords the co-op greater transparency within its supply chain and better visibility into the environmental impact of each project. It's also allowed the co-op to leverage its relationship with its farmers to encourage them to take the leap into regenerative practices.

"The reason we chose this approach is really rooted in the fact that we're a cooperative. There's a lot of trust back and forth," Rakobitsch told Agriculture Dive. "And so it made sense that we were the one building and implementing the program because we have this really deep relationship with our farmers."

In addition to payments, the co-op's program offers farmers end-to-end support in implementing regenerative practices, including technical assistance and funding. Organic Valley recently received a grant from the U.S. Department of Agriculture's Partnerships for Climate-Smart Commodities, allowing it to offer even more services such as site or project selection.

Projects include renewable energy installments, tree planting, upgrades to manure management technology and using feed supplements to address methane emissions from cow burps.

"These are real funds for farmers taking action to reduce greenhouse gas emissions in the U.S.," Organic Valley CEO Jeff Frank said in a statement. "We're building this business to deliver for farmers who deserve to be rewarded for their efforts and customers who want real choices for climate-friendly dairy.”