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Bushel’s Comments for the USDA

Here at Bushel, we see the challenges from our customers in front of us. More is being asked of ethanol producers. Consumers are valuing products that come from sustainabile farming practices. Farmers are being rewarded for adjusting how they manage their land resources.

The USDA requested information regarding the agency’s Climate-Smart Agriculture and Forestry (CSAF) Partnership Program strategy. Below is our views in how private companies can work hand in hand with government programs to help secure us a better future.

Question 1.

How would existing private sector and state compliance markets for carbon offsets be impacted from this potential federal program?

It is imperative to recognize the difference in existing private sector markets and state compliance marketsfor carbon offsets. The level of traceability required for Low Carbon Fuel Standards in California and in other emerging state compliance markets, as an example, is likely to be significantly greater than the level of traceability required for the marketing of climate-smart grains.

In the case of state compliance markets, it is our recommendation that USDA invest in and support full traceability solutions that can reliably contribute to the tracking of feedstock improvements. USDA should also engage with other agencies to ensure that these feedstock improvements and updated emissions factors are easily incorporated into GHG lifecycle modeling and recognized by the respective agencies.

Alternatively, we believe that there is an opportunity to enable new grain marketing opportunities for producers that engage in climate-smart practices. In this case, USDA could positively impact the scalability of climate-smart agriculture by investing in and supporting technologies that can reliably tie voluntary programs to the physical grain product. We believe that this would facilitate stacked incentives and allow the entire supply chain to share in the economic benefits of climate-smart agriculture. This may also support the continued efforts of early adopters. Climate-smart marketing claims could be enabled through either Identity Preservation programs or through the establishment of new quality standards in the bulkcommodity supply chain. We discuss this further in our answer to Question 8.

Regardless of the mechanism, we feel that a market’s credibility comes from the ability to certify, quantify and verify that generated assets are legitimate. This inevitably means that any climate-smart programs will rely in some capacity on data collection, monitoring and sharing. We believe that this information should be producer-permissioned and that significant attention be given to scaling the tools and technologies that can lower the cost and the uncertainty related to each of these steps.

Question 2.

In order to expand markets, what should the scope of the Climate-Smart Agriculture and Forestry Partnership Program be, including in terms of geography, scale, project focus, and project activities supported?

A successful transition to climate-smart agriculture will be dependent upon simplified on-farm data collection, streamlined program documentation, data curation, and an ability to connect any resulting and future climate-smart programs to the physical grain buyer. It is our recommendation that these activities be supported by the Climate-Smart Agriculture and Forestry Partnership Program through its scope, project focus areas and project activities.

Bushel Ag in Kansas

Question 3.

In order to expand markets, what types of CSAF project activities should be eligible for funding through the Climate-Smart Agriculture and Forestry Partnership Program? Projects should promote the production of climate-smart commodities and support adoption of CSAF practices.

It is our recommendation that USDA allow for activities related to data permissioning and sharing, digital traceability, digital program enrollment and digital verification to be eligible for CSAF funding through directly administered funds that are awarded on a per-project basis and made available to any qualified entities to apply, including private sector companies.

Project-specific funds would enable software and technology companies to tackle the specific challenges that arise from initiating these climate-smart agriculture markets. For example, the current state of voluntary, private carbon market programs includes many separate enrollment systems that have no connection to the other programs on the market nor to USDA’s Climate-Smart Agriculture and Forestry Partnership Program projects and its resulting standards recognition. Avoiding double-enrollment and double-counting could be attained through the development of a more streamlined enrollment system that allows data permissioning and sharing to occur across partners in the supply chain.

USDA should expand the scope of the CSAF funds beyond that of quantification and MRV tools and include access to funds for solving other barriers to climate-smart agriculture adoption, such as on-farm data collection, data curation, streamlined program documentation, and digital traceability or transparency tools.

Question 4.

In order to expand markets, what entities should be eligible to apply for funding through the Climate-Smart Agriculture and Forestry Partnership Program?

To reduce verification uncertainty or solve other identified challenges, USDA should focus CSAF funds on leveraging existing tools and technologies that can be scaled or repurposed to meet the intended goals of the program.

It is our recommendation that USDA allow for any qualified entities to apply for funding through the CSAF program, including but not limited to private sector companies, technology companies, venture-backed agricultural technology companies and others that may be able to contribute to the expansion of climate-smart agriculture through the development of software and technology solutions.

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Question 5.

In order to expand markets, what criteria should be used to evaluate project proposals for receiving funding through the Climate-Smart Agriculture and Forestry Partnership Program?

We recommend that the criteria for evaluation include: potential to address the identified barriers, understanding of the food and agriculture supply chain and its existing electronic systems, demonstrated success in solving like challenges and ability to benefit early adopters and other supply chain partners along the entire value chain.

The project payment structure should include a range of options, including project-based funding rather than a set payment per ton of GHG generated. This would allow the funding to align with the desired outcomes for technology solutions that are relevant and critical to the overall mission yet unrelated to GHG quantification and measurement.

Question 6.

In order to expand markets, which CSAF practices should be eligible for inclusion?

We appreciate that USDA has defined climate-smart agriculture in a way that provides clarity to the definitions and terminology. We feel this is a critical enabler of scaling new markets. In the future, USDA should consider whether climate-smart agriculture should be restricted to programs and practices that result in lowering our carbon footprint in accordance with the Paris Agreement, or if such terminology should be expanded to include other ecosystem benefits, such as soil health, water quality or other environmental focus areas.

While an expanded definition which includes ecosystem benefits may require similar underlying data sets, the guidelines and definitions will have a tremendous impact on how those data sets are applied and interpreted by an end customer. We bring this to light as an important component to consider before building the necessary technology integrations and resulting data flows.

Question 8.

How can USDA ensure that partnership projects are equitable and strive to include a wide range of landowners and producers? How can the Climate-Smart Agriculture and Forestry Partnership Program include early adopters of CSAF practices?

Our US grain system is dependent upon the efficiencies of the bulk commodity system, whose size and scale allow us to compete in overseas markets and also meet the demands of the domestic industry. While Identity Preservation programs serve an important role and purpose and deserve rightful attention for segregated, premium products, USDA should not overlook the advantages of working through the bulk commodity system to achieve accelerated adoption and recognition of climate-smart practices at-scale.

Today, our US grain products are graded along a recognized quality standard with federally established

thresholds. It is our recommendation that USDA, in collaboration with the Federal Grain Inspection Service (FGIS), establish reasonable, attainable quality metrics for low-carbon bulk commodities and that these standards be allowed to apply to early adopters of climate-smart techniques. These standards should exist in parallel to the many emerging private markets for voluntary carbon credits but should be supported by verifiable documentation or GHG quantification data. These standards should support the blending of bulk commodities, mass-balance accounting approaches and product differentiation in overseas markets.

We believe that the establishment of such standards would unlock opportunities for market differentiation in overseas markets where the idea of sustainability has gained traction, but has henceforth been difficult to define, and where the US has a considerable advantage over other origin countries; e.g. the European Union.

In conclusion, Bushel commends the USDA for seeking feedback from stakeholders on ways to support the USDA Climate-Smart Agriculture and Forestry Partnership Program. We applaud the efforts to encourage voluntary adoption of climate-smart agriculture practices and the intention to facilitate new market opportunities for US agricultural producers.

We believe that the transition to climate-smart agriculture will require a deeper commitment to building a digital infrastructure alongside and akin to our physical grain infrastructure. The US agricultural industry is among the most efficient in the world, and we believe that our continued digital transformation will enable new markets, new programs and new opportunities as outlined above. Thank you for allowing us to provide input. We look forward to working with USDA and other supply chain partners in this endeavor.

For further questions or information, please contact Allison Nepveux, Bushel’s Director of Sustainability, [email protected]