The Tricky New Way That Big Ag Is Getting Farm Data

How private carbon payment programs are giving commodity buyers precious information used to squeeze farmers.

The grain trader and food processor Cargill is the latest agribusiness giant to join the carbon credit rush. Last month, the corporation publicly launched “Cargill RegenConnect,” which will pay farmers for adopting techniques, such as reduced tillage and cover cropping, that aim to sequester carbon in agricultural soil. Cargill is partnering with the software firm Regrow to measure farmers’ total tons of sequestered carbon and generate carbon offset credits to sell on larger exchanges. Polluting corporations buy these credits to help meet voluntary “net-zero” emissions pledges. One-fifth of the world’s largest corporations have made such commitments.

That’s because nonprofits, corporations, and lawmakers across the political spectrum think carbon credit programs can leverage demand for offsets to fund farmer-made carbon sinks and help mitigate climate change. Some environmentalists, however, doubt their efficacy, pointing to issues in soil carbon measurements, uncertainties in long-term sequestration, barriers to entry for smaller farms, and environmental injustices, to name a few.

Programs like Cargill’s highlight another concern with budding carbon programs: their ability to consolidate access to valuable agricultural data among dominant agribusiness firms. Estimating and verifying carbon sequestration requires monitoring and collecting large amounts of farm-level data, which industry leaders can use to build market power. Access to superior data can expand the competitive advantage of vertically integrated seed and ag software companies over upstarts or improve the advanced market intel of powerful commodity traders. As it stands, farmer data privacy and usage are largely determined by voluntary corporate pledges and contracts. “It’s impossible to reconcile the desire for closely verified carbon offsets with not giving more power to these agribusiness giants who have been consolidating at rapid rates,” says Jason Davidson, senior agriculture campaigner at Friends of the Earth. “That’s one of the scariest things about data in this equation.”

Leading firms such as Cargill, Bayer, Nutrien, and Corteva have all launched programs to pay farmers for adopting carbon sequestering techniques. Revenue to pay farmers comes from generating and selling carbon offset credits on independent exchanges. Sometimes, these programs take ownership of farmer-generated credits and pay farmers a fixed rate per practice per acre. Other programs promise farmers a portion of their carbon credit sales with a guaranteed minimum payment per credit.

To verify carbon credits, carbon tech firms collect detailed information from farmers, farm equipment, and satellite technology about what they’re planting and how they’re planting it. Beyond assessing the carbon cycle, all this data provides valuable information on farmers’ production practices and yield that can benefit agribusinesses’ larger enterprises.

Many private carbon programs, such as Bayer’s and Corteva’s, require that farmers upload information to verify carbon sequestration through in-house digital platforms, ensuring their access to this data and expanding their platform’s user base. Cargill directs farmers to upload their data to a third-party carbon tracker, Regrow, but requires a Cargill customer account to participate, linking the systems. And because just one change in practices can release years of stored carbon, some carbon credit contracts sign farmers up for five-, 10-, even 20-year commitments. This gives carbon payment platforms long-term, near-exclusive access to the farm data.

Farm data consolidation among the largest firms creates competitive barriers, especially in the market for digital agriculture software. Corporations such as Bayer sell farmers digital agriculture programs that generate personalized recommendations of products to use or techniques to adopt. Companies need large and diverse data sets to create and fine-tune this software. “To develop a smart farming solution product, start-ups need data sets to train their algorithms,” explains Can Atik, a doctoral candidate at Tilburg University who has been studying competition in digital agriculture. “If these first movers hold the critical amount of data, newcomers may face some significant problems [and] entry barriers.”

Integrating digital agriculture platforms, carbon credit programs, and crop input manufacturing also creates clear conflicts of interest. For instance, many no-till systems rely on using more glyphosate—the chemical found in Roundup—to kill weeds previously put under by the plow. Bayer, the maker of Roundup, has a profit motive to recommend glyphosate-heavy no-till methods to farmers in its carbon program.

For commodity traders, such as Cargill, access to more farmer data gives them a competitive edge in futures trading. With more than 100 staff data analysts, Cargill extols their superior, nonpublic data sets as an essential part of their business and a revenue stream. “Data is king in markets, and that includes commodity markets where access to as much data as possible can significantly inform and benefit a commodity trader’s positions,” says Tyson Slocum, director of Public Citizen’s energy program. “If Cargill is obtaining thousands of farmers’ crop yield data or other information like that, that could be extremely useful.”

Carbon platforms have already proven that their data can generate advanced and accurate insights. In 2017, the leading agriculture carbon credit start-up Indigo predicted the U.S. corn crop yield months before the USDA with greater than 99 percent accuracy.

Farmers have long feared that increased data collection could give commodity buyers too much information to further squeeze them. “The potential risk for a farmer is you have a large trader that could be on the other side of a transaction . . . knowing everything you know,” Slocum says.

There are no legal barriers preventing corporations from gathering farm-level data to speculate on commodities or push their products. The only governance of farm data comes from voluntary corporate pledges and privacy policies. In 2014, several leading agribusiness corporations signed a nonbinding “Privacy and Security Principles for Farm Data” pledge, which included a principle prohibiting the use of farm data to speculate in commodity markets. Notably, Cargill did not sign this pledge. A version of Regrow’s privacy policy, dated April 2017, did not contain an explicit prohibition on using data for speculation, though the terms primarily authorize collecting data for advertising and improving the app. A more current Regrow privacy policy is not publicly available. Cargill and Regrow did not respond to a request for updated information on their privacy policies. Climate FieldView’s privacy policy says it will not use farm data for speculative trading, other than hedging for internal risk management.

Atik is studying how government regulations granting farmer privacy and data portability rights could improve competition by allowing farmers to switch digital ag platforms more seamlessly and break data hegemonies. Others, such as the World Bank, promote more open and publicly accessible data sources to encourage innovation.

A popular bill with bipartisan support, the Growing Climate Solutions Act, would direct the USDA to connect farmers with private, federally certified carbon traders, which could dramatically expand these programs’ reach and data advantage. Given the controversies surrounding private carbon trading, opponents contend that there are more effective ways for the government to support climate-smart farming. This includes increasing funding for existing USDA environmental improvement programs such as the Environmental Quality Incentives Program and the Conservation Stewardship Program, which have more interested applicants than they can fund.

As Steve Suppan, a senior policy analyst for the Institute for Agriculture and Trade Policy, says, “You get a lot more soil health bang for your buck by investing especially in conservation stewardship programs and climate hubs. There are a lot of different policy issues at play and alternatives outside the carbon market project.”

Alexandra Spring contributed research and editing to this story. A previous version of the piece first appeared on Food and Power.

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Claire Kelloway

Claire Kelloway is a senior researcher-reporter for the Open Markets Institute and the lead writer for Food & Power.