FarmTogether partners with Indigo Ag to monetize carbon credits

Crowdfunding platform FarmTogether will enroll its eligible farmland assets with Indigo Ag’s carbon farming program.

The Carbon by Indigo program will provide FarmTogether farms and investors with end-to-end carbon credit generation support, including on-farm practice change guidance and third-party verification. It will also market the credits to buyers.

Agricultural carbon credits are generated through the adoption of regenerative farming practices, such as cover crops and no-till farming, which has the impact of sequestering through photosynthesis and leaving much of the carbon stored in the soil undisturbed.

Indigo Ag secured its first carbon credit acquisition commitments in October 2020 from eight buyers, including JPMorgan Chase, IBM, Barclays and Boston Consulting Group. The credits were priced at $20 per ton of carbon dioxide equivalent sequestered and abated.

“While agriculture might be a critical contributor [to climate change], the industry, specifically farmland, has the potential to become a major carbon sink,” FarmTogether CEO Artem Milinchuk told Agri Investor. “In addition to farmland’s carbon sequestration and abatement characteristics, there are strong long-term yield benefits to having carbon-rich soil.”

Milinchuk added that the practice changes required to switch farmland to a regenerative farming system can be “challenging and risky for a small farming business to do all on their own,” which is why FarmTogether has partnered with Indigo Ag.

“We’re able to align our capital with Indigo’s carbon program to accelerate the adoption of more carbon-smart farming practices on a large scale. When we see an opportunity to both increase the productivity of the land, actively fight climate change, and deliver a return to our investors, it’s a no-brainer to participate,” said Milinchuk.

The firm is working with Indigo Ag to select a pilot property, but Milinchuk was unable to provide further asset details other than clarifying that the project is likely to start this year.

“We can say that there is strong investor demand for a carbon-capture investment, so we are working hard to move forward with an Indigo-backed project as soon as possible,” he said.

The majority of FarmTogether’s existing assets will be ineligible for the Carbon by Indigo program as it is not yet compatible with permanent crops, which represent roughly 70 percent of the company’s portfolio.

“We are working with our row crop farming partners to identify farms well-suited for the carbon program,” said Milinchuk. “In addition, we’re working with our sourcing partners to identify new row crop opportunities that are a great fit for the program and the FarmTogether platform.”

FarmTogether had $100 million of assets under management as at June 2021.