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Food production accounts for one-quarter of total annual global greenhouse gas emissions.[i] However, this high carbon footprint means there’s a bigger opportunity to innovate and improve. In fact, sustainability has increasingly been a core area of focus in farmland. Although agriculture has been relatively slow to adopt digital technologies compared to, say, healthcare and financial services, this is changing. Increasingly, agriculture is applying technology to fertilization (microbial biotechnology), planting decisions (data science), and traceability & food safety (blockchain), to name just a few applications. However, there are already several “low-tech” practices in sustainable farming, such as planting diverse crops, crop rotation, planting cover crops, reducing tillage and increasing biodiversity, among others.
One of my favorite examples is planting alfalfa, a rotational crop. It is the fourth most widely grown crop and almost a permanent (i.e., perennial) crop.[ii] Alfalfa (often harvested as hay) has been an important component of sustainable agricultural systems. This crop has good water use efficiency and is well-adapted even for drought conditions. Since alfalfa is a deep-rooted crop it can acquire water from deep within the soil. Alfalfa cultivation also prevents soil erosion and improves soil structure.
Alfalfa roots can be 8–20 feet deep, much deeper than roots of annual crops, such as corn. With its ability to deposit organic matter in deep soil layers, alfalfa is useful for carbon sequestration. Research estimates carbon sequestration in the range of 345kg – 800kg CO2 equivalent/ton of hay.[iii] Carbon deposited in deeper soil layers is prevented from release back into the atmosphere, even after a rotation out of alfalfa. Alfalfa is also an important source for fixing nitrogen in the soil. An average acre of alfalfa fixes about 300 pounds of nitrogen annually, reducing the need for environmentally harmful nitrogen fertilizers.
Alfalfa is also useful for remediating environmental contamination — most famously at the “Erin Brockovich” site in Hinkley, California, where it is used to contain the spread of highly soluble and toxic Chromium-6 in groundwater. When Chromium-6-contaminated water is used to irrigate alfalfa, it is converted to Chromium-3, a plant nutrient, which is less soluble and toxic (a process known as phytofiltration).
With the recent introduction of the Growing Climate Solutions Act, a US Senate bill, alfalfa farmers may receive carbon credits from their carbon sequestration practices.[iv] Of course, such practices would also require adopting newer digital technology such as deploying sensors for measuring carbon concentration in soil. Scientists have also found that cows release less methane when the pasture includes omega-3-rich grasses such as alfalfa. Alfalfa is just one example of how farmland, through the combination of improved sustainable farming practices and newer digital technology, can provide an answer to reducing greenhouse gas emissions.
Real assets can play a vital role in institutional portfolios.
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References
1. A. Fernandez, C. Sheaffer, N. Tautges, D. Putnam, and M. Hunter, “Alfalfa, wildlife & the environment,” 2nd edition, alfalfa.org. 2019.
2. S. Orloff, D. Putnam, and K. Bali, “Drought Strategies for Alfalfa,” ANR Publication 8522, July 2015.
[i] IPCC, 2014: Climate Change 2014: Synthesis Report. 27% of food emissions come from crop production (e.g., release of nitrous oxide from the application of fertilizers). Land use accounts for 24% of food emissions (e.g., soil ploughing release trapped CO2). So more than half of the emissions are addressable by improving farming practices. However, a majority of food emissions (31%) are from livestock, mainly due to enteric fermentation (a digestive process in ruminant animals such as cattle causes methane emission). Supply chains account only for 18% of emissions (e.g., emissions from energy use in food processing, transport, packaging and retail). https://ourworldindata.org/food-ghg-emissions
[ii] Alfalfa stands typically last three to five years. Overtime a pasture needs to be renovated. See H. Aljoe, “Alfalfa Is ‘Almost Permanent’ Pasture,” Noble Research Institute, November 2006.
[iii] See M. Wiens, K. Kariyapperuma, G. M. Dias, G. Friesen, and H. Dadfar, “Life cycle assessment of alfalfa-grass hay production in Manitoba,” Agriculture and Agri-Food Canada, 2013.
[iv] E. Voegele, “Bill would help farmers, foresters participate in carbon markets,” BioMass Magazine, June 4, 2020.
This material represents the view of the author as of 7/30/2020 and is for informational or educational purposes only.