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How Farmland Funds Provide ESG Solutions and Fertile Returns

In fact, in 2021, Johnston estimates that the Varipath will capture 13,621 tons of carbon, equivalent to 2,951 vehicles, with a $681,050 implicit value. It also has satellite monitoring and farmer reporting to verify that the land is zero-till, so it can start selling carbon credits.

“We have people reaching out to us and asking about it,” he said, noting that the ranch also provides very consistent returns and is not related to traditional financial assets, so it is a good portfolio. is a diversifier, especially in volatile markets, and it provides a very good inflation hedge. Prices in Canada are also heavily discounted when adjusted for productivity.

“But beyond that, now, it’s the additional returns that Canada is developing with the Canadian Department of Agricultural Lands. The prairie has a lot of zero use – much more than any other part of the world – and carbon. till zero,” he said.

Johnson said Canadian prairie farmers are world leaders in how much land they zero in on and the fact they have been doing so for decades. Zero till means they no longer plow the fields to prepare the soil for planting. They sow seeds directly through the stubble of the previous crop, an eco-friendly practice that retains moisture and captures carbon.

Veripath, which has about 1,000 investors, is working to develop the carbon credits market and is raising capital through a memorandum of offer. So far, its funds have mainly focused on agricultural land acquisition, renting to farmers and harvesting returns. This has mainly been on the appreciation of land, which has given an annual rate of return of about 12% for 15 years without using any leverage. Now, in addition to land appreciation and rents, carbon credits would provide an additional source of return and Johnston estimated that returns could amount to another .5%.

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