Funding Runs Out as Farmers Flock to Climate-Friendly Practices

Canadian farmers are eager to embrace carbon storage and greenhouse gas reduction programs, but some say a confused application process and lack of support hinders their access to the limited federal funding available.

In Alberta, for example, so many farmers have sought to implement beneficial management practices (BMPS) like nitrogen efficiency, cover cropping, and rotational grazing that the non-profit Results Driven Agriculture Research (RDAR)—selected by Ottawa to disburse funding from Canada’s $200-million On-Farm Climate Action Fund (OFCAF)—was forced to halt intake as it catches up on applications and assess the “remaining uncommitted funding for 2023.”

“What we’ve heard anecdotally from the [funding] delivery organizations is that OFCAF has been oversubscribed all over the country, and there are more applicants than there is money to go around for implementing these practices,” Brent Preston, board president at Farmers for Climate Solutions and farmer at the New Farm, told The Energy Mix.

Initiated in 2021 under the federal Agricultural Climate Solutions program, OFCAF is meant to support new BMPS that promote carbon storage and reduce farm emissions, while providing other benefits like improved biodiversity and soil health. OFCAF funds are distributed by 12 non-government delivery organizations like RDAR that receive and process applications from farmers.

OFCAF covers up to 85% of the cost of implementing eligible practices, such as cross-fencing and remote waterers for rotational grazing, seeding costs for cover crops, or soil sampling and development of farm-specific fertilizer plans.

“I think it’s popular because producers are eager to try new managements that help them get some advantages or benefits,” Johanna Murray, extension coordinator with Peace Country Beef and Forage Association, told Alberta Farmer Express. “They’ve been seeing their neighbours successful with rotational grazing or other different best management practices.”

So “it got them excited and intrigued when the funding came along to try to help with the substantial costs. I think people were eager to try.”

Farmer Interest Exceeds Funding

RDAR distributed more than $10 million in grants to about 600 producers in its first funding round last year. In the second application window that opened in February—and which was recently paused—more than 1,000 more applications flooded in, Alberta Farmer Express says.

Delivery organizations in other parts of Canada also report that several farmers are applying. A spokesperson for the Canola Council of Canada, which works with farmers across Alberta, Saskatchewan, and Manitoba, said there has been “strong interest” in its OFCAF-funded Canola 4R Advantage program. The council is now preparing for its second year of applications, which were expected to open in June.

In some cases, farmer interest has exceeded the available funds available. Angela Straathof, program director at the Ontario Soil and Crop Improvement Association (OSCIA), said the organization managed to fund 700 projects in its first year. More 200 of them receiving renewed funding this year, but this carry-over reduced the funds available for applications in the second round. Of the more than 1,200 applications submitted during a two-week window in January, OSCIA could only cover 400 that “best met the objectives of the program.”

“Ontario farmers have shown a tremendous level of interest in accessing funding via OFCAF,” said an OSCIA spokesperson. “The current level of funding that OSCIA was approved to administer on behalf of Agriculture and Agri Food Canada (AAFC) was not sufficient to meet the demand experienced in our second year of the program, but we are very pleased to be able to support the number of projects that we can.”

Overcoming Cost Barriers

Many farmers operate under tight profit margins, so it can often be hard for them to adopt BMPs unless there is an immediate payoff, Preston told The Mix. OFCAF funding can act as a kind of “bridge financing” that helps make the investment more feasible.

Take cover cropping, the practice of planting specific crops during the off-seasons to improve soil health, control weeds, and enhance nutrient and water management.

The technique provides numerous advantages to farmers, with the added benefit of sequestering carbon dioxide. But with a three- to five-year return on investment, “sometimes there aren’t a lot of farmers in a financial position to take that on because it takes too long to make back the money you invest,” Preston said.

OFCAF is a way to take out the risk and absorb some of the upfront costs so farmers can take on practices that are going to be beneficial for them, and for the environment, in the long term, he added.

But he added that having the program delivered by so many different organizations can make the application process confusing for farmers, who must discern between the various funding opportunities. Further complications can arise when federal and provincial programs overlap, but are not coordinated in focus areas or application processes.

“It’s often difficult for farmers to know what is available out there and what provincial or federal agency makes the most sense to apply to,” Preston said. “This problem is not unique to OFCAF, it’s a problem that faces a lot of agricultural programs.”

Navigational Support for Farmers

Historically, provincial governments delivered publicly-funded agricultural extension services that played a vital role in connecting farmers with resources, expertise, and assistance to enhance their agricultural practices. But Canada’s extension services began breaking down in the 1990s as agriculture policies shifted to favour privatization [pdf] in the sector, and government support for extension funding was drastically reduced [pdf] in the early 21^st century.

Without robust extension services, some farmers now access information through informal community networks, Preston says. Other organizations are developing alternative strategies that fill the gap—the Manitoba Forage & Grassland Association, for instance, coordinated 15 grazing mentors who can work with farmers to design grazing plans and offer advice about funding options.

But as federal and provincial governments roll out programs to address climate change, renewing support for extension services and streamlining application processes could help maximize the outcomes of farm programs like OFCAF.

“Getting the provinces and the federal government and the delivery organizations at the same table to figure out how to make this as user friendly as possible for farmers would go a long way,” said Preston.

“Rebuilding extension and knowledge sharing systems in agriculture is a very, very high priority, and helping to navigate government support programs is part of that.”