Podcast: Debbie Reed – Translating Consumer Preferences to Farmer OpportunitiesBy SHP Staff on Tuesday, 28 July, 2020
The Ecosystems Services Market Consortium (ESMC) is a market designed to sell carbon, water quality and water quantity credits for the agriculture sector. Debbie Reed is the executive director of the ESMC, and she’s had a long career in Washington, DC in food and agriculture.
Debbie studied human nutrition and dietetics landing her a job with the U.S. Department of Agriculture. But her appreciation for production agriculture grew, and later she became involved in how agriculture can mitigate climate change. Now, under Reed’s leadership, the ESMC considers agriculture an incredibly important component of natural resource preservation and enhancement in our country and helps farmers capitalize on their environmental investments.
“The interest from consumers right now is on climate change, climate change mitigation, and that translates into carbon and greenhouse gases. So, what is the carbon and greenhouse gas impact of food production and agricultural production? We [ESMC] track soil carbon, net greenhouse gases, water quality and water quantity, but we will be adding additional components such as biodiversity. That's another ecosystem service benefit that agriculture truly impacts in terms of its focus on agricultural lands and working lands,” Reed said.
She is working hard to perfect the infrastructure of the ESMC marketplace right now. She describes it as “kicking the tires.” The process includes gathering feedback from the farmers and ranchers that will supply ecosystem credits and from the corporations that will purchase the credits.
“We hear the voices of all those particular members as we test, as we refine and perfect the system. And our plan is to launch as a fully functioning market in 2022,” said Reed. “The beauty of our system is that we know that there is demand from our members at the table in purchasing those credits at the end of the system. So we're trying to take the signals we're getting from society, from these corporations and turn them into opportunities for farmers and ranchers to just engage in the system and we take on the work of the quantification, if you will.”
Reed describes what it might look like for a farmer or rancher to enroll and participate in the ESMC in the podcast available below.
Host: John Mesko
Guest: Debbie Reed, executive director of the Ecosystems Services Market Consortium
John Mesko (00:30):
Hi. I'm John Mesko and welcome to another episode of The People of Soil Health. The goal of the Ecosystems Services Market Consortium, or ESMC, is to launch a fully functioning national scale ecosystem services market conceived and designed to sell both carbon and water quality and quantity credits for the agricultural sector by 2022. This effort is led by Debbie Reed, the executive director of ESMC who joins me today. Thanks Debbie for being on the podcast.
Debbie Reed (01:05):
Thanks for inviting me John. Nice to be here.
John Mesko (01:08):
You're welcome and I'm really excited about today's topic because it is really central to the work that we do at the Soil Health Partnership. It's critical to advancing, as you know, some of the farming practices that we're evaluating and promote, but really I'm interested in learning more about how you got into this work. I know that your career in Washington, D.C. is over 20 years and you've been working in agriculture and environmental policy. And for the listeners on the podcast who are interested in learning more about the partnerships that we have, I'm curious, what prompted you to enter this career field?
Debbie Reed (01:48):
Yeah. Thanks for asking. It's actually May marked my 35th year here in Washington, D.C. I don't put up all of my background, so I've been here for a while. So my background in training is actually human nutrition and dietetics. And when I started my career in Washington, I was first working at the National Institutes Of Health, but ended up at the department of agriculture, which has responsibility for all federal human nutrition research. And I was very interested in that work, but I found while I was working at the Agricultural Research Service, which is where all of those functions and authorities reside, that production agriculture was far more fascinating to me than actual consumption if you will, when you think about nutrition, and I migrated over to working on the production side.
Debbie Reed (02:41):
So since early in my career, I've been working on things like agricultural technology, as well as the role, if you will, in production agriculture, that links back to nutrition. But eventually, over some time, I ended up working in the Senate and then in the White House. One of the first roles I had in the Senate when I was working for Bob Kerrey from Nebraska was working not just on Endangered Species Act, but climate change because at the time, we were negotiating some provisions of the framework convention on climate change.
Debbie Reed (03:16):
And that was back in the late nineties and I've been working on ag and climate change since then, really just the entire opportunity set, if you will, that agriculture brings to climate change mitigation, but the need for us to better understand how to actually measure greenhouse gases within agriculture as well as what are the opportunities set to mitigate it. So since the late nineties, I've been pretty much focused on climate change.
Debbie Reed (03:44):
And then increasingly over time, what I realized is that much of the activities that reduce greenhouse gas emissions or increase a little carbon in agriculture also have beneficial impacts on things like water quality, air quality, water use. So over time, I migrated into just ecosystem services and how agriculture is just an incredibly important component of natural resource preservation and enhancement in our country.
John Mesko (04:15):
I think you've really summed up a lot of my thoughts on the value of agriculture. It's so true. The connection between production agriculture and nutrition, that is lost on most of our society and it's a tremendously powerful connection that affects every single person every single day and it's easy to lose sight of that. But I love how your career has even arched to include the beneficial impacts of agriculture on the environment. We in agriculture are, or have been for many years, under the gun to defend our activity. And in reality, there's potential for our activity to be beneficial.
Debbie Reed (04:55):
Yeah, that's exactly right and I think that part of the conversation has been a missed part of the conversation for so long. And yet, really when I started this focus, it was because of that. It was because what we quickly figured out with the group of senators and staff I was working with with Bob Kerrey, what we quickly figured out was that agriculture is an essential component of all of, at that time we were focused on treaties that we've been negotiating. Agriculture is an important component of that and yet often just not brought into the discussion.
Debbie Reed (05:31):
So when I worked for Bob Kerrey, what he was really focused on was bringing agriculture into the part of the conversation. So we did direct outreach to the sector as well as to the White House and the State Department. And it really launched an effort that, again, I have taken on pretty much as a career change, and the effort was, in fact, recognize agriculture can do but also recognize that you have to have the sector at the table as part of the discussions from the very beginning. Quite often, we focus on negotiations, if you will, whether it's climate change or other things and then agriculture is brought in after the policies are developed, after the groundwork is laid and that's really not the right way to do this.
Debbie Reed (06:22):
So a lot of what I'm doing right now in ESMC is based on those learnings. We have to have the agricultural sector at the table. We have to recognize the beneficial impacts and opportunities of production agriculture, but we also have to recognize that agriculture is a business and it is a business in this country that is led by over two million independent business operators. So we have to recognize that farmers and ranchers farm and ranch first and foremost. And other activities or benefits that we seek from them, we have to fit into that ability for them to farm and ranch first and then to build on these additional components as a part of what they're doing, and that focus also is often lost.
John Mesko (07:15):
Well, that's so true and it's interesting that we're having this conversation because just within the last week, I was in a conversation with a number of farmers that we work with at Soil Health Partnership through our association with the National Corn Growers, and we were talking about all the different things that farmers are interested in terms of things like ethanol and the alternative uses for corn and how do we create a place for the corn that we produce in this country to go so that farmers have a predictable market into the future. And one of the things that I brought up is this whole notion of ecosystem services and I reminded the group that farmers and ranchers in the United States actually provide ecosystem services and there is a value to them. And that is something that going forward, we need to continually have in front of us as groups that work with farmers to promote those services and begin to gain an understanding of how farmers can benefit from their work in that area.
John Mesko (08:15):
And the question that I got back from a couple of farmers in the group was, "Well, this whole idea of ecosystem services, I'm not even completely sure what that means. I'm not sure that I understand what ecosystem services are." And it struck me that I've been in meetings with you and the ESMC on a number of occasions over the last year and we talk about this all the time, but there are farmers out there that are curious of this and maybe haven't really considered the value of ecosystem services and I'm looking for a working definition. I think, as I said, we know that internally, but for those members that are listening, how would you define ecosystem services in relation to how farming practices impact that?
Debbie Reed (09:06):
Yeah. It's a very good question and one we probably need to do a better job describing. So I would say two things about that. One is I think farmers and ranchers are such stewards of the land that to them, it's part of what they already do. So when we say, "Oh, you are generating ecosystem services that benefit society," I think we perhaps are just simply putting a different label on it than what they're used to. So for them, ensuring that we actually have healthy soils that improve soil fertility, soil health productivity is a part of what they do. It's part of their stewardship.
Debbie Reed (09:51):
But for us, we are now focused both as a society, coming from consumers and particularly with millennials who really want to know how is my food grown? What is the associated environmental impacts associated with the products that I'm buying? Corporations, feeling this pressure from consumers, are also seeking to know how is that food that I purchase or the product that goes into the food that I produce develop? And so when we talk about those provisions, how is food produced? What are the environmental impacts? That's really what we're talking about.
Debbie Reed (10:27):
The interest from consumers right now is on climate change, climate change mitigation, and that translates into carbon and greenhouse gases. So what is the carbon and greenhouse gas impact of food production and agricultural production? So that's one thing, but as I mentioned at the start, impacts on natural resources and water use, water quality are also part of that entire package of ecosystem services from agriculture. So we often talk about soil health, but really soil health is this little biology that carbon content, which improves water holding capacity and improves soil fertility, soil health, soil structure, all of them are part of what we're talking about.
Debbie Reed (11:13):
We define it right now within the ecosystem service market, as the provisions that we can quantify and that we know there's high demand for from corporations, from society. So we track soil carbon, net greenhouse gases, water quality and water quantity, but we will be adding additional components such as biodiversity. That's another ecosystem service benefit that agriculture truly impacts in terms of its focus on agricultural lands and working lands.
Debbie Reed (11:46):
So it's really any suite of services that have beneficial impacts to society. We don't often focus on things like recreation, but there are recreational opportunities as well. It's not part of what we're focusing on yet, but that's also an ecosystem service impact of agriculture.
John Mesko (12:11):
Well, it's very true and the work we do in the soil health component, you mentioned that that's the groundwork. That's the foundation of how we understand and many of these ecosystem services stem from improvements in the soil health that we're undertaking when we do things like add cover crops or expand the rotation that a farmer is using. And when we talk about that, that brings in biodiversities.
Debbie Reed (12:32):
Yes, that's exactly right. So one of the things we seek to do is to both recognize that and reward it because it is a demand that we are now placing on the agricultural sector. And again, it's not necessarily different than what agriculture has been doing, but ESMC really seeks to create the tools for agriculture to engage in that discussion with society. We shouldn't require farmers and ranchers to measure their impacts. We should help them understand what their impacts are. We should measure that and then help translate that into how their systems approaches on the landscape impact that and give them the tools to continuously improve.
Debbie Reed (13:20):
So that's really what we're focused on. We're really desirous of the impacts that agriculture can have and of providing the tools that the sector can just plug into and engage and understand where their role is or what their role is and we provide the translational opportunity, if you will.
John Mesko (13:43):
Yes. It's much needed infrastructure to make this fit for farmers and for the ag community, and I think it's fantastic and certainly been great to be involved in it. One thing that I want to ask you about is that the tagline or the approach that the Ecosystem Services Market Consortium has is "Growing Resilience in Agriculture". And I'm curious how resilient you had to become in developing this, not only this market, but the whole organization and the process for bringing people together to build this market.
Debbie Reed (14:21):
Yeah. That's a good question. So interesting, how resilient I've had to become. Well, so going back even to the nineties, I found myself in a role of really bringing people together first in the Senate. Bringing staff and members together and saying, "Here's an opportunity set that we need to educate members about, we need to educate the administration about, and we need to educate the international community about." And so I found myself just in that role of creating a consortium, and literally, almost everything I've done since then has in fact been creating consortiums and collaborations because I saw at the time that was the quickest way to progress, is that educational collaborative component.
Debbie Reed (15:18):
When I started working in carbon markets more deliberately where I was running an organization called the Coalition On Agricultural Greenhouse Gases, we created another, it was a national stakeholder coalition in which we were focused on developing the tools, the technologies, figuring out how to better measure carbon and greenhouse gases in agriculture. I found also that there was no community for that discussion to happen, and we created quite a community and quite a hub of action and understanding and learning. And while our coalition itself, we didn't necessarily create any new tools or programs, we built capacity across multiple organizations, including policymakers at the federal and state level. We did a lot of work in California. We really built capacity and learning and understanding. And from all of those opportunities, I have learned that one way to actually build resilience, not only for myself, but in this consortium endeavor, if you will, that I'm building, is through collaboration.
Debbie Reed (16:26):
And so when we started designing an ecosystem service market for agriculture, we worked first on some underpinnings. We first got an organization to do an assessment of us, of what are the market opportunities. We looked at what is the supply side opportunities across the landscape from agriculture? And then we designed a market. We designed protocols. And then the first thing we did after we had those underpinnings was we started this member-based consortium and brought everyone to the table because that is how we will make the most progress. That is how we will be able to develop a market, develop a system that works for everyone.
Debbie Reed (17:08):
And so for me, that is an essential component of resilience, is building capacity, building the opportunity to learn from each other and to test the system as we go, rather than creating it, and then putting it out and saying, "How does this work for everyone?"
John Mesko (17:26):
Right. Right. I think you're absolutely right and as someone who's participated in the consortium, I can tell you that I think those of us that work in this arena sense that and feel that and understand that this is the right way to go about this. And so I commend you and the group for carrying on in this fashion. But tell us, tell us more about the ESMC. So who's involved and how is the market being designed right now?
Debbie Reed (17:55):
Yes. I'm glad you asked that. So the consortium is a membership based organization right now. We specifically reached out to members from across the agricultural supply chain and value chain to participate. So we have grower groups such as National Corn Growers Association, American Soy Association, National Cattlemen's Beef Association, but we also have major corporations for whom agriculture is a important part of their supply chain. So organizations such as General Mills, ADM, Bunge, Cargill, Nestle, Mars, Danone - North America.
Debbie Reed (18:36):
And then we have environmental groups who are important stakeholders for whom the outcomes, the impacts that we are seeking are also the same things they're seeking. So World Wildlife Fund, The Nature Conservancy, for instance. And then we have a lot of research-based organizations, land grant universities, like Cornell, Arizona State University. And we have aligned around investing jointly in building the infrastructure and ensuring that our protocols are science-based, standards-based, are certified by global certifiers.
Debbie Reed (19:13):
So what we're doing right now is we're pilot testing the entire system. I like to say that we're kicking the tires. We're getting feedback from everyone. Is this infrastructure we're building the right infrastructure? Will it meet the needs of suppliers who are the farmers and ranchers in this market? And will it meet the needs of buyers such as corporations, not only within the food and agriculture supply chain, but external buyers, such as the oil and gas industry and others who are interested in what I call these highly charismatic credits that we can generate from the agricultural sector, not only looking again at carbon and greenhouse gases, but water and over time, biodiversity.
Debbie Reed (19:57):
So we specifically try to engage all of the potential elements of a market to ensure that stakeholder needs, buyer needs, supplier needs are being met, and that we hear the voices of all of those particular members as we test, as we refine and perfect the system. And then our plan is to launch as a fully functioning market in 2022.
John Mesko (20:28):
That's an aggressive goal and it sounds like you've laid down the foundation to achieve it and that's very commendable. And I'm curious, as I said earlier, in working with a number of farmers, some are very well aware of the work that you're doing while other farmers are not well versed in the whole language around resiliency or ecosystem services. Can you give us, certainly I know the market is under development. I know that there's a lot of unanswered questions and that's the whole purpose of what you're doing is in bringing these partners together. But can you give us just a perspective on for somebody who's just thinking about this for the first time, in the future, as we bring this market online, what are some ways that a farmer might benefit from or engage with this market? Just a for instance, or an example that you might share with us?
Debbie Reed (21:22):
Yeah. A for instance is maybe reflective of how we're engaging our pilot project. So most of the pilots have been jump-started, if you will, by our members, whether they're corporations or their Nature Conservancy, for instance. They come to us and they say, "We're working in this particular area or region of the country with a certain natural resource concern and we would like to start a pilot and engage producers in that area and test out the entire approach that you have." So what we do is we develop the pilot with that member. We basically will enroll producers in our system and that means bringing them through a technical assistance period, if you will, that's it's not necessarily long. We just explain what is our market? What does it mean to participate in our market? What is the potential advantage and benefit of your participating? And then we enroll them.
Debbie Reed (22:26):
So we collect certain data that we require for the marketplace. And generally, what we do is we indicate to them, "So in your production system, in your region, here's a suite of systems based approaches or practices and activities that we know will help to improve soil carbon sequestration or improve water quality." We don't have a recipe or a requirement for what a producer needs to do. You simply say, "These are things that are known to help move the needle or change the needle, if you will, in these elements ecosystem services that we are helping to quantify. And the more of these things that you do, the more likely you are to generate credits."
So when we enroll a farmer or rancher, we say, "This is what your baseline condition looks like. This is your sole carbon content. This is your water quality." And then year over year, we will actually measure changes in that so that a producer who takes on more changes and more system elements designed to move the needle, if you will, in their systems, they're more likely to generate credits and more credits on their farm or on their ranch and will get paid more year over year. So we basically tell them what is the signal we're looking for, what are the things you could do, and then they elect to do as many or as few as they elect to do. We quantify the impacts of those changes on their farm or ranch. And then we will verify, and then certify those changes, working with a global certifier and generate credits, and then sell them.
Debbie Reed (24:09):
The beauty of our system is that we know that there is demand from our members at the table in purchasing those credits at the end of the system. So we're trying to take the signals we're getting from society, from these corporations and turn them into easy opportunities, not necessarily easy, maybe that's not the right word, but opportunities for farmers and ranchers to just engage in the system and we take on the work of the quantification, if you will.
John Mesko (24:41):
I'm sure that as that develops, there's going to be a lot of interest from the ag community and engaging with this. Once the market is up and running, what comes after that? Are there longterm goals that ESMC has beyond 2022?
Debbie Reed (24:54):
Yes actually, we do. One of the first things we did was develop a business plan that is in fact a longterm business plan. As a nonprofit, what we're seeking to do is actually continuously improve the system and evolve so that as we see a new signal, a new market signal, whether it's from corporations, whether it's from consumers, if it is something we can quantify and monetize in terms of agricultural practice or agricultural impacts, we will do that.
Debbie Reed (25:30):
So we've already heard from our members. I mentioned that biodiversity is very important. So we have already been working somewhat on what are biodiversity indicators that we can build into a market, things like bioacoustics, tracking wildlife, both above and below ground. So we're cognizant of that, but I'm confident that in the future, it will be additional market signals that come up new demand that is desired, and we are committed to just ensuring that we can accommodate that and make it part of our programmatic offerings.
Debbie Reed (26:08):
The other thing we're committed to doing is to continuously improve technology and make this more scalable and more cost effective. So that over time, we can drop our costs of quantifying the assets and of verifying the assets so that more and more of the actual payment goes to the farmers. So if we become more efficient, the system becomes more efficient. More of the money can flow towards the farmers and ranchers who are really the ones undertaking the practices and the practice changes that are creating these assets.
Debbie Reed (26:44):
So our longterm goal is keep our eye on the demand, keep our eye on the prize, really work with farmers and ranchers to improve their opportunity set and that financial statement going back to them.
John Mesko (26:59):
Well Debbie, as somebody who's been working with farmers for close to 30 years in helping them maximize the return from their efforts and helping them be recognized for their skill and their input into questions just like this, I really appreciate everything that you're doing to bring this together. Been really helpful for me and I think it will be helpful for the folks that listen to this podcast to learn more about Ecosystem Services Market Consortium, and your work. And I hope that as we get into 2021 and 2022, we can have you back for an update, because I think this is very exciting and I'm really interested in the potential that's held out here for us.
Debbie Reed (27:45):
Thanks John. I'd be delighted to come back and do a followup in the future, and I really appreciate the opportunity to have the discussion with you.
John Mesko (27:53):
That's great. Well, thank you so much Debbie. Take care.
Debbie Reed (27:56):
Thank you. All right. Bye.