New Loan Program Connects Ag Financial Performance with Environmental Conservation

The Environmental Defense Fund is partnering with Farmers Business Network, an agricultural technology and finance company, on one of the first U.S. farm loans to provide farmers who meet climate and water quality standards with lower interest rates and agronomic insights to improve the on-farm benefits of conservation.

FBN’s $25 million pilot Regenerative Agriculture Finance Fund is enrolling 30-40 farmers growing a combination of corn, soybeans and/or wheat. FBN is recruiting participants from its network of more than 33,000 farmer members and plans to prove the concept and expand in the next several years and will connect data on farm environmental performance with the financial performance of the fund. RAFF credit lines will replace traditional operating loans with a one-year line of credit that includes a 0.5% discount from a farmer’s base rate. To qualify, farmers must meet environmental eligibility requirements developed by EDF and backed by peer-reviewed scientific research, including nitrogen management and soil conservation standards.

“This fund [connects]the environmental and financial performance of farms and integrating the proven value of practices that reduce climate impacts and improve water quality into farm financing,” said Maggie Monast, senior director of climate-smart agriculture at EDF. “The results of the pilot should allow FBN to make the case for rewarding farmers for environmental performance through their financing, at scale.”