Report: lenders paying attention to farmer conservation efforts
University of Missouri’s Center for Regenerative Agriculture Director Robert Myers says ag lenders are interested in conservation data from farmers. And some lenders have started to launch pilot programs offering farmers lower interest rates for conservation practices.
“As underwriters are evaluating the risks of the farm, they are asking if the farm is using management practices appropriate to their area. How does that come in to impact a farmer’s bottom line? As a lender, you want to know the farmer will generate enough income to repay the loan.”
Myers wrote a paper showing how conservation efforts provide a net return over time.
“When we put cover crops together with minimal soil disturbances, like no-till or strip till, that’s where we’re getting the biggest economic return, because we’re getting equipment, labor and fuel savings from not taking as many trips over the field and the cover crops are working together with the no-till to build organic matter. It also takes three years to get a return on investment for cover crops.”
Myers says it could also become more widespread for land rental rates and farmland values to be determined based on soil health and fertility. Read the full paper.