Farmers Business Network and Environmental Defense Fund Announce Major Expansion of Regenerative Ag Operating Lines, Incentivizing Farmers to Implement Regenerative Ag Practices

(OMAHA, NE) Farmers Business Network (FBN^®), the global AgTech platform and farmer-to-farmer network, together with Environmental Defense Fund today announced the Regenerative Agriculture Financing (RAF) program, offered through FBN Finance, LLC, will double in size to $50 million in operating lines for the coming season and anticipates originating up to $1 billion in climate-smart operating lines over the next five years. The RAF, which incentivizes farmers who meet climate and soil health benchmarks with lower operating line interest rates, was launched as a $25 million pilot in 2022.

FBN and EDF made the announcement at Farmer2Farmer VI, FBN’s global conference dedicated to bringing thousands of farmers and ranchers together to share their experiences and access the year’s most significant innovations from agronomy, technology, and fintech to help them drive profit potential across their operations.

Last January FBN and EDF announced the launch of the $25 million RAF pilot program with the aim of providing 50 farmers with seasonal lines of credit of up to $5 million. The program quickly became the fastest-selling financial product FBN has ever launched, selling out in just three weeks. Enrollment for the 2023 growing season begins today, with over 20 farmers already on the waitlist and just 50 spots available.

“FBN Finance continues to innovate to bring the best rates and novel products to farmers with the easiest process,” said Dan English,GM FBN Finance. RAF is a perfect example of that mission in action: creating new ways to add value to the farm – and in this case for the environment as well – with new technology. Our goal now is to scale the program rapidly to bring this to as many growers as we can.”

FBN estimates that farmers representing $13 billion of the $60 billion annual operating line of credit market meet RAF eligibility today.

“Connecting data on the environmental and financial performance of farms is essential to integrate 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 high level of farmer interest in the pilot shows that programs designed to reward farmers for environmental performance through their financing can succeed at scale.”

The RAF was one of the first U.S. agricultural financing programs to incentivize farmers who meet soil health and nitrogen efficiency standards through access to lower rates and fees, as well as agronomic insights to optimize the on-farm benefits of regenerative practices.

How it works         

RAF credit lines replace traditional operating lines with a seasonal 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.

FBN’s Gradable® platform enables data collection at scale with proprietary technology and will validate regenerative farming practices through its sophisticated analysis techniques. Farmers will input data into FBN’s Gradable(R) platform, which also provides farmers with agronomic guidance to optimize farm production choices. Farmers must agree to provide production data for all enrolled fields for at least three crop years, but do not need to demonstrate a new practice to qualify. This means that farmers who have already invested in regenerative practices such as no-till, cover crops and optimized fertilizer use can participate.

Environmental Defense Fund provides oversight related to the environmental criteria required for RAF eligibility. The criteria are designed to be inclusive of farmers who grow corn, soy and wheat in a variety of geographies and who implement a variety of regenerative practices, while establishing a clear system for monitoring those practices and environmental outcomes, as well as measuring the success of novel financial incentives in the farm finance space.

Row crop agriculture contributes 5% of greenhouse gas emissions from the United States and is the largest emitter of nitrous oxide, a potent gas with 300 times the warming potential of carbon dioxide. Scientists estimate that a 21% reduction in row crop emissions is possible in the next 15 years through optimization of currently available technology, and up to a 71% reduction could be achieved through additional innovation.^[1]

Agriculture is one of the most vulnerable sectors to climate change. Regenerative agriculture practices provide an excellent opportunity for farms to build healthy soils which can protect crops from variable rainfall.^[2] Taken together, practices that build soil health and reduce farm inputs have been shown to reduce farm costs and risks while protecting the long-term value of the land.^[3]

With the expansion of RAF, FBN will continue to connect environmental outcomes with the financial performance of the program, creating insights into the relationship between regenerative practices and farm risk and creditworthiness. RAF also provides financial institutions with a new investment opportunity with the potential to scale across millions of acres.

^[1]  Northrup, Daniel L., Basso, Bruno, Wang, Michael Q., Morgan, Cristine L. S., Benfey,  Philip N. Novel technologies for emission reduction complement conservation agriculture to achieve negative emissions from row-crop production. https://doi.org/10.1073/pnas.2022666118.

^[2] Kane, Daniel A., Mark A. Bradford, Emma Fuller, Emily E. Oldfield, and Stephen A. Wood. "Soil Organic Matter Protects Us Maize Yields and Lowers Crop Insurance Payouts under Drought." Environmental Research Letters 16, no. 4 (2021/03/16 2021): 044018. https://doi.org/10.1088/1748-9326/abe492.

^[3] Environmental Defense Fund, KCoe Isom, and Soil Health Partnership. 2021. Conservation's Impact on the Farm Bottom Line. Retrieved from: https://business.edf.org/files/Conservation-Impact-On-Farm-Bottom-Line-2021.pdf