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Fund Aims to Promote Sustainable Farming Through Financial Perks

Spencer Pugh

Anyone who owns a farm can tell you there are easier ways to earn a living. An analysis conducted last decade by the USDA showed that less than half of the farms in the United States were even profitable, partly because decades of soil erosion caused by massive factory farms have left much of the nation’s farmland less fertile and productive.

Photo Courtesy Zoe Schaeffer 

Easier access to money can help solve the problem of profitability by allowing farmers to invest in tools and processes to improve crop yields. But the problem of soil erosion can only be solved through more eco-friendly agricultural practices. A fund from agriculture technology firm Farmers Business Network (FBN) and the nonprofit Environmental Defense Fund (EDF) aims to tackle both problems by giving farmers financial incentives to adopt more sustainable growing methods.

The $25 million FBN Regenerative Agriculture Finance Fund (RAFF) provides 30 to 40 farmers with one-year lines of credit of up to $5 million and lower-than-normal rates and fees. Farmers will also receive agronomic insights to optimize the on-farm benefits of regenerative practices.

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.

“Regenerative practices can benefit farmers in many ways — through improved soil health, lower fertilizer costs, and resilient crop yields,” Steele Lorenz, FBN’s head of sustainable business, said in a press release. “This new operating line will help make practice adoption more economically feasible [and make] regenerative agriculture far more accessible to growers across the country.”

The fund is currently enrolling farmers who grow a combination of corn, soybeans, and wheat. FBN wants to scale the fund to $500 million over three years. Farmers can use the company’s platform to help them decide which practices will work best for specific farms and crops. Farmers who enroll have access to a formidable team of agriculture experts. 

FBN is an independent ag tech platform and farmer-to-farmer network with a mission to help farmers worldwide earn a decent living while working toward a sustainable future. Its members farm over 81 million acres in the U.S., Canada, and Australia.

The EDF links science, economics, law, and private-sector partnerships to create solutions to serious environmental problems. It boasts more than 2.5 million members and offices in the U.S., China, Mexico, Indonesia, and the European Union.

The two organizations’ new fund comes at a time when the agriculture industry is under increasing pressure to adopt more sustainable techniques. The EDF notes that row crop agriculture contributes 5% of greenhouse gas emissions from the United States. It is also the largest emitter of nitrous oxide, which has 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 by optimizing currently available technology. That figure could rise as high as 71% through additional innovation.

To maximize sustainability, the agriculture industry must also shift away from chemical fertilizers that harm the soil, require large amounts of energy to produce, and run off into rivers, streams, and watersheds.

The main problem is that the alternative to synthetic fertilizers – organic farming – can be more expensive and less productive, at least in the short term. But that problem eases over time, experts say.

Photo Courtesy Jed Owen

“What we’ve seen is as farmers improve the health of their soil, they’re improving organic matter, then they don’t need as much fertilizer,” Maggie Monast, EDF’s senior director of climate-smart agriculture, shared.

Healthy soil also protects crops from variable rainfall. The upshot is that over the long term, sustainable farming can help reduce costs and risks while protecting the land’s long-term value. 

“This fund is a giant leap forward in connecting 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, EDF’s senior director of climate-smart agriculture.

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