A new survey of agricultural lenders in the upper Midwest reveals important insights about their perceptions and support for farmers’ conservation efforts. As the first of its kind, the survey can inform agricultural lending institutions’ climate and sustainability strategy development.
Farmers rely on agricultural lending institutions for loans to cover equipment, land and operating expenses. In particular, loan officers at these institutions hold relationships with farmers and are often seen as trusted advisers and sources of information. Their perspectives and knowledge of conservation agriculture can significantly influence farmers’ progress in adopting conservation practices.
179 loan officers participated in this survey across the states of Minnesota, Wisconsin, Iowa and Illinois. Fifty-one percent of the surveyed loan officers said that agricultural conservation is very or extremely important to them personally, and 59% believe it is very or extremely environmentally beneficial. Despite this, many loan officers face challenges supporting their farmer clients’ conservation investments. This is where the support of executives at agricultural financial institutions becomes essential.
Drawing from the firsthand insights obtained from the survey of loan officers conducted by EDF, University of Wisconsin-Madison Division of Extension, University of Minnesota Water Resources Center and Compeer Financial, here are the specific actions executives at agricultural finance institutions can take to support conservation investments.
Provide educational opportunities on conservation for loan officers.
A key challenge hindering loan officers in supporting their clients’ conservation efforts is a lack of knowledge about the financial implications of conservation practices. Forty-two percent of the respondents identified a lack of knowledge about the financial costs and benefits of conservation investments as a significant barrier in supporting clients who want to include conservation practices in their loan proposals. Only 15% of the surveyed loan officers consider themselves very or extremely knowledgeable about the financial impacts of conservation practices, and 44% feel moderately knowledgeable.
To address loan officers’ knowledge gaps, leadership at agricultural finance institutions should provide targeted education and training on the financial impacts of conservation. These programs can be developed by engaging with trusted partners such as local producers with first-hand experience implementing conservation practices, university extension services and researchers, conservation professionals and relevant government agencies. The Conservation Economics & Finance Resource Hub developed by the authors of this survey offers a valuable resource for creating these training programs.
Click here to read more edf.org
Photo Credit: gettyimages-pra-chid
Categories: Minnesota, Business