Lender perceptions and actions on conservation agriculture

Agricultural lenders play a crucial role in supporting farmers’ financial decisions, including implementing conservation practices. Understanding lenders’ conservation knowledge and challenges can inform how lending institution executives can help them support farmers in conservation decisions.

This survey was conducted by EDF, University of Wisconsin-Madison Division of Extension, University of Minnesota Water Resources Center and Compeer Financial, involving 179 loan officers in the upper Midwest states of Illinois, Iowa, Minnesota and Wisconsin.

Key report findings

• Fifty-one percent of loan officers said that conservation agriculture is very or extremely important to them personally and 59% believe it is very or extremely environmentally beneficial. Forty percent are actively financing conservation practices or equipment for at least one client.
• Loan officers face multiple challenges in supporting their borrowers’ investments in conservation agriculture, including having limited knowledge about the economics of conservation practices.
  • 42% lack knowledge about the financial costs and benefits of conservation investments.
  • Only 15% of loan officers think they are very or extremely knowledgeable about the financial impacts of conservation agriculture, and 44% feel moderately knowledgeable.
• Loan officers need information about conservation practices from trusted sources to better support their clients’ investments.
  • 86% of the survey respondents believe that having information on the financial implications of conservation practices would enable them to better support their farmer borrowers interested in these practices.
  • The most trusted sources of information include local producers with first-hand experiences, university extension services and researchers, USDA NRCS, and local conservation staff.