How financially regenerative is your agricultural operation?
When we talk regenerative agriculture, terms like “soil health”, “biodiversity”, and “nutrient management” take center-stage in the discussion. An equally important factor in supporting regenerative transitions is farm finance: getting the right capital in the door to transition to these better practices. At FarmRaise, we’re obsessed with demystifying farm finance. In that spirit, we’re going to share top 3 ways we’ve seen farmers successfully access and deploy capital to optimize both ecological and economic outcomes on their operations.
Start with USDA programs like EQIP and CSP
The Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP) provide a solid cost-share and financial incentive option on which to build. Yes, these cost-share programs require paperwork and certain practices and it may take a few months to receive the funding, but even so, these programs can work as a foundational infusion of seed capital to begin implementing soil health practices or upgrading outdated energy systems. Plus, you can get technical assistance as part of the package, not to mention the possibility of layering local Soil and Water Conservation District funding on top of your USDA grant. For insider tips on optimizing your EQIP application, see this.
Access innovative capital
From Farm Service Agency Conservation Loans to Mad Agriculture’s Perennial Fund to Community Development Financial Institutions, there are billions of dollars in private capital available for on-farm conservation practices. Accessing these private investors isn’t always easy, but platforms like Harvest Returns and Steward are intriguing ways to “crowd-farm” capital. FarmRaise also works with farmers to connect them with private funders that fit their operation’s needs.
Know your numbers
Don’t leave your balance sheet and cash flow statement to your accountant. Managing your funds proactively to anticipate your cash flow throughout the year starts with using a streamlined accounting system and making a habit of updating these numbers weekly. If you haven’t had a chance yet, taking a small business or farm finance course is a good way to brush up on your business skills and get into the habit of financial planning.
The bottom line: finance is a crucial part of the regenerative equation. Access USDA funding, look for private capital (if you need it), and plan head to build resilience directly into your business.