Banking on Innovation
Banking on Innovation
By Laurie Stern
As director of specialized agriculture solutions for Bremer Bank, Marc Schober is not a banker himself, but a problem-solver. Schober tells Field Work he is bullish on finding ways to incentivize transitions to regenerative ag for farms of all sizes, but less sure of how exactly carbon markets will work under the Biden administration. Hosts Zach Johnson and Mitchell Hora learn how Schober decides which tech and finance solutions to recommend to farmers and the bank.
As the ninth biggest ag bank in the country, Bremer serves farmers in Wisconsin, Minnesota and North Dakota.
“I look at farm management systems, livestock management systems, any sort of data collection, soil, sensory, remote sensing, real time sensing, insurance solutions,” Schober said.
Many of the “solutions” Schober vets come from Silicon Valley.
“Nothing grinds my gears worse than a solution from a team that has never been (to the Midwest) and has no clue what spacing on corn and soybeans should be trying to tell me about a solution that that helps strawberries or blueberries or vineyards,” Schober said.
Lately he’s been trying to figure out how the Biden administration’s climate goals could translate into opportunity for farmers, especially when it comes to carbon markets.
“I think we all know that the farmers don't deliberately release carbon,” Schober said. He thinks banks may be able to help growers make the most of whatever carbon markets emerge.
“I would hate to see some sort of middleman come in there.” Schober is optimistic that carbon markets will eventually benefit farmers. But it could be tricky. “You want to make sure that you're not selling those credits for nothing … especially if you have to change equipment.”
Other trends he’s eyeing; industrial hemp, non-GMO soybeans, and consumer demand for more traceability in their packaged goods. Policy wise, he said banks have to protect their depositors and support innovation by investing cautiously and encouraging growers to take small steps as they try new crops or regenerative practices.
“Crop insurance is the first risk mitigation tool out of the box,” he said.
Here are a few of Marc Schober’s other ideas for farmers who want to minimize risk as they adopt more regenerative practices:
Find a crop insurance agent who has a direct relationship with the Risk Management Agency. “You may think (that) being a government organization RMA maybe has ears closed,” Schober said. “They actually are open to trying to improve the process and expand the program as efficiently as possible.” Schober said he hopes RMA will begin underwriting more regenerative practice in the near future.
“Be conscious of how big of a jump you're taking into the pool,” Schober said, especially if you’re growing a noninsured crop. He recommends testing it on a few acres if you don’t happen to own a back forty.
Network. Partner with a local college or university. Compare notes with your neighbors. “We're kind of all in this together,” Schober said. “If something's working on your farm, chances are the soils are similar on neighboring farms. “The whole county could benefit.”
Be aware of profitability versus yield. “Farmers are getting hounded constantly by input providers saying, ‘try this, try that, I'll give you a few gallons free, just give it a whirl,’” Schober said. It makes sense only if it’s a good return on investment. “Having cheap inputs and average yields could get a stronger bottom line than strong yields and expensive inputs.”
Make a succession plan. Schober is not a financial advisor but recommends farmers find a good one. “Try to get your ducks in a row and position your assets in a way that that can be as productive as possible,” he said. Everyone’s circumstances are different and tax laws can change.