Editor's Note: This segment is from the latest episode of On the Record.
On June 11, Compeer Financial announced it was teaming up with PepsiCo and other industry partners to offer a pilot leasing program for strip-till equipment, helping offset upfront financial costs for farmers implementing soil conservation practices on their farms.
We caught up with Landon Frye with Compeer’s New Markets department to learn more about the initiative.
“Yeah, over the past 10 months, PepsiCo and Compeer Financial have worked on a pilot program to deploy their regenerative capital and they make all kinds of investments across US agriculture, but to deploy a specific test where the incentive was tied to the financing of the equipment and we really honed them in on strip tillage specifically. One, it allows for their environmental practices to be measured and managed and meets those standards that they have. But two, and in our research and probably reading some of the things that you guys put out, there was a lot of demand for it organically for farmers via lower inputs, via fewer passes over the field. And that pairing of a technology farmers are chomping at the bid at, so to speak, with something that aligns with what food companies want to achieve, felt like the right place to deploy a million dollars is their initial, we're calling it a pilot, a limited test, a let's prove if this is something that will gain traction and works for everybody and as a win-win-win for both PepsiCo, the farmer and Compeer Financial.”
“And we launched that last Thursday, just announced the fact that we had created this pilot together and we're deploying it primarily in the Central Midwest and have had great traction here even in the first couple days of talking about it publicly.”
Through RegenLend, Compeer Financial will lease the equipment to farmers, and PepsiCo will cover two annual lease payments to share the cost of investment with farmers. Strip-till equipment can get expensive and can be a limiting factor in a farmer’s decision to move to strip-till. But, this program helps lower that cost, Frye says.
“We believe so. We conducted several surveys and tried to understand as best we could what the market would really take seriously and would defray and reduce the cost of some of these investments. But to launch a pilot in a reasonable timeframe, some of it has to operate off the gut. And we just felt that the high price tag for strip tillage was another attribute that reducing the cost of it by 35% would certainly not bring it down to being cheap by any measure, but would have a lot of interest and pull.”
In its initial pilot year, the RegenLend program is available to farmers interested in leasing strip-till equipment to implement soil conservation practices on at least 600 acres.
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