Farmers Differentiating Themselves through Sustainable Farming

After my freshman year of college, I had the opportunity to intern for Agren, an agriculture and environmental consulting firm located in Carroll, Iowa. My major project that summer was working on a campaign to connect conservation farmers with absentee landowners.  An absentee landowner is a person who rents out the land they own instead of farming it themselves. The basic idea is to use the market place to get conservation farmers to increase the size of their operation.  

Recently I interviewed my former supervisor, Jamie Ridgely, to find out more about their progress with this project. I was impressed with how Agren is using the marketplace to promote conservation.  

How much land in Iowa is rented out from absentee landowners?

Jamie: Roughly 60% of Iowa land is farmed by someone other than the person who owns it. 

Do you think responsible farming is important to absentee landowners? Why?

Jamie: All of our survey data supports that absentee landowners feel that responsible farming is important, and it is part of what they consider when they choose a farmer to rent their land. But what we often find is that absentee landowners don’t know what good conservation is, or they're very unsure about how their land impacts the water quality, soil quality, and environment. And so consequently, if they don’t know what good conservation is, then there is not differentiation between farmers who may want to rent the land.  Therefore the farmer willing to pay the most gets to rent the land.    

How can farmers use responsible farming practices to obtain more land? Do sustainable farming practices affect how much land farmers can rent from absentee landowners?

Jamie: Well, we think that sustainable farming practices should help farmers when renting more land. We have been doing some projects to try to understand whether or not farmers can differentiate themselves from their peers.  Of course, these farmers must actively market their conservation expertise to differentiate themselves just like any other company must do. If we can help conservation farmers more successfully market themselves, then yes, I do think we can help farmers who are operating in an environmentally responsible manner to rent more land from absentee landowners. So our goal is to market a farmer’s conservation ethic to absentee landowners who want their land farmed in a more sustainable way. We haven’t actually gotten to the point where we have made a match yet.  However, our survey of absentee landowners indicate this is a more important factor when they are choosing a farmer to rent their land.  So, we think that it is a viable concept, but we really haven’t had the opportunity to work long enough with the two groups to actually see the concept potential. 

To clarify, operators are renters farming the land?

Jamie: Yes. In order to increase your crop operation, farmers need to rent more land or buy more land. Really, most people increase the size of their operation by renting more land.

Since crops are a commodity, especially for Iowa grain farmers, how can a farmer benefit by differentiating themselves as a conservation farmer?  In other words, how can farmers benefit by being conservation minded if they don’t get paid extra for a bushel of corn that is raised more sustainably?

Jamie: Unfortunately, raising corn sustainably doesn't make a difference in a farmer’s bottom line because Iowa farmers sell grain as a commodity; one bushel is valued the same as the next.  For people buying corn, one bushel of corn is the same as the next regardless of how it is grown.  

In the last 10 years there have been several initiatives to encourage farmers to implement environmental management systems, or more sustainable farming practices. For example, these environmental management systems encourage farmers to look at the success of their operation not only from an economic standpoint, but also from a socially and environmentally responsible perspective. But, that never really worked very well.  If one farmer was sustainable and their neighbor did a terrible job with conservation, their grain is worth the same amount of money. It’s all a commodity. 

With our work we have tried to change the perspective of the marketplace.  If conservation farmers can’t get paid more for their grain, they need to look at the market place differently.  Instead of looking at the value of their grain, they need to consider how being a conservation farmer can be used as a benefit in another part of their operation. One way that farmers can be more profitable is to have more access to land, or farm more acres, if they can rent this land at a reasonable price. 

Unfortunately if absentee landowners can’t differentiate one operator from another then they will rent their land to the person who will pay the most rent. Under this scenario farmers can only compete for more land by paying more rent.  So, we do think that there is a lot of merit to the idea that if conservation farmers can differentiate themselves based on their conservation ethics and performance, that they should have better access to that land.

That is the concept behind the idea of the certified conservation farmer program. If farmers can market themselves as better farmers that care more for the land they rent, then it is our hope that absentee landowners will be more likely to rent their land to these conservation farmers.   

It is our hope we can use this process of differentiating conservation farmers as a market based approach to encouraging more conservation.  

So, the incentive for farmers to do more conservation farming is to gain more land through renting?

Jamie: Sort of. That would be the big picture idea, but really at the stage we’re at, that’s not probably the case yet because most absentee landowners don’t understand conservation well enough. In a lot of cases absentee landowners don’t have the level of awareness to be able to choose between two operators based on conservation ethics.  To help absentee landowners make a better choice when choosing a renter, we are certifying conservation farmers.  This way an absentee landowner doesn’t need to know what constitutes good conservation, they just need to pick a conservation farmer. Being a certified conservation farmer is a way to differentiate your abilities when selling yourself to absentee landowners.  This is a way that you can get access to more land. It can have a real return to your bottom line and your profitability as a farmer. The reason that is good for society is because it gets more of those conservation farmers farming more acres. Ultimately, yes, if the idea caught on, it might entice some of the less conservation-friendly operators to want to be more conservation-friendly to pick up more land, but that’s probably way in the future.

I am looking forward to reading your comments!