ImpactAlpha, October 28 – It takes conventional farmers in the U.S. three years to transition and become certified organic. Financially, it can take a toll, because their yields often drop, but they cannot yet recoup income by charging premium organic prices.
Rabo AgriFinance is rolling out a transitional loan product to support farmers going through organic certification. The agricultural finance firm, which is a U.S. division of Dutch bank Rabobank, based the loan product on unmet and rising U.S. demand for organic crops.
“Demand has grown faster than domestic production,” said Rabo AgriFinance’s Stephen Nicholson said in a statement.
Farmers’ loan repayment will be structured flexibly around when they begin selling certified organic produce.
Rabo AgriFinance is partnering with Pipeline Foods as a way to de-risk its loans. Pipeline Foods will provide advisory support to farmers making the organic transition.