A strong body of scientific research and field-level evidence shows that increased adoption of conservation practices and related crop inputs benefit soil health and long-term yield potential. But to date, there hasn’t been enough research on how to inspire farmers to try new practices.
But that’s changing.
New research from The Nature Conservancy highlights a pilot project we ran with them from 2021 to 2023 to learn more about driving adoption of climate-friendly inputs and practices.
The findings, recently published in the Journal of Soil and Water Conservation and highlighted on The Nature Conservancy’s website, offer excellent insight into how ag retailers can use a yield warranty (like our Crop Plan Warranty) to drive adoption of specific crop inputs and practices.
If you’re looking for a way to get specific products off your shelves and into the ground, keep reading for key takeaways and tips on how you can implement them to drive growth at your operation.
Background: The Pilot Project
From 2021 to 2023, we ran pilot projects with The Nature Conservancy. Our goal: determine what role a yield warranty plays in driving adoption of various conservation practices.
We worked with two farmer populations, in Iowa and the Chesapeake Bay region. In Iowa, we looked at how warranties can affect the use of cover crops. In Maryland, we looked at nutrient management practices. In both cases, there were five parties involved:
- Retailers selling the products associated with the conservation practices.
- Farmers purchasing the products and / or adopting the practices.
- Agronomists to advise farmers on how to implement the products / practices.
- The Nature Conservancy, which funded part of the financial guarantee.
- Us (Growers Edge), who handled the technical administration of the guarantee.
All told, nitrogen use decreased by 3.5 percent while farmers maintained or slightly increased yields (outputs ranged from stable to increases of 10 bushels per acre). In other words: the conservation practices worked.
Watch a webinar detailing the project.
Now let’s break down the key takeaways for ag retailers.
Warranties Boost Farmer Confidence and Boost Reputation and Brand Value for Sellers
Farmers are regularly bombarded with offers of new products promising higher yields. By attaching a yield warranty, retailers were able to make specific products stand out from the noise.
In fact, 75 percent of the farmers who participated said that the warranty was critical to their decision to adopt the products in question. And here’s an interesting twist: even those who didn’t sign up for the pilot project were more likely to use the product included in the pilot because of the warranty.
Why? The warranty is a vote of confidence from the retailer.
One farmer explained it like this: “If you were willing to put skin in the game, that’s different from the guy who was just coming up here telling me how great it is and it’s going to make me all this money.”
In other words: the warranty reduces both the material risk (of money loss) and the psychological risk (of choosing the wrong product) for farmers.
Related: How One Ag Retailer Nearly Tripled Product Sales with a Crop Plan Warranty
But there’s more to the equation: the yield warranty also reduces reputational risk for retailers who offer it and agronomists who recommend it. Even if the product doesn’t perform as expected, the farmer doesn’t face serious financial risk.
This is huge: with new products and practices, agronomists play a significant role in guiding farmers through the specifics of implementation. A miscommunication, missed detail, or misunderstanding could have a significant material impact on a farmer’s revenue for the year. The yield warranty removes that risk.
Trusted Advisors Are a Key Part of Adoption
While the yield warranty helped boost adoption, it didn’t work in a vacuum. Trusted advisors, including agronomists affiliated with private-sector fertilizer dealers, were also a big part of the equation.
They helped farmers bridge the gap from the theoretical to the practical, guiding them both on how and when to use the new products and on how to adjust their use of other crop inputs appropriately.
In the case of the Iowa pilot, which also included cover cropping, the advisors provided guidance on how to implement the new practice as well.
The takeaway: to maximize the effectiveness of a product like Crop Plan Warranty, make sure your customers have access to trusted advisors who can answer questions and guide them through any unfamiliar processes.
Profit Still Drives Farmer Decisions
While a yield warranty can help farmers overcome their hesitation about trying new products, they’re still motivated primarily by making a profit. In our current market, that means maximizing yields.
In our pilot project, farmers focused on maximizing yields rather than reducing their cost or use of fertilizer as the key to maximize profits. This led to less reduction in nitrogen use than predicted (3.5 percent actual vs. 10 percent projected).
One force that could change the calculus here is the passage of the 45Z tax incentive. Starting with the 2025 crop year, new tax incentives exist for biofuels produced with grain that meets certain carbon intensity (CI) standards. Biofuel makers who are eligible for the tax credit will likely pay a premium for feedstocks that meet the CI threshold.
So there may be a new incentive for farmers to adopt inputs and practices that reduce CI—and motivation beyond maximizing yield to deploy conservation practices.
Ease of Implementation Matters
The pilot showed that the yield warranty was most effective for short-term practices and for products and practices that are easy to measure (like biologicals). Longer-term practices and those that are harder to measure (like cover cropping) may benefit from other types of financial incentives.
One option proposed by The Nature Conservancy: an establishment warranty (tied to implementation of the practice) in addition to a yield warranty. This would provide some incentive to farmers to follow through with the more complex, unfamiliar, or labor-intensive parts of the full-acre prescription.
Maximize Results for Your Operation
The pilots also highlighted opportunities to drive better performance with a yield warranty. If you’re considering offering a yield warranty, consider adding these capabilities:
- Simplify the offering: The pilot program bundled multiple products and / or practices. While this is a great fit in certain circumstances, you may be able to drive greater adoption of a single product by tying the warranty only to that product. Keep in mind, though, that our yield warranties are adaptable. The “right fit” will depend on your circumstances and the population you serve. We’d be happy to talk you through your options if you have questions.
- Offer multiple warranty options: Farmers who participated in the pilots noted that they would have liked to choose among more warrantied products. This may be helpful if you’re deciding whether to warranty a product bundle or individual products.
- Add testing capabilities: Many farmers mentioned that they would have liked the ability to test warrantied products against their baseline products to determine how well the warrantied product worked that specific year. The ideal would be side-by-side testing. (Note: our new partnership with FarmTest will make such testing possible—if you’d like more information, please reach out to our sales team.)
Related: How to Get Stakeholder Buy-in for a Crop Plan Warranty
Yield Warranties Offer a Win-Win-Win This Purchasing Season
In a difficult ag economy, retailers and farmers alike are eager for products that can boost yield, increase opportunity (as with 45Z), and increase profitability. Yield warranties like our Crop Plan Warranty is one such product.
By reducing the risk of trying new things, it can encourage adoption of new, more climate-friendly crop inputs, help farmers meet eligibility criteria for 45Z opportunities, and secure retailers’ cash flow.
When you’re ready to get a sense of how a Crop Plan Warranty can help your operations, set up a time to talk.