Rabo AgriFinance and Conservis have established a development collaboration, which executives from both companies tell Agri Investor has the potential to facilitate farmers’ access to capital and a develop a greater role for agtech in institutional farmland portfolios.
Rabo AgriFinance, a Rabobank subsidiary focused on lending to North American agricultural producers, has partnered with Conservis, which offers farm-focused enterprise resource planning software, to develop new technology and expand existing offerings.
Founded in 2009, Minneapolis, Minnesota-headquartered Conservis provides distinct software platforms to row and permanent crop producers that connect real-time field data with financial results, designed
to facilitate more detailed communication between agricultural lenders and borrowers.
Robert Lubben, Rabo AgriFinance digital lead for North America, declined to discuss the terms of the partnership in detail with Agri Investor, other than saying that Rabo AgriFinance had not made an equity investment in Conservis. The partnership was announced last Wednesday.
Conservis founder and chief executive Patrick Christie told Agri Investor that partnering with Rabobank will allow the company to harness recent advancements in financial technology and operational analytics to build upon the current platform and further facilitate movement of capital between lender and borrower.
“We’re not doing this in a silo,” added Christie. “We’re doing this within the context of our ecosystem and people – both in the field, on farm and [with] the owners of the farms – and we’re also bringing in some of the agtech ecosystem into this discussion to really build a robust product set.”
For Rabobank, Lubben explained, the tie-up comes after a two-year study of the broader agtech market that revealed Conservis to be among the market’s standouts.
That effort also revealed a sentiment widespread among large family farming operations and institutional investors that, over the course of the past five years, farmers have gone from having too few data about their operations to now having too many to easily incorporate into their decision-making.
Leading institutions towards tech
Conservis began providing software directly to growers of certain varieties, sizes and types of produce in the US, Christie explained, before a move into Australia led to servicing a client base made up largely of pension funds and endowments. These clients, Christie said, had established vehicles to acquire and operate farmland assets at scale that necessitated the type of governance and managerial reporting typically required in LP-led structures.
Given the geographic and crop diversity within most large-scale farmland strategies, Christie said, the need for technology and coordination such as that possible through the Conservis platform and others will only increase as the farmland market continues to develop.
A lot of the financial folks are still working though what they should do and how they are going to do it. I think we’re coming to the point in time where there are opportunities to find efficiencies in your investment portfolio by deploying agtech,” Christie said, echoing a theme discussed prominently at last month’s Agri Investor forum in Chicago.
“The world moves quickly”
Christie said partnership with Rabobank will also help Conservis address the key challenge of encouraging widespread adoption among producers, who can continue to own their data and control when Rabo AgriFinance receives information, according to the agreement.
It is important the partnership with Rabobank also allows Conservis to remain independent, Christie said, a sentiment echoed by Lubben, who stressed the collaboration is part of Rabobank’s wider effort to digitize current activity throughout its entire rural business.
Agriculture has remained one of the last industries in which large sums of money are lent without audited financial systems, he said, and the timeliness of the data compiled on the Conservis platform is especially important. Lubben explained that, in addition to being more accurate than operations reports often written months after the fact, the more detailed data can also allow Rabobank to help borrowers make real-time production and logistics decisions.
Lubben said it was difficult to say precisely how long it will be before a producer without the ability to provide their lender with that level of transparency will have difficulty securing a loan.
“The world moves quickly,” said Lubben. “I’m sure that time will be upon us before we know it.”
University of Illinois professor and director of the TIAA Center for Farmland Research Bruce Sherrick told Agri Investor that Rabobank’s partnership with Conservis is an important development for the overall market for farm management software.
“This is Rabo really leading towards improvement in their collection of financials,” said Sherrick. “The digitalization of agriculture is happening and to the extent that farmers can get simplified, verified, generated activity data that is part of their financial story; that has to be better than asking a guy in December how much fertilizer he applied in May!”
By: Chris Janiec
10 December 2018