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How America’s Only State Bank Is Helping Grow Ag Tech

Eric Hardmeyer

One-hundred years ago, a man by the name of A.C. Townley, a former politician with the Socialist Party, organized the Non-Partisan League in hopes of forming a farm organization to protect the social and economic position of the farmer. That Non-Partisan League gained control of the Governor’s office and established the Bank of North Dakota, the only state bank in the country, on July 28, 1919. 

Today, Eric Hardmeyer, President and Chief Executive Officer, and the team at Bank of North Dakota is still fulfilling its mission to “deliver quality, sound financial services that promote agriculture, commerce and industry in North Dakota.” As part of the Steering Committee for Grand Farm, Hardmeyer and BND are playing an integral role in the future of agriculture in the state.

Q: Why is North Dakota the spot for Grand Farm to come to fruition?

A: We can take our lead from what we did with the drone industry in Grand Forks and others and realize that North Dakota does have things available and appropriate for North Dakota to be a leader. Whether that be in the case of the drone industry and now the Grand Farm, which is taking advantage of technology and the cranial capacity that was generated through a few things that we developed in North Dakota. It’s taking advantage of some of the local talent that we have and spreading that out over the ag industry. 

Q: How do you see Bank of North Dakota’s role with Grand Farm?

A: I’m on the Steering Committee so one of the things I’ll be working with and doing is looking at governance and policy issues. Beyond the initial Grand Farm, I’ll be looking at how this would play out in North Dakota, the country and the globe as we look toward more automation across the board and how the Bank of North Dakota may, at some point, be uniquely positioned to assist financing ventures in and around this space. 

The Bank of North Dakota has been here for 100 years to allow North Dakotans to control their own destiny and promote agriculture. In fact, that’s part of our mission statement that was given to us 100 years ago: promote agriculture, commerce and industry. Our roots at the Bank of North Dakota are deeply meshed with agriculture. As we think about the Bank of North Dakota, what we do and how we play in this space, that’s the reason we were created. 

When I look at this opportunity for Grand Farm and to take farming to another level of sophistication, it’s appropriate for the Bank of North Dakota to play a role because that’s why we were created. 

Over the years, the Bank of North Dakota has morphed, changed and evolved with the economy and global issues, including technological advancements and sophistication with financial instruments. Our goal is to advance the state using the resources we have, which is unique to the country. We’re the only one of its kind in the nation that uses, quite frankly, tax player resources and deposits that, in most other states, flow back out to Wall Street or hedge funds. In our state, they flow to us and back into North Dakotans to advance businesses, education, home ownership and agriculture. 

Q: Venture capital is limited in our state. BND is working with the Department of Commerce, the North Dakota University System and private venture capital firms. Talk about the work that’s being done here and why this is important. 

A: That really goes to the heart of what we’ve been working on for the last three to four years and that is, again, trying to understand the whole capital ecosystem as it relates to money available for entrepreneurs. We were created to advance the state in different areas and economic development and financing economic development is our primary role. 

We have for many years, had our own venture capital fund. It’s called new venture capital fund, a legislature authorized program. Some of this really had to do with just sitting down with many different folks engaged in economic development and trying to understand what the roadblocks are for entrepreneurs. How can the Bank of North Dakota play a role in diminishing those hurdles? 

We really looked at the whole spectrum of programs and found several problems and issues with it. A lack of a continuum of programs, a lack of understanding by the entrepreneurial community in terms of what’s available and how to access it. The lack of money for true seed capital is where we saw the real gap. 

We’ve been working hard with the Commerce Department to really look at that issue and say, ‘How do we use this limited resource that we have available in venture capital, which today is somewhere between $50-60 million that we have available in the development fund and the venture capital fund to really spur investment for entrepreneurs?’

The work we’re doing right now is working with Commerce. They have the development fund. We have the venture capital fund. How do we work together to really put together the best program possible for entrepreneurs and understanding that there’s going to be successes and there’s going to be failures but learning to appreciate that without failure, there’s little chance for advancement? And also trying to get the decision makers in the state to understand that you sometimes have to risk your investment to succeed and sometimes you don’t always succeed. 

Q: You have the chance to reach almost every business and farm in North Dakota. What’s your message to them about how you can help them and their goals?

A: I should say that the real partner with the Bank of North Dakota and the large part of our success is the community banks across the state working with us in delivering our programs. The ability to use the bank and our ability to leverage with the community banks make this for a win-win in that entrepreneurs all need banking services.

You touched on research. There are a couple bills still working its way through the legislature that allows for university system research or private research to really advance North Dakota’s economy. Our view on that is that both of those approaches are important. They’re important because, as I’ve talked about, it’s imperative, and most people understand this, that North Dakota needs to really look at diversifying our economy. When you get married to agriculture and energy, you’re really subject to commodity prices up and down and they really can play havoc with your revenue. 

We’ll all come to appreciate that a strong diversified economy is really where the state of North Dakota needs to work on. I think research dollars going to the universities and private sector are all very important things in our journey to get there. It’s been a journey that I’m familiar with. I’ve been here at the bank for almost 35 years and have experienced much of this myself. I really realize how important it is for North Dakota to commit itself to diversify our economy. 

That includes adding value to those major industries, including agriculture and energy. Instead of being commodity based, if we can go down or up the value chain and create more revenue by having vertical integration, that’s what we need to do there. 


Venture Capital Loan Program
The New Venture Capital Program administered through the North Dakota Development Fund and offered through the Bank of North Dakota provides funding for early-stage companies. It is available for companies that can show proof of completed product development and market acceptance. This funding program allows financing through debt and equity investments. 


To learn more, go to bnd.nd.gov/business/venture-capital-fund.

Ag loans available through the Bank of North Dakota

Drought Disaster Programs
Ag Commodity Export
Ag PACE
Beginning Farmer Chattel
Beginning Farmer Real Estate
Biofuels PACE
Envest
Established Farmer Real Estate
Family Farm Loan
Farm and Ranch Participation
Farm Operating Loan Program
Farm Real Estate Loan Guarantee Program
First Time Farmer Finance
FSA Guaranteed Loan Purchase
Livestock Waste Management

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