Posts Tagged ‘farming’

Root Capital: “Investing in Resilience” for world’s farmers

Root Capital is a well-established nonprofit social investment fund that focuses on small farm businesses in the developing world.  They lend capital, provide training, and build the local market ecosystems that can help these small and growing businesses thrive. Like many others, Root Capital is rallying around the idea of resilience as a practical and powerful way to respond to the uncertainties of our changing climate.  Their new Issue Brief addresses this head-on; it’s called Investing in Resilience: A Shared Value Approach to Agricultural Extension.  As they note in the Executive Summary:

The science is clear: climate change is coming. What is less clear is how climate change will impact specific farmers, supply chains, or countries over different time horizons, and how stakeholders should prepare for these impacts. . .  . This issue brief focuses on scaling the use of climate-smart practices among smallholder farmers by working through local agricultural enterprises, such as farmer cooperatives or processors. Aggregating hundreds or often thousands of dispersed smallholder farmers, these enterprises represent a significant, but often overlooked, channel for delivering “last mile” agricultural extension – that is, services that provide farmers with the information and skills they need to improve their farming practices.

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Conservation finance poised for mainstream markets

Restoring wetlands, protecting working forests and farmland, and enhancing wildlife habitats are some of the most exciting avenues for resilient investing.  Such efforts provide tangible returns in the form of regional resiliency, and increasingly, they are being packaged into traditional investment vehicles that offer reliable financial returns as well.  Earlier this year, senior executives from Goldman Sachs, JPMorgan Chase, Credit Suisse, and others gathered to discuss what they see as a burgeoning market for conservation finance. “The mantra of this event is, ‘scalability, repeatability, investability’” said John Tobin, managing director and global head of sustainability at Credit Suisse.  And the numbers being bandied about are certainly exciting for those of us who’ve been touting the trailblazing—but modest—grassroots efforts of various regional organizations that have, until recently, been the primary movers and shakers in this realm.  Consider: while conservation efforts by governments and foundations have been funded to the tune of about $50 billion/year, 

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Farmland venture starts redemptions to first investors

Iroquois Valley Farms, one of the first ventures that raised investment monies to purchase and restore farmland, has successfully completed its initial phases and begun offering redemptions to its early investors.  Going forward, investors will be able to redeem their investments any time after a 7-year hold period.  The original 100 investors had bought in without knowing when, or if, they would get their money back, seeing this as a long-term investment in  Iroquois’ mission of preserving and providing access to farmland.  Having reached this point, Iroquois is gearing up to scale their project by raising $20 million in new investment (accredited investors only).

Since 2007, Iroquois has purchased 25 farms in Michigan, Maine, New York, Kentucky, Illinois and Indiana; 70% are being farmed by young farmers, most of them from second or third generation farming families.  As with the investors, the farmers leasing land from Iroquois have the right to move forward, by purchasing the farms after seven years of working them.  Likewise, they are welcome to continue leasing for as long as they’d like.

We love this model of farmland regeneration and ownership; kudos to Iroquois Valley Farms and its initial investors for showing that it can work for young farmers, for the land, and for investors. Visit their site to learn more; here are a couple of stories about farmers they’ve worked with:

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Inspiration and practical advice: investing in food, soil

Resilient investors are typically very attuned to the need and opportunities for investing in local, regional, and global farmland and habitat regeneration. Even recently, it was often difficult to find viable avenues for making these investments, but things are changing fast.  See our Zone 6 resources for many tangible, evolutionary options; and here are two recent online articles that offer both practical advice and big-picture perspectives that may inspire you to dig into this zone more actively.

The first is a great overview from Don Shaffer of RSF Social Finance.

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Good grief, now we’re importing/exporting FARMLAND (?!?)

With farmland and fresh water becoming increasingly scarce and valuable resources, there is an increasingly active market in buying and selling farmland across national borders.  I suppose we’ve been trading bits of earth this way for centuries (in the form of minerals, food, etc.), but it was still a shock to see this extending to encompass actual soil, hills, and watersheds.  This illustration, from an illuminating Vox “explainer,” is captioned “The color of the node shows to what extent a country is an importer (gray) or an exporter of land (red), and the size of the node represents the number of trading partners.”

Beyond the cognitive dissonance of the mere existence of “importing land” there are, of course, several deeper concerns; the most fundamental is the practice of new landowners shifting from food production for local farmers and their neighbors, shipping the fruits of the land into global supply chains instead (in particular, China is buying up lots of farmland to provide for its population’s needs).  Compounding this is local powerbrokers muscling their poorer citizens off the land so that it can be sold.  An ambiguous overlay a tendency to focus on how the new, distant owners may increase efficiency or otherwise increase the productivity of the land; again, such improvements may or may not serve local people and ecosystems, even if they appear beneficial for the global food production.

This wasn’t new to us, thanks to an article by our colleague James Frazier in the Natural Investment News last year.  As he stressed:

About half of all US farmland is expected to change hands within the next twenty years. Consider how the ability of a new generation of young farmers to acquire and finance farmland stacks up against the ability of large institutions to top any bid and pay cash for the best properties, and you can understand how big of a deal this really is, potentially for decades to come. To top it off, the new institutional owners are apparently quite savvy about what to grow, selecting the most profitable crops to meet growing demand for meat, nuts, and other gourmet foods in emerging Asian markets, presumably leaving the more risky, lower margin crops to small farmers. Fortunately, responsible investors have the means to make their own positive impact on American farming.

Click through to his article to learn more; and of course the Resilient Investing Map focuses on this problem (and opportunity!) within the “tangible assets” realm in Zones 4 and 6, and as an evolutionary approach to financial assets in Zone 9.

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Bigger isn’t better. Better is better.

Leslie Christian is one of the shining lights of humane finance, and in her most recent missive, she zeroes in on a subject near and dear to our permie hearts: the importance of putting our money to work in service of healthy soil and intact habitat.  She brings us into the room as she and a circle of collaborators find their way toward new models for owning and managing farmland (the image is from their property, Living Lands), and then takes us along to a meeting of NatureVest, a new Nature Conservancy initiative aimed at bringing private investment into some of their conservation efforts.

But then she steps back and challenges those who dismiss such efforts as “on-offs” that are not worth our time because they can’t scale; her title says it all: Getting Off the Scales. The rest of the piece is a clarion call for a new way of looking at growing good ideas—getting bigger is often counterproductive; instead, let’s replicate and localize the core impulse and benefits of such projects.  We’re totally behind her appreciation for the inherently local qualities that underlie what we call regenerative investing.

You should definitely go read the whole thing (it’s only a few powerful paragraphs); here’s a teaser:

We seem to think it’s appropriate to scale everything—farms, education, healthcare, and even relationships. Yet, people and places are so much more diverse, nuanced and interdependent than assembly-line products or software code. When we scale enterprises that directly serve people and places in all of their uniqueness and weirdness, we must inevitably standardize our understanding of those people and places. In the process, we surely fail to engage them and ourselves fully. We sacrifice quality for quantity.  My reaction to scale is visceral and intense. I find it dehumanizing, single-minded, and boring!

These are the kinds of investments that should take over the world—not by scaling so that VCs and Wall Street can swoop in and do their “magic”, but by inspiring the participants, engaging the public and working at an essential level—real dirt, real trees, real plants, real people, real understanding and real value.

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Growing Power: creating urban community food centers

Community Food Centers are local places where people can learn sustainable ways to grow, process, market and distribute food. One multi-pronged example is Growing Power, which has farms and related projects in Milwaukee, Chicago, and Madison. Their website describes the Milwaukee facility as “a wonderful space for hands-on activities, large-scale demonstration projects, and for growing a myriad of plants, vegetables, and herbs. In a space no larger than a small supermarket live some 20,000 plants and vegetables, thousands of fish, and a livestock inventory of chickens, goats, and bees.” Visit the Growing Power website.

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Cooperative Business Association

The National Cooperative Business Association (NCBA CLUSA) is an association of cooperatives and coop networks that include 29,000 businesses in total; it works with cooperatives and cooperative development organizations to embed cooperatives in their local and regional economies. NCBA CLUSA works with its partners to support cooperative development, fund cooperative education, and promote the need for ongoing research to continue to make the case for coops as part of the national and global economy. Visit website.

This resource is not a directory of coops to guide your shopping choices; rather, it is a great example of how businesses join together to create worldwide change. See, for example, their Farmer-to-Farmer program, which sends U.S. farmers overseas to support cooperative development principles.

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