As little as five years ago, when Renewing the Countryside was promoting local farmers and a sustainable food system in Minnesota, people asked: Is there really a demand for local foods? Today, the demand is clear. The local-food movement is alive and well in Minnesota. Farm-to-school programs are growing. Mainstream grocery stores are promoting local products. And food councils are popping up across the state.
Today the question on people’s minds is: How do we grow the supply of sustainably grown local foods?
We are fortunate, in the north central region of the U.S., to have a strong base of seasoned, sustainable farmers who are willing to expand their operations. We also have a number of new farmers interested in filling the gaps. Other entrepreneurs see opportunities in processing and distribution. However, many of these people struggle to pull together the resources and financing to move their operations to the next level.
|Featherstone Farm in MN invested in new energy infrastructure. |
Where do our personal investment dollars go?
At the same time, when saving for retirement or college, many of us in the Heartland send our money to the coasts to be invested in what, for many, seems like a black box. We are often dependent on a few large investment companies, often identified by our workplace or our bank. We know little about how the money is invested or the values of the companies who are receiving the money. While socially responsible investment funds are an option, these still take money out of local communities and use rather simplistic criteria to choose where the money is invested (i.e. weapons and tobacco are bad, but high fructose corn syrup and poor working conditions are OK). Local farms and small agricultural businesses, so vital to long-term health and security, never see a penny of this investment.
Even if we wanted to invest in our local communities—and more and more of us do—there have not been very many mechanisms for doing so beyond buying locally, making donations, and volunteering.
Ideas for innovative investing
The Slow Money movement has created a national dialogue in regards to how we, as individuals, invest our money – especially in regard to food. “Slow Money” is a term coined by Woody Tasch, who wrote a book of the same name. Tasch had been the financial director at a large foundation where he was disturbed that the mission and goals on the grantmaking side of the foundation were at odds with its investment strategies. The foundation made grants that helped improve community health and social equity, but the primary criteria for investing their funds (which provided the interest that they used to make grants) was the rate of return—regardless of where the money was invested. Tasch set out to change that within his foundation and then began talking about this issue more broadly.
The tenets of Slow Money that resonate within the sustainable agriculture community and local foods movement are:
- Invest in real places, people and enterprises close to home, starting with food
- Invest patiently and with a long-term goal of building healthy enterprises, communities and ecosystems
- Measure success by the world we create and the health of our soil, not just by profit
- Fix our economy from the ground up
Slow Money-style mechanisms are currently at work in the sustainable agriculture community and are on the rise. Every year in Minnesota alone, thousands of people purchase CSA (community-supported agriculture) shares. People invest at the beginning of the season with the understanding that they will share the rewards (boxes of food) and the risks (less food if the season is bad). But research suggests that there are opportunities to expand the number of innovative financing strategies. What better way for an ethically minded consumer to make both a difference and, perhaps, a decent return than by investing in a farmer? It’s already happening all over the country, and in our own backyards. Recently we have seen:
- A sheep farm and artisan-cheese enterprise raise hundreds of thousands of dollars from friends and community members to save their farm from foreclosure;
- A mid-sized fruit and vegetable farm raise $160,000 in loans from CSA members, food co-ops, and friends to install solar panels on their buildings; and
- A direct-market farmer raise enough upfront capital from his customers to increase the size of his beef herd.
While not farm- and food-focused, a group of banks in Minneapolis and St. Paul have developed Socially Responsible Deposit Funds (SRDF). A customer can designate that her money, whether in a savings account or CD, be part of the SRDF. These funds are then used to provide loans to small, community-based businesses. They receive the same interest rate as their non-local counterparts within the bank, but customers are assured the funds are assisting local businesses.
Imagine redirecting all or part of your personal or community resources to those who need them most while also providing avenues for meaningful connection to the local economy. We currently have a unique window of opportunity to identify new investment pathways. The low rate of returns on investments, anti-Wall Street sentiment, and growing interest in local foods may provide the right conditions for radical change.
What innovative strategies are you seeing in your community to finance diversified farm and food based business?
Will we, as a society, be able to shift at least some of our assets away from the dominant model of investing in the stock market?
Pons, E. and Long, M. Promoting Sustainable Food Systems through Impact Investing, 2011.
Tasch, W. Inquiries into the Nature of Slow Money: Investing as if food, farms and fertility mattered, Chelsea Green, 2008.
Shuman, M. Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity, Chelsea Green, 2012.