By Jimmy Dula, NFU Intern
As public interest in local and organic food increases, new markets have emerged in response to higher demand for these products. However, producers often need access to additional capital in order to access these markets. In response, Woody Tasch authored Slow Money: Investing as if Food, Farms, and Fertility Mattered, a call to bring agricultural investments back to the people and soil that need them.
The Slow Money network has facilitated a wave of agricultural investments across the county. Since 2010, over $57 million has been invested in more than 632 food enterprises in the United States, France, Canada, and Switzerland. The funds are distributed as low or 0% interest loans granted by one of 17 local Slow Money chapters with the mission of “catalyzing the flow of capital to local food systems, connecting investors to the places where they live, and promoting new principles of fiduciary responsibility that ‘bring money back down to earth.'”
What is unique about this system, aside from the low interest rates a not-for profit investment club can offer, is its relationship-based lending structure. As the name would imply, money does not move quickly through these investment clubs. Instead, local Slow Money chapters meet with potential borrowers, grow relationships, and build camaraderie within the agricultural community before any investment occurs. This allows for a system of personal, rather than material, collateral, something all people are capable of providing. For instance, if an individual’s assets do not qualify them for a traditional $1,500 loan to finance compost delivery, they can apply for a similar-sized loan through Slow Money based on their character, commitment, and demonstration of good business practices. Agriculture is a gamblers game; things don’t always go as intended, due to any number of contingencies – weather, pests, policy changes, market conditions. So for start-up agricultural enterprises, good character can likely provide more security than the depreciated market value of a tractor.
As a beginning farmer and the recipient of a $15,000 loan, I have experienced first-hand the benefit of relationship-based lending. I used the capital to purchase fencing, irrigation equipment, soil amendments, fruit trees, and labor to establish my production operation. Investors visited our farm to see our progress and, should we need help, to provide advice, insight, and a network of community members to ensure success.
To learn more about Slow Money or find an investment club near you, visit https://slowmoney.org/.