How Responsible Investing Can Change the Food System

How Responsible Investing Can Change the Food System

"We must bring money back down to earth."

This is the first of the Slow Money principles. The third annual Slow Money conference, held last week in San Francisco, drew over 800 attendees, including investors and entrepreneurs who were farmers or working in the farm sector supply chain. The gathering's intent was to help others "learn to invest as if food, farms and fertility mattered."

This event was also birthing something on a broader scale -- a movement dedicated to changing how food is grown, produced and distributed. Slow Money emphasizes creating and sustaining local food systems which support land restoration and preservation with, preferably, local investments.

"Agriculture is not a free market -- there's lots of market intervention," said Jim Slama, founder of FamilyFarmed.org. This has caused striking imbalances in our food ecosystem. Less than .2 percent of the food consumed in Illinois actually came from within the state -- even though Illinois is about 80 percent farmland. Instead, corn (used for ethanol) and soybeans dominate the land.

To counter this situation, the Illinois legislature passed the Food, Farm and Jobs Act, driven in part by the fact food consumed in Illinois travels an average of 1,500 miles from farm to plate. The Act requires that 20 percent of food purchased by state-related institutions come from Illinois by 2020. Additionally, a 2010 study from FamilyFarmed [PDF] shows that just 14 commercial buyers interviewed for the report would buy $23 million worth of Illinois-grown produce -- far more than is currently available for sale in the state.

The "slow" part of the Slow Money equation refers to the inherent timing of sustainable agriculture, which does not conform to the increasingly "fast" food production methods -- e.g. agribusiness using GMOs and raising livestock using antibiotics and hormones -- that seek to turn a fast profit.

"Focus on the value chain -- everything between the farm and the plate," explained Dr. Glenda Humiston from the USDA Rural Development agency in California. "This will translate to jobs."

She touted the importance of regional agricultural value chains, essentially rural-urban partnerships, that will create local jobs related to food support services, processing, packaging and distribution.

California has in the past sent its food out-of-state and even as far away as China for processing. But an investment in infrastructure could lead to a big boom in jobs in the Golden State: Humiston projected an increase of 181,000 jobs (65 percent of them off-farm) in California. The California Financial Opportunities Roundtable (CalFOR) initiative strives to link farmers to entrepreneurs, existing businesses, investors and competitive intelligence information.

Fifteen regional crop associations in California are creating organic farming programs to help farms slowly convert to sustainable farming. The lengthy conversion process and limited access to (slow) capital are obstacles, but not insurmountable ones.

"We are moving from a big idea to lots of small actions," said Woody Tasch, founder and chairman of Slow Money. The intention is to broaden the movement by pulling in new people who believe in the principles while expanding Slow Money's organizational structure.

Where does one find "slow" funders willing to invest in sustainable agriculture? Besides at conferences, the Slow Money team is helping to incubate investment clubs similar to the "No Small Potatoes Investment Club" located in Maine. Started in 2010, it makes pooled micro-loans up to $15,000 to local farmers and food businesses; a $5000 investment is needed to join.

While public policies in support of sustainable agriculture are emerging, it is the ingenuity of those already living and working in farming communities that is re-creating the food ecosystem. There were a number of innovative businesses, as well as market opportunities for investors and new and existing businesses, on display during the Slow Money Conference's breakout and plenary sessions as well as the entrepreneur showcase.

• Point Reyes Compost Company in northern California is helping with the soil issue and looking to expand: the company converts dairy cow manure to fertilizer for urban and organic farmers. Composting is integral to organic and biodynamic farming practices, and turns what would otherwise be considered waste into a valuable resource for improving farm productivity and soil quality.

• Innovating existing resources to spur local economic activity was a common theme among the 30 entrepreneurs. Maine Grains has converted a former county jail in central Maine to a gristmill to revive local grain production and create a hub for food ventures and new jobs.

• Northern Girl has brought opportunity to many small family farms in Maine's most remote county. They have re-created the local value chain by offering value-added processing of vegetables that are distributed to schools, hospitals and retailers year-round.

• "Only 2 percent of dairy manure is harvested for energy and it's with the largest dairies," explained Kevin Maas, founder of Farm Power Northwest LLC. Working with family dairy farms with around 500 cows, Farm Power owns and operates anaerobic manure digesters to convert manure to renewable electricity while providing sustainable products to the farmers as well.

• The distribution of sustainable food continues to be a challenge for lower-income urban areas. Stockbox Grocers, based in Seattle, is increasing access to underserved communities by creating "miniature groceries inside reclaimed shipping containers" which stock fresh produce and other healthy staple items. While the initial permitting was cumbersome, the state of Washington has now fast-tracked the process so it can be easily replicated.

There is honor that comes with treating the land and its environs respectfully and with appreciation. It may not be said explicitly, but if you listen to the stories from those who work the land, it can be heard. And the food we consume also has its own stories; we taste those at every meal.

Amidst all the informative discussions at the conference, of which there were many, there was an underlying reverence -- a felt sense of the personal connection people have to land and the food it produces. As explained by one presenter, "This is about the slow restoration of the good ... there's wisdom in redemption."