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Can slowing money down help to support thriving local food economies?
Woody Tasch thinks so: the founder of Slow Money is working hard to re-root money in place, and in people, starting with food.
Inspired by the international Slow Food Movement, Tasch argues that money is moving too fast, increasingly so with the advent of online monetary exchanges and trading. ‘Fast money’ has created an official distancing from our understanding of what wealth is; created a dangerous disconnect from the realities of how money moves; and has significant impacts on our daily lives. Members of Slow Money believe this disconnect from capital has an adverse effect on the strength of our local economies, on local businesses, their ability to survive and thrive and, in particular, on the natural environment.
The mission of Slow Money is to reverse the effects of a fast money economy by working “to catalyze 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.” This not-for-profit organization seeks to integrate asset management and philanthropic purpose through mission-oriented investing, program-related investing and impact investing.
“Millions are concerned about social, economic and political dysfunction caused by financial institutions that are ‘Too Big to Fail’, wealth inequality that is too extreme, and the volatility of capital markets that are too abstract and too complex.”
New investment frameworks and models are emerging through the slow money movement. In some cases the local slow money organisations primary mandate is to connect interested investors with entrepreneurs ready for investment and, in many cases, mentorship and business development support. These networks
provide the frameworks, including loan criteria, loan assessment tools, examples of binding agreements for both parties and guidelines for accredited investors, and non accredited investors. As noted in the 2016 Globe and Mail article entitled, New crowdfunding rules widen pool for Canada’s private capital markets, “accredited investors make up only about 4 per cent of the Canadian population”, a limiting percentage for those emerging and existing businesses looking to access capital.
The Slow Money Alliance has active local investment groups in California, North Carolina, Maine, Vermont, Colorado and New York. Internationally there are Slow Money investor groups in France, Belgium and Switzerland. The movement is working its way into Canada with local investment groups in Nova Scotia and Vancouver.
In Vancouver, the local slow money initiative investment cooperative, The Knives and Forks Community Investment Cooperative, was incubated by the local financial credit union Vancity Bank, an already significant player in the investment of local food initiatives in Vancouver, BC’s Lower Mainland and Southern Vancouver Island. The Knives and Forks investment coop uses the co-operative structure to allow everyday citizens (unaccredited investors) to invest shares of $2,400, with a maximum of 2 shares at $4,800. Co-op membership costs $100.
“Knives and Forks focuses on local businesses involved in the local food economy. Restaurants, growers, producers, value-add suppliers, and more”, says William Azaroff , Executive Lead, Member Experience & Community Engagement, Vancity Bank.
Kate Dunford, Regional Manager for Community Business & Investment at Vancity, and a Director on the Board of Knives and Forks Community Investment Coop, explained Vancity’s decision to support the emergence of the local investment coop. “There is a clear desire from our membership to see, touch, feel and invest directly in business on the ground and in their communities. Slow Money seemed like a perfect opportunity partner to help us increase local investment opportunities with a primary focus on local food enterprises. »
In Vermont, the Slow Money online platform, Milk Money, connects local interested investors with established local food businesses ready for investment. “Milk Money is where Vermonters discover local investment opportunities, get tips on how to evaluate those opportunities, and then make an investment.”
In Maine, the No Small Potatoes Investment Club expose and introduce individuals to available financing options, working creatively and collectively to connect promising businesses with the necessary financing and technical assistance to be successful. Success stories from this local chapter include: The Portland Food Coop which opened its doors in December 2014 as a member-owned business dedicated to supporting the local economy. The enterprise exceeded financial projections with more than $3.3 million in sales in its first year, including more than $1 million from food and goods grown and produced in Maine.
“Millions of consumers are already voting with their dollars in support of a greener path to market, notably through the purchase of local, sustainable and organic food.” – Slow Money Strategic Report, 2015
According to the Canada Organic Trade Association, Canada imported $652 million of organic products in 2015. The current heartland of Slow Money, California, is a growing organic market upon which we, in Canada, are highly dependent. So, while it is very important to build greater local links to our food, reinforcing the strength and vitality of local food systems, supporting efforts for the diversification and resilience of other food systems has some important strategic benefits to our own food security in Canada.
Québec investors are increasingly looking to the food and farming sector for innovative projects with the potential for investment. According to the UPA, in Québec, more than 40,000 residents have made agriculture their primary trade. But the reality is the farming population is aging rapidly and a good percentage of the next generation of farmers are tending to return to smaller scale, family farming models. With that reality at hand, there is a need for major investment in new farming businesses to replace larger farms currently at risk with no clear successors in place.
In 2011, one third of emerging farm businesses were young people launching their own farming enterprises. In other cases, younger generations are taking over the family farms, but transitioning to more sustainable production methods. Meagan Patch of Patch Farms, located in the Brome-Missisquoi region of Québec, is an example of this trend. A 4th generation farmer, Meagan has taken on the family cattle farming businesses, but is transitioning to more sustainable production methods, including rotational, grass fed, pasture beef.
With 300 acres of farmland, the rotational grazing approach requires new infrastructure to support the next generations of this farm. New needed infrastructure includes: water pipelines to facilitate rotational grazing; new grain storage unites; field drainage to increase the pasture area available; and new bloodlines for breeds better suited to this type of agricultural production. These infrastructure needs represent investments at key moments of growth, often at a price tag between $5,000-$15,000. The need for smaller scale, timely investment often deters younger farmers from going after the larger $100,000 plus infrastructure loans as the annual interest alone could be crippling in the early stages of their business. As a 4th generation farm, Meagan is often not eligible for the ‘start-up’ loans available to new farmers launching new agricultural businesses.
The mission of Slow Money may seem bold, but as noted in their 2015 Strategic Report, to date 33,170 people have signed the Slow Money Principles and “since 2010, over $56.5 million has been invested in more than 632 local and organic food enterprises through our network”. Members of Slow Money groups keep a close eye on local food trends and are continuously assessing the opportunities to concretely invest in local food initiatives, through the creation of direct, local investment mechanisms that support the revival of local, sustainable food business and local food economies.
About the authors:
Laura Howard and Marina Jolly are the cofounders of Récolte, a local economy initiative that aims to revitalize and strengthen local food ecosystems by supporting the emergence of viable alternative business that support a more sustainable, local future of food.
For more information on Slow Money in Québec, join Récolte on September 13th, from 6-8pm, for a presentation on alternative financing mechanisms for local food, or at Forum Novae on October 25th for a masterclass on Revitalizing Local Food Economies.
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