Community-based Approaches to Food and Finance
December 26, 2012
As we enjoy time to reflect on the year past, it has been an honor to share inspiring stories with you, like those of Viva Farms and Hawthorne Valley, and to announce some of the new work in food and agriculture that our community is financing — including Organic Trade Association, Common Market Philadelphia and Farmigo. These organizations exemplify the link between agriculture and community. They also make clear how important long-term access to land is for fulfilling their intentions.
Fortunately many people are waking up to the importance of organic food—not just because it may be better for them to eat, but also for the healing benefit it brings to farmers and the environment. However, less than 4% of all sales of food and beverage products in the U.S. are certified organic and less than 1% of all land used for crops and livestock in the U.S. is certified organic. This represents a tremendous opportunity and challenge in the coming decades. Imagine when each of these numbers reaches 25%, or 50%!
The most powerful shift will occur when we go “beyond organic”—Local, Biodynamic. These are the keywords for a truly community-based approach to food. We know that organic can be done at industrial scale, which carries with it many of the same economic problems we see in other large-scale or globalized businesses.
Instead, we think we’ll see tens of thousands of small, diversified farms sprout up over the next 10-20 years whether motivated by community resilience or business innovation. And we are aware of at least one new program, the Center for Diversified Farming Systems at UC Berkeley that calls into question the dominant paradigm of 20th century agricultural development with an approach to diversification on the farm that can be the key to feeding the world and practicing ecological stewardship.
So how does a diversified approach to farming connect with money and finance? Just as we’ve seen big developments in how people think about their food, we are also beginning to witness a huge parallel shift in how people think about their money. There has been significant growth in sustainable and responsible investments (SRI) over the past 30 years. 12% of all assets in the U.S. ($3 trillion out of $25 trillion total) are invested in SRI funds. Imagine when this percentage goes to 25%, or 50%!
Even more encouraging is that the fastest growing segment of SRI is Community Investing, defined as funds “that serve communities overlooked by traditional lenders.” Over the past three years, Community Investing has grown over 60%, from $25.0 billion to $41.7 billion in assets, and local food systems are a part of it.
Just as local has gathered as much interest as organic, we are seeing direct community investments capturing people’s imagination in a way that socially screened mutual funds do not. People are no longer satisfied with cutting out what’s bad; they want to invest in what’s good.
As always, we hope that you will enjoy these thoughts and stories, and we also hope that you will think about how your money is working to bring about change in our food systems, whether that is buying organic or biodynamic food at the farmer’s market, joining CSAs, investing in organizations that support diversification in food production, or supporting social enterprises such as Viva Farms. It will take investing, lending and giving in concert to bring about the change we want to see. Please consider RSF as your partner in this effort.
All my best,
Don Shaffer is President & CEO at RSF Social Finance.