The Graham Self-Reliant community delved into an exciting new topic at last week’s monthly meeting by inviting Tim Crosby, the director of Slow Money North West, to speak about his organization’s efforts to assist small and mid-sized farms in obtaining the necessary funds to become commercially successful.
Crosby’s organization, Slow Money North West (Slow Money NW) is a financial investment firm that serves qualified investors who are content to receive a modest return on their investments, such as 1%-2% per year – hence, “slow money” – rather than pursue riskier investments that can earn 6%-10% in one year, or lose it just as quickly.
Quite simply, “slow money” is the opposite of a “quick buck.”
Founded in 2009, Slow Money NW currently has 49 accredited investors who have met federal requirements to make significant investments, according to Tim.
In addition, Slow Money NW investors are interested in building their local economies and creating jobs close to home. In this regard, Slow Money NW operates in consort with many of the principles espoused by the Western Rainier Economic Development Initiative (WREDI) and others who champion the idea of local stock market exchanges and other regional ventures to funnel monies into local business development.
“One of the goals of Slow Money NW is to get money away from Wall Street,” Crosby said to loud applause.
As a result of these combined notions of slow and steady financial growth coupled with building local economies, agriculture is a major focus of Slow Money NW.
Crosby and his team see local agriculture as a ripe opportunity for their kind of investors, since credit markets have tightened up due to the global economy
“We want to invest in ourselves, food and farming, and soil fertility,” he said.
Crosby sees the market for high quality food as a prime business opportunity.
“Only 4% of the global food supply is ‘good food,’” Crosby said, defining “good food” as foodstuffs that have high nutritional quality, are profitable for farmers to grow, and keep the soil well-nourished with minerals and other nutrients.
On that latter point, Crosby derided opportunistic farmers who rent a piece of land for a few years and plant crops that strip the minerals out of the soil, in effect leaving a sterile desert behind.
Crosby called this practice, “mineral mining.”
Crosby also characterizes the global food supply as “unstable,” due to issues such as unstable weather or economic pressures, again giving increased monetary value to agricultural ventures that grow “good food.”
Slow Money NW also sees enhanced value in “good food” as food safety becomes an issue of increasing concern.
“We pretty much have ‘Food Recall of the Week,’ now, don’t we,” he asked the audience, rhetorically.
Related to unhealthy foods are human diseases caused by foods that are nutritionally deficient, either lacking sufficient minerals, enzymes or other elements.
“America will be spending $500 billion cumulatively on food-related health issues by 2020,” Mr. Crosby said.
Hence, “good food” will be in increasing demand for the foreseeable future.
Bottom Line: “Good Food” is a good investment.
Further, food is big business, and the numbers are staggering. The average Washingtonian spends $3,888 per year on food, and with a state-wide population of about 6.5 million we spend about $25 billion each year on food in this state.
“And we are eating more that we produce locally, too,” Crosby says.
He acknowledges that some foods will never be grown in Washington, such as coffee and oranges, but he does see a $7 billion gap between what we could grow locally and what we import.
“If we could chip away at that $7 billion per year, to the tune of 2% a year, it would create 6,000 jobs in the agricultural sector. That’s huge!” Crosby says, and his perspective is to keep chipping away at the amount of food that gets trucked-in so the number of new jobs in agriculture would continue year after year.
Projected over a few years, Crosby says that a 20% shift of food dollars into locally directed spending could result in nearly a half-billion dollar investment in our state’s economy.
This would also create a more de-centralized food supply, and that would make us less dependent on fuels and trucking and less vulnerable to natural disasters.
Tim readily acknowledges that many of these ideas are not his originally – nor are they new – and he touts of the work of author Woody Tasch as being instrumental in the development of the slow money movement.
Tasch’s book, “Slow Money – Investing as if Food, Farms and Fertility Mattered,” is a major focal point in the movement, as is the related efforts of “Grow Food,” an organization that is dedicated to teaching sustainable farming practices to a new generation, which is particularly important as the average age of farmers in the Untied States is 58.
“Last year it was 57 years old,” said Tim.
Associated with that aging demographic, the older farmers tend to have larger farms than the farmers just starting out, so not only are farmers being lost, but acreage is as well.
“However, we’re now getting increasing numbers of young people going into farming,” Tim said.
Tim offered several examples of new farmers entering the profession and how Slow Money NW is helping them.
One source of new farmers are the children of immigrants who worked the fields and know the practice of farming but need to know the business of farming, and most importantly need access to capital to buy seeds, land and machinery.
Slow Money NW is providing multiple avenues to capital. For some, Slow Money NW provides a bridge loan in the spring to provide the seeds and working funds to bring in a crop.
Other times, a farmer wants to expand his acreage and crop, but can’t convince the banks to provide the loans because the farmer doesn’t have an established market – and wholesalers won’t commit to a contract because the farmer lacks a history of producing a greater volume of crop on time and in good condition. Into the lurch steps Slow Money NW to bridge the gap.
Tim and his crew also provide “micro loans” of $10,000 to farmers who have small pieces of land but big ideas. Also, the micro loans can be incremental: when a $500 loan is repaid the farmer is eligible for a $1,000 loan, and so on.
“It’s all about relationships,” said Tim. “We’re really doing old-style banking. This is how it was done in the old days before default credit swaps…loaning money to people you knew in the community and trusted…You think it would be obvious, wouldn’t you.”
Slow Money is also developing professional networks for farmers, identifying “angels” who can tutor a farmer in legal matters and contracts, develop an expanded business plan or provide “presentation coaching” so a farmer can be as persuasive in a boardroom as they are in the farm field.
Slow Money NW also sees the value of good farm lands and is developing a “soil trust,” in which anyone can invest.
Currently, Slow Money is working with several agricultural producers, such as Hot Cakes Confections, Willapa Hills Farmstead Cheese, and Farm Power Northwest, LLC. The latter is producing clean energy from “America’s cows” by utilizing manure digesters to create methane, which is burned as a fuel in a generator that creates electricity.
Slow Money NW also supports the local initiatives to preserve farm lands, such as those launched by the PCC Foundation to successfully assist the transition of the former Ford Dairy in Orting into three organic vegetable farms. This occurred by developing relationships with the farmers and government officials, such that suitable agricultural easements were created. They were then coupled with supplemental funds to match the difference between what a housing developer could pay for the property versus what the organic farmers could pay.
The net result is that wholesome lands stay in production and more “good food” comes to the table.
For more information: www.slowmoneynw.org .
© 2011 The Mountain News – WA