Category: 2017 June – Investing in Sustainable Agriculture

>> Back to June 2017

Imagine you are seated on a patio in the Tuscan countryside. The fresh mozzarella coupled with sweet tomatoes, ripe from the warm sun, pairs beautifully with the garlic sourdough bread and crisp local wine. The setting opens the heart and soothes the soul. The vineyard you overlook is in its crucial stage of ripening, that last conversion of acid to sugar, and the company of friends and family couldn’t be better.

Why are we drawn to such a scene? What distinguishes the Italian gestalt is that the essential character of the place grows out of community relationships fostered around a shared meal. But we don’t have to go miles across the sea to find this synergy. It can, and in fact, does exist in our own communities if we take the time to recognize and cultivate our foodshed’s infrastructure.

This is a Call to Action to the people who appreciate the healthy ripple effect of a vibrant local food economy. It’s for people who want to grow their own Italian Riviera in their backyards. These are the people who appreciate the importance good food has in generating healthy communities and have the will and the means to develop a healthy local foodshed. We can recognize and recommit to being part of a great place, deepening our rootedness in our very own communities. In essence we are calling on all of us, who appreciate the importance that good food has in generating healthy communities, and who want to grow our own Italian Riviera in our backyards as well as to do our part in building resilient foodsheds.

Last March, I was honored to participate in the City of Riverside, California’s GrowRiverside Conference, the fourth year of an initiative to elevate local food and agricultural systems, economies and education. At the Conference I had the opportunity to experience the beginnings of a comprehensive food system and the potential to integrate much of the infrastructure that I envision in a resilient foodshed. The City of Riverside’s “Green Belt” is 4,600 acres dedicated to farming; it includes co-op owned farms and agro-ecological farming practices. Agro-hoods offer owner-occupied co-op homes within a community of local growers. A local food hub aggregates and distributes the harvest in collaboration with CSAs, farmers’ markets, natural food stores, and the EBT programs that broaden access to healthy food choices. Educational initiatives for the public reflect the multi-faceted nature of local food systems and include programs in agro-ecological farming practices, financial literacy, coop ownership and management, ethnic and cultural adult education, public engagement to influence food and agricultural policy; health and wellness, and a parallel path in culinary arts. Riverside’s educational system integrates inquiry and food awareness, and elevates leadership capacity throughout the community. In 1998, Riverside invested in the Riverside Unified School District’s central kitchen that produces and serves 35,500 meals daily — breakfasts, lunches, super snacks at the end of the day, and summer meals — to elementary and high school students. Sixty-five percent of these meals are free and 48 percent are locally sourced. These K-12 students, who grew up with elementary school gardens and have eaten good food for years, developed a life-long curiosity and standard around their own vitality and the food that supports their good health. The people of Riverside are collectively creating a dynamic infrastructure to ensure that food systems fulfill the needs of a robust community foodshed for each community member of every age and background.

Riverside is developing a successful model, co-evolving its foodshed to be democratically driven, growing its food and farming infrastructure from the ground up as inclusive processes. This contrasts with well-intentioned charitable efforts that often impose “This will be good for you” on community members who are isolated and wary of programs from which they might benefit. Consider instead, inviting young people to participate in the processes involved – Life Path Career Development — so they know what they are eating, enjoy the benefits of good food while cultivating their personal gifts and self-esteem. Now go one step further; each of us can participate in learning about, and developing our living food systems in our own respective communities.

Lynne Twist, in her plenaries and her book Soul of Money, reminds us that we have the opportunity to live the most fulfilling lives because of the challenges we have set before us. She posits that by challenging ourselves to view our “culture of money” through a new lens and create a spiritual relationship with our finances, we are transforming ourselves and our values toward leading fulfilling lives. Currently, our capital system is locked into a conceptual mindset — instead of a fluid, systemic value system — that idolizes money above all else. Any nod to the economics of community benefits may move us towards philanthropy, whi ch in turn increases the disparity of income. Philanthropy commits funds to those causes we believe in, but it does not enable paths to ownership among those to whom we claim to be in service. What philanthropy does do, to some extent, is track community benefits through various metrics — often not transparently.

These metrics are further developed in critical local investment paths and long-standing valuation systems that undergird our thriving hometowns.

As investors, perhaps the best way to undertake the challenge we are offering is through Direct Relationship – Driven Investing. This type of investing is the “greener than organic” standard in which the investor knows the entrepreneur personally. The investor may have the opportunity to perform due diligence with other local investors as we do in Slow Money NoCal’s Investor Group, SOIL — Slow Opportunities to Invest Locally. You may have the capacity to step up in moving your money even farther forward by serving as an enterprise invest or mentor and champion and represent the enterprise to other investors to ensure the entrepreneurs succeed. Entrepreneurs can elevate their ventures’ potency based on traditional investment metrics as well as Community Benefit Returns on Investment. Local investing drives the safety, good food, and quality of life we seek.

Thankfully, there are mechanisms with which to participate in Direct Relationship Driven Investments (DRDI). I mentioned Slow Money, where local investors gather by region to invest as if food, farming and fertility matter, meet entrepreneurs, get to know them, and ultimately invest money in enterprises that benefit the community while also showing the promise of being financially successful.

We can also invest locally and carry less personal risk by advocating within a community of people, such as the Garden Club in Riverside — Master Gardeners, nursery owners, et al — to create a Community Based Development Organizations (CBDO)^[1]. Through CBDO’s, as one of the Public Private Partnership platforms, we can mount Direct Public Offerings (DPO), as Economic Development & Financing Corporation in Mendocino did to enable local investors to invest in Mendocino Wool and Fiber, a keystone enterprise in a burgeoning fibershed. Now we are stepping up as catalysts, helping our hometown retain its agricultural land, and become a haven for all community members in your verdant watershed, your sunset through orange groves with sentinel tall palms, your desert vista expanding to a pale purple mountain horizon, your wind over waving grain, your promontory over a stormy sea. What better place to start investing locally than in our own local farms and food enterprises and infrastructure?

If you want to investigate local foodshed resilience in your community, contact us – theo@healinglivingsystems.org or – valentinestuart305@gmail.com. We seek to serve you in your community’s transformation fully realizing your roles in celebrating the place you call home.

Article Note
^[1] elibrary.worldbank.org/doi/abs/10.1093/wbro/lkh012?journalCode=wbro

Article by Theo Ferguson and Stuart Valentine

Theodosia Hamilton Ferguson, founded and serves as the CEO of the California social benefit corporation, Healing Living Systems, Inc.

Whose mission is creating climate stability through agroecology. Theo is an active investor and advocate in the infrastructure of the community food, farming, and finance space for 15 years. Theo is a founding member of Slow Money National, Slow Money NoCal, and SOIL — Slow Opportunities to Invest Locally, Slow Money NoCal’s investment group with whom she has developed a broad local food farming, and finance infrastructure portfolio in California and Iowa as direct relationship driven investments (DRDI) using Community Benefits ROI as a fundamental investment filter.

For more than that dozen years, Theo has served as an advocate,entrepreneur, and investor in public dialogue undertaking deep inquiry into the impacts of food, farming and finance enterprises and their true cost pricing and true cost accounting metrics. This inquiry has elevated the observation that a community foodshed resilience movement can serve as a SEA change in redefining the dynamics of the capitalistic economic system. By offsetting the negative impacts of eating industrial food and the commensurate medical costs individuals and families must pay — offsetting the costs of indentured eaters of Big Ag and permanent patients of Big Pharma — community members can experience the safety, health and quality of life returns realized through local direct relationship driven investing. Theo has been a member of the Social Investment Forum for 14 years.

Stuart Valentine, Founder, Centerpoint Investment Strategies

Mission and Service Role: To build true wealth for our clients and ourselves by guiding human creativity and financial capital to optimize the conditions for growing sustainable communities. We do this by helping our clients invest their money in both Public instruments and Private Placements that reflect their values, personally inspire them, and actualize their financial goals. In addition, they can expect to work with like-minded individuals committed to bringing about positive change on the planet.

We also affirm our responsibility to evolve this field of SRI/ESG/Impact investing from within, as active participants in an investment ecosystem whose ultimate purpose is to provide for the wellbeing of the investor and to be in service to the common good.

In my role as Co-Director of the non-profit Sustainable Living Coalition, I am dedicated to enhancing the conditions for a renewable energy powered demonstration of community food, farming and finance infrastructure through investments, community activism, and convening. In 2016, this includes a convener role in Fairfest 2016’s Planetary Local Food Summit, an event series that invites community members of Fairfield, IA & beyond to participate in visioneering an integrated, economically vibrant Local Foodshed Resilience Program (LFRP). The goal of adopting the LFRP is to establish a transferable Proof of Concept that can support other communities in the design of their own solutions towards local food shed resilience.

Representative of and Securities offered through Financial West Group (FWG), Member FINRA/SIPC. Stuart Valentine is a member of the Socially Responsible Investment Group within FWG. Centerpoint Investment Strategies and FWG are unaffiliated entities.

OSJ: 55 Main St, Suite 415, Newmarket, NH 03857  /  (603) 659-7626

This is not an offer to buy or sell securities. Such an offer can only be made by prospectus. Please check all information before making an investment.

>> Back to June 2017

Hundreds of people have died in northern Kenya in recent months due to conflict between armed cattle herders and the wildlife conservation community. During my visits to this part of Kenya over the last two years, I was surprised to find livestock in a region renowned for wildlife. The grasslands are home not only to elephants and zebras but also to cows and goats.

Drought in Kenya has resulted in wild and domestic fauna competing for water, triggering violence between pastoralists and conservationists. While the Kenya situation reflects an extreme response to an urgent problem, the underlying tension between farm and forest is nothing new. About 80 percent of global forest loss is due to agricultural expansion, especially in tropical lands essential to sequester carbon and mitigate climate change. Commercial agriculture is the major driver of deforestation in Latin America, while subsistence agriculture plays a prominent role in Asia and Africa.

Biodiversity has suffered as a result: Recent research concluded that wildlife numbers have declined by more than two—thirds in Kenya’s rangelands during the last 40 years, largely replaced by livestock—sheep and goat populations have soared by 76 percent. Similarly, severe wildlife loss has been recorded around the world, and the current global extinction rate is a thousand times higher than the natural rate.

Deforestation and land degradation caused by agriculture revolve around key sectors such as beef, soy, and palm oil. But these commodities are not competing on an even playing field—government subsidies make them artificially cheap. Subsidies are often justified to ensure food security and boost farmer incomes. Once initiated, though, they are difficult to eliminate due to vested interests.

Research by the Organization for Economic Cooperation and Development (OECD) estimates that agricultural subsidies in the top 21 food-producing countries totaled $486 billion in 2012. Annual subsidies in Indonesia and Brazil—the nations to suffer the greatest forest loss since 2000—are estimated to be $27 billion and $10 billion, respectively. Subsidies have a strong influence in shaping the climate for private investment in land use. A report by the Overseas Development Institute finds that economic incentives for agriculture far exceed subsidies to reduce land degradation, which total only $9 billion. And subsidies to restore degraded land globally—a potential area the size of Latin America—are far smaller still.

This uneven allocation of subsidies conflicts with the Paris Climate Agreement of December 2015 since meeting climate targets involves sustainable land use. In addition, more than 35 countries have made commitments to restore land through the Bonn Challenge, AFR100 and Initiative 20×20. Fulfilling these pledges requires the creation of financial incentives for businesses and individuals to restore land, as well as the elimination of subsidies that result in land degradation. Rethinking subsidies is essential for the environment and food security. World Resources Institute research estimates that we will need to increase food calories 60 percent by 2050. Degraded soils have low productivity, and the planet’s rising population requires restored and healthy landscapes.

The good news is we already have examples of countries that have successfully aligned market incentives with desired outcomes. For example, after national cattle subsidies were removed in Costa Rica during the 1980s, it became less profitable to engage in ranching, which made land available for restoration. This was part of the reason Costa Rica saw forest cover increase from 41 percent of the country in 1986 to 54 percent in 2015. Another important factor was the growth of the eco-tourism industry, which further reduced incentives to pursue cattle ranching. Travel and tourism contributed 13 percent of GDP in Costa Rica in 2016.

China is another example. The country’s “Grain for Green” program in 1999 increased food security by financing restoration of the Loess Plateau through subsidies for seeds and seedlings, as well as payments to farmers for ecosystem services. This project established 290,000 hectares of shrubs and trees and increased per-capita grain output by 62 percent. In conjunction with the subsidies for restoration, the Chinese government passed and enforced bans on grazing and cutting trees, allowing vegetation cover to expand from 17 percent of the region to 34 percent by the mid-2000s.

China and Costa Rica are examples of how the removal of subsidies which lead to land degradation and the implementation of incentives to restore land, are aligned with economic growth and food security.

These changes make it possible for countries to meet climate targets and restoration commitments.

The extensive subsidies for agriculture in the market continue to drive forest loss. This can result in dangerous conflict, as we see in Kenya today between the rural cattle herders and the wildlife conservation community. In a world of scarce resources and distorted incentives, the tension between farm and forests can become a matter of life or death.

Article by Sofia Faruqi, who manages the New Restoration Economy at World Resources Institute (WRI), which is working to identify the business models, financial mechanisms, and market incentives needed to transform disparate restoration projects into a thriving industry. The New Restoration Economy focuses on Brazil, Kenya, and the United States (www.wri.org/our-work/project/new-restoration-economy).

Prior to joining WRI, Sofia was a Portfolio Manager at Loring, Wolcott & Coolidge, an investment management firm in Boston, MA. Earlier in her career, Sofia worked as an Equity Analyst at Passport Capital; an Equity Research Associate at the Ontario Municipal Employees Retirement System Pension Fund; and an Investment Banking Analyst at J.P. Morgan. She has won multiple investment awards and her articles have been published widely, including the Wall Street Journal, Quartz, and Project Syndicate.

Sofia holds a Bachelor of Arts in Economics and Arabic from Dartmouth College and an MBA from the Wharton School at University of Pennsylvania. She is a CFA charter holder.