Slow, Sustainable Investing

March 1, 2010 : GreenMoney Journal, by Dorothy Suput and Eric Becker

GreenMoney Journal – Spring 2010 Issue, by Dorothy Suput, The Carrot Project and Eric Becker, Clean Yield Asset Management Within the social investment field there is a growing buzz about “Slow Money.” Indeed, Woody Tasch, founder and Chairman of the Slow Money Alliance, wrote about the emerging movement in recent issues of the GreenMoney Journal, But to date few Slow Money investment vehicles have been available and therefore little capital has flowed down the Slow Money path. That is beginning to change. The Carrot Project is among the first vehicles utilizing investment dollars from social investors and putting them to work to help rebuild a sustainable food system. The Carrot Project is employing a community investment model to address the financing needs of small- and mid-size sustainable farmers in the northeast U.S.

The Bloomfield Farm

At least two features distinguish Bloomfield Farm in Charlotte, Vermont from other small, diversified farms. First, it's situated on land that is jointly owned by the 26 members of the Champlain Valley Cohousing community. Second, the farmers themselves, Tanya Srolovitz and Matthew Burke, are two of those member-owners.

Bloomfield is small and scrappy. Four years ago, when Tanya and Matthew started out, they were like pioneers. They had their home and access to the land, but little else. There were no structures on the property to house animals or supplies. There was no tractor or tiller to work the land. They did everything with shovels and hand tools. At the end of each workday, they stored those tools under a tarp in the woods.

Today Tanya and Matthew grow organic vegetables for the nearly 40 members of their CSA program, and a handful of wholesale accounts in the Burlington area – all from one cultivated acre. Several more acres pasture their flock of 80 laying hens and 7 sheep, providing eggs and wool for market. Bloomfield sells flowers and herbs as well. On the land, you'll now see a hoop house and a small barn to house their tools, including a walk-behind tractor. There is a vegetable washing area that's properly drained, and so a lot less muddy than it used to be.

This year, thanks to the loan they received from the Strolling of the Heifers Microloan Fund for New England Farmers, a partnership of The Carrot Project and Strolling of the Heifers, the farmers are making two additional improvements. The first, construction of a timber-framed, hexagonal farmstand, will accommodate the CSA program's weekly vegetable pick-up. It will also establish a kind of storefront, open to the general public. Tanya and Matthew harvested the timbers for the farmstand themselves and have hired help to build it. Tanya is excited about it, and expects it “to be a beautiful building and focal point of the farm.”

The second improvement will be the construction of a cold room, or walk-in refrigerator that uses a low-cost technology appropriate to their needs and resources. They'll install an off-the-shelf air conditioner and a thermostat-like device called a CoolBot to optimize cooling. Normally air-conditioners can't cool below 60°F, but the CoolBot overrides that limit and brings temperatures into the 35°F to 40°F range without damaging the equipment. This system costs about a tenth of the price of a commercial compressor, and claims to run on less electricity.

The cold room will fill a crying need at Bloomfield, allowing Tanya and Matthew to harvest crops at peak ripeness, and in advance of market days, thereby smoothing their work flow. The loan they received has eliminated the inefficiency of, for example, harvesting the same crop two days in a row, and with that, some of the burn-out potential of overwork. Without this financing the farmers would have done without these improvements, or they may have taken the uncomfortable step of borrowing money from other members of their co-housing community.

With these improvements to their farm Tanya and Matthew will have a stronger base on which to build their business.

Who Can Meet the Demand for Local Food?

As U.S. farmers (whose average age is 55) approach retirement, estimates are that over the next two decades, 400 million acres of agricultural land will be passed on to heirs or sold. Existing farms with large tracts of land, exemplified by dairies in the Northeast, are struggling with milk prices below the cost of production and are confronted with the decision to change their businesses or sell their agricultural lands, frequently to developers. The detrimental effects of farmland loss and intrusive development on environment, animal habitat, and human communities are well documented. The growing demand for locally and sustainably grown foods is providing opportunities for farm enterprises to gear up and meet it, but many farmers can't.

The Michael Fields Agriculture Institute reports that “a growing number of young people and new immigrants want to farm, but are challenged by the rising cost of farmland, a critical shortage of training, and lack of financing.” The Carrot Project’s 2008 survey of 706 farmers in New York and New England shows that 25% of farmers requesting financing are denied access to credit. More compelling is the fact that start-up and expanding businesses make up a majority of farms denied credit; 40% of start-ups are denied financing, and these are the farms on whose success we will increasingly depend.

Slow Money in Action

The microloan received by Bloomfield Farm is Slow Money in action. Through an innovative partnership involving a group of investors, Chittenden Bank, Strolling of the Heifers, and The Carrot Project, Bloomfield Farm and six other farms in Vermont and Western Massachusetts have received loans of up to $10,000 for working capital or capital expenditures. The microloan fund, the idea of Orly Munzing, Executive Director of Strolling of the Heifers, became a reality when she connected with Dorothy Suput, Executive Director of The Carrot Project. The Strolling of the Heifers raised the initial capital for the Microloan Fund from several sources: the proceeds from benefit concerts generously given by the legendary folksinger Pete Seeger, his grandson Tao Rodriguez-Seeger and bluesman Guy Davis in September, 2008; major grants from the Thomas Thompson Trust and Green Mountain Coffee Roasters. The Carrot Project brought the operational know-how to develop and administer a loan fund fueled by private investments.

The two organizations came to the same conclusion, that smaller farmers have difficulty accessing financing, through very different routes. Using a multi-faceted approach, The Carrot Project carefully researched the needs of small and midsized farms. Strolling of the Heifers is always looking for ways to do more for their constituents and Orly always asks ‘What else can I do?' This year the Microloan Fund will expand to the rest of Massachusetts with the involvement of the Massachusetts Development Finance Agency. The goal is to offer the microloan fund (loans up to $15,000) throughout New England. The Carrot Project is also developing a second loan fund offering larger loan amounts to farmers and farm-related businesses.

To date The Carrot Project has needed to raise only modest amounts of investment capital from social investors to support its pilot microloan funds. These investors have purchased CDs or promissory notes at cooperating local financial institutions to secure the loans made to the farmers. To realize the long-term vision of meeting the capital needs of farmers across the northeast, social investors will need to play an increasingly important role. The Carrot Project is not raising capital at the moment but anticipates doing so later this year. The investment opportunity will again likely be in the form of CDs or promissory notes ranging from three to five years and yielding in the range of 1.5-2.5%, depending on prevailing interest rates at the time.

About The Carrot Project

By working with farmers to realize their dreams, The Carrot Project is helping rebuild a food and agriculture system that creates opportunities for smaller farmers, provides healthful, locally produced food for citizens, and is good for the environment, as well as local and regional economies. We create, test, and operate financing programs that support profitable, sustainable farm businesses that are unable to find financing. We do this by: 1) partnering and leveraging the assets of community-based lenders, socially responsible investors, farm support organizations, and farmers; 2) learning and leading by example; and 3) sharing our work and experiences with others. For more information about The Carrot Project visit

Article By Dorothy Suput, Founder and Executive Director, The Carrot Project and Eric Becker, Chief Investment Officer, Clean Yield Asset Management

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