Slow Money Alliance

Comment

Comment by William Ray Ford on February 7, 2012 at 9:51am

Unifying Cascadia is a biogeographical title that attempts to identify some Oregonians who are interested in looking at the economy from a new perspective. At least that is what I got from the 1st meeting over at the Student Sustainability Initiative meeting house on campus of OSU at the 1st meeting held last Thursday. Come this Thursday and see the video. Apparently the author and soon to arrive speaker has a new outlook.  Seems a little like "Paying it Forward"....all good stuff like you like....Because the speaker is in Portland, Corvallis, Eugene and Ashland they didn't want to say Mid-Willamette Valley....looks like a one day event here but a week state wide with an all day in Eugene early March....Thought the mainstream could/should support it as we might learn something and profit from our expanded knowledge.  Enough?

Comment by Katherine Cleland on February 6, 2012 at 8:37pm

Bill, what is Unifying Cascadia?

Comment by William Ray Ford on February 6, 2012 at 7:40pm

I went to the first organizing meeting of Unifying Cascadia. Small but migty turn out. 5 of us and 3 were from the BEC. Next meeting this thursday night at the OSU Student Sustainability Center building. Meeting starts at 6pm. I can't go. Cheryl R. Good runs a good meeting. Short and sweet and they are showing a video. Might be a effort whos time has come. I posted it here on the event lister for March 8th....More details to follow.

Comment by William Ray Ford on January 31, 2012 at 8:23pm

WAC IV is gearing up again.  This year's event will be on May 10th in Eugene. The host is the Eugene Chamber of Commerce JJ O Connell has the lead. The Corvallis Chamber and BEC are involved. This is the mid Valley's business plan competition and last year's prize was $200,000 in a winner's take all event held on the campus of OSU.

Comment by William Ray Ford on July 12, 2011 at 8:15pm

Just heard about a couple of folks starting up an oats milling operation over in Linn County and will eventually meet up with them. Seems like more and more interest on local food production and processing.

Comment by Jef Jelten on February 8, 2011 at 9:11am

Ok, just a few questions that I am sure will not jeopardize non-disclosure.

Does Farmland LP underwrite this farmer/operator who wrote an endorsement, pay any of his feed cost, operating cost?  

Does Farmland LP currently charge this operator a 2 to 3 X premium for existing acreage comparable to what can currently be leased throughout the valley?

 

Do you compensate the operator for the fact that his livestock is performing a multitude of vital services in managing fields through controlled grazing and increasing soil fertility at his own expense?

 

Farmland LP may indeed invest in land fertility but it passes 100% of that cost + some onto the farmer. Maybe minus Farmland LPs expense for infrastructure which I suspect is also factored into lease rates.

 

Comment by Jason Bradford on February 8, 2011 at 8:51am

I appreciate your concern Jef, honestly, but you don't actually know the terms of either our leases or the debt incurred by the young farmer.  You may think you do, but from your comments it appears to me that you don't.  

 

These are private matters, so I am not going to share any details in a public forum.  But these general points are clear to anybody that is privy to our lease contracts:  Farmland LP invests significantly in the land fertility and removes this cost from the farmer AND Farmland LP doesn't earn any significant rent unless the farmer makes a good return after expenses.  

 

Otherwise, I agree with your sentiments. 

 

 

Comment by Jef Jelten on February 7, 2011 at 6:48pm

OK, I shall respond.

There is no question that lending went way beyond a simple agreement between lender and borrower. If you do not understand the dynamics of what went on over the last 5 to 10 years then we probably will not be able to understand each other.

The downside you speak of is the farmer not being able to pay the payments, either its debt to a bank or equal/similar payments to Farmland LP. The farmer looses everything, the land owner very little or nothing.

 

Look I understand that you need to say these things but you are seriously skewing the situation.

 

I am not cherry picking, the vast majority of farms are still family owned and it is the family owned farm that represents the future. This simple concept extends beyond farms too. This is the crossroads that we are at in the world today. Do we de-centralize, re-localize production, or do we allow a tiny hand full of the population who control 75% of the assets and capital scoop up the rest and rent it back to the commons?

 

Oh and I fail to see the benefit of convincing and facilitating a young person to enter into huge debt and an aggressive profit share system and he is responsible for all cost, during the worst possible time in history to do something like that. I suggest that Farmland LP benefits way more that that young lad, financially as well as conveniently having someone to vouch for you.

 

Done

 

If anyone of you out there is interested in investing then invest in these young people who have very limited options for realizing their dreams and are easily convinced to enter into debt (subprime) and poor lease deals. There are many out there with all the right stuff and I and others know who they are. 

 

Other options are to invest in Added Value Producer Grant applicants. They need money to do the real and necessary work of expanding processing the food that is produced. This is the best way to increase food security, and best of all your dollars are instantly doubled through the matched funds grants.

Comment by Wendy Kincade on February 7, 2011 at 6:06pm

I would like to reiterate Bill's earlier request to keep the discussion productive and civil.  And I definitely think this subject, and the Corvallis community, could benefit from a physical open forum.  Emphasis on the word "open," as in open-minded.  There is no reason why food security and economic prosperity should not be integrated, and there are lots of good ways to accomplish this.  There is no single solution.

Comment by Jason Bradford on February 7, 2011 at 4:31pm

I would say both parties to a loan share in the risk and the blame for any downside.  And by using non-debt financing (full equity), Farmland LP is designed to tolerate downsides better than debt instruments.  

 

And we can both cherry pick examples of family farms passing land on from one generation to the next cleanly.  And we can find examples of family trusts squabbling over whether they are going to sell the farm and cash out or pass it on to an heir that wants to stay in agriculture.  I can tell you a story about a retired farmer recently wanted to sell me land for $7000 per acre, for example.  (About $2000 above current market value).

 

Perhaps we can agree that there are all kinds out there.  I am not so interested in their motivations or discussing whether this is good or bad behavior.  It just is the situation.  

 

Whether Farmland LP is going to become a haven for ill gotten gains may have something to do with who we connect with.  I would suggest that of all the farmland funds out there, we are explicitly attempting to connect with people that share our mission and values.  And so far, I am pretty happy with the sort of folks who've chosen to invest with us.  

 

A farming cooperative is a great thing.  I don't see how Farmland LP is contrary to such an enterprise.  Perhaps you are saying that producer cooperatives are the best because the owners of the capital are also the producers?  And Farmland LP dissociates the ownership of farmland from farmers?  I am just guessing here but if that is your point I do find it interesting.

 

I believe it is important for farmers to own their own land.  However, I do not believe it is important for farmers to own all the land they farm.  Having rented land can be very good for farmers because it allows them to potentially expand and contract their operation.  If they need to cut back they can more easily with rented land, and if they need to put limited money into their business non-land investments typically pay off better.  For example, a farm may wish to sell off some of their land so they can buy into a farm cooperative for processing, which will make them more money in the long run.  

 

That said, the history of rented land is mixed. Often the tenant is not so motivated to do long-term investing, whether in infrastructure or in things like long-lasting fertilizers such as lime.  For this reason, lease structures have been devised that put the costs of certain kinds of long-term investments in production on the owner and annual costs on the operator.  

 

One can not evaluate Jef's comments about high rents fully until they see our financial records and understand what Farmland LP pays for.  But to give you a sense of how we feel we help farmers, here is a portion of a letter one of our operators wrote to encourage more investment in Farmland LP:

Farmland LP also helps my business by financing and managing the establishment of pasture.  Since I do not own the land, I am reluctant to bear the cost for pasture establishment, which pays back over multiple years.  But because I don’t have this cost, all my capital can be directed towards expanding the number of livestock I manage. 

He also adds:

For example, because of my relationship to Farmland LP...I have been able to receive USDA financing to buy 650 of my own ewes.

This is from a young man who is not inheriting any land and wants to be an organic livestock rancher.  So while the family farm is a great thing, it is not the only way.  We provide opportunities for those that otherwise would not be able to farm, and for experienced farmers that do not want to bear the burden of upfront costs that are best handled by the owner.   

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