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Slow Money Alliance

Local investing for local sustainable food production and food safety

Website: http://www.slowmoneyalliance.org
Location: Corvallis site
Members: 16
Latest Activity: Jan 22, 2013

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Comment by Jef Jelten on February 5, 2011 at 10:48am

The farming systems and biology that Jason speaks so passionately about are extremely important and does absolutely represent the way forward.

 

However Farmland LP is not at all the way to achieve this goal. Farmland LP is effectively driving up the price of farm land in the willamette valley, making it too expensive for local, long time land leasing farmers to ultimately purchase the land which has been their goal. Farmland LP then leases the land back to these farmers at 3, 4, or 5 times the going rate. Also placing the burden and cost of transitioning the soil onto the farmers and livestock ranchers that lease the land.

 

There is a large and growing resistance to what Farmland LP is doing in the valley and I have seen the effects first hand. In my opinion there is little or no interest in paying 3 to 4 times the going rate for farm land in the valley at least for the 3 to 5 years it will take to transition the soil to a level that may warrant those prices so they are not likely to perform as promised anyway. 

 

I and many others here in the valley can show a dozen better ways of accomplishing what Jason talks about with regard to sustainable "permaculture" farming, one that emphasizes keeping farmers on their land and fair earnings for all.

 

Unfortunately there is obscene amounts of money being handed out to the banking, insurance, and finance sector and they are desperately trying to turn it into something tangible before the jig is up so I fear that Farmland LP will get millions and snap up prime farmland and sit on it for their clients. This is the old paradigm, the one that has brought the world to where we are today, and is not the way forward. I will be speaking out against this as often as I can.

Comment by William Ray Ford on February 7, 2011 at 6:51am

Now the debate starts! Nothing like a good healthy difference of opinion.  It will be very interesting.  Jef, have you and Jason met face to face and discussed the Farmland LP approach? 

It is good to have a healthy open discussion.  I look forward to the the postings.  I am sure I will learn a lot but not sure I will be able to get to the place where I will fully understand each of your positions but will give it a try!  Let's keep it healthy and civil as it unfolds.

Comment by Jason Bradford on February 7, 2011 at 9:01am

I am here a bit late in the conversation but let me start with Bill's from Feb 3. 

 

I did have a nice conversation with Steve Shields.  He confirmed that we'd be eligible AND he confirmed that we have no chance to win.  The reason being that our returns won't be what the Angel crowd is looking for.  

 

The upside of our participation would be exposure to local qualified investors.  This is very important to us (having local investors) so we are still considering it.  

Comment by Jason Bradford on February 7, 2011 at 9:17am

Now I will respond to Biff.  

 

Sorry it wasn't clear where we were focused geographically.  The SF headquarters exists because it is a center of finance and where my business partner, Craig, has historic roots.  It is easier to raise capital in such a hub but it also creates some potential tension for those sensitive to the geography of ownership.  Personally, Craig and I appreciate this and that is why we are reaching out to local investors.  Ideally, all or most of the money raised is from those in this community since the people here would benefit most from what we do and will have interests beyond financial--which is what our company is all about.  

 

Craig and I were founding sponsors of Slow Money and Craig has attended and presented at 2 or 3 Slow Money conferences.  He has also been to an Investors Circle conference.  We passed the due diligence process for Slow Money and are in the process with Investors Circle.  Both these groups look at us from the perspectives of our we good for the environment, do we have equitable distribution methods, and is our business likely to be profitable.  

 

It would be fantastic if a local group would put us through the same "ringer" and ask all the tough questions.  This could be done in many ways, such as a local manager of retirement funds or endowments, or simple an informal group of local investors that forms a committee.  

Comment by Jason Bradford on February 7, 2011 at 9:26am

Hi Wendy,

I haven't heard about that book but am familiar with the tragedy North Korea went through.  Might be a good read for me.

 

You are right to see that there are bigger, deeper, more important than money issues here.  Having a safe and reliable food supply is so crucial to the fabric of society that it astonishes me how far we let this system go this far without stepping back and going "Whao!"  I don't tend to talk about this much because I don't want to scare people into doing something.  We try to focus on the positives, which are plentiful, but I also see this as a food security issue.

 

And this is why I am working on this at the scale of a farmland fund instead of a single property.  It is true that there are farms out there building topsoil, lowering their reliance on outside inputs, and distributing locally, but they represent a tiny fraction of the land base around us.  For me to feel truly secure I decided I wanted to work on helping to feed Corvallis, not just my own family.  

Comment by Jason Bradford on February 7, 2011 at 10:07am

I consider Jef to be a dear friend so, honestly, to have him vigorously come out in public against my work is a bit hard to take.  Still, I believe I know where he is coming from and I think it would be a worthwhile exercise to take up his points for discussion.  Trouble is that to get deep into some of them is the kind of thing I would only want to discuss with somebody in the context of a non disclosure agreement.  This means that unless you are a qualified investor and are going through the due diligence process you will not be privy to the kind of documents I would need to show you to reveal our actual practices and contracts.  It thus risks becoming a "Who do you trust?" situation.  

 

That said, I'd like to give some general perspectives.  First, Farmland LP has a goal to purchase some acreage in the Willamette Valley.  Let us say we are moderately successful and can buy 2000 acres.  This will mostly have been conventional grass seed land that is converted to organic farmland for primarily local, human consumption.  That 2000 acres should be compared to the ca. 1 million acres in the valley and the fact that most current grass seed farms are at least that size, and usually larger. 

 

Second, we are price sensitive buyers.  We have limited capital to deploy and are buying with returns in mind.  Much of the land price inflation in the area has come from two sources:  non-farmers wanting to live on land for lifestyle reasons, and easy bank credit between 2001-2008.  If you look at what farms are in trouble right now and declaring bankruptcy, they are the ones that went into debt to expand land purchases during the boom in grass seed prices, or nursery stock.  I would agree with Jef that easy credit can lead to land speculation, but this has mainly been done by farmers themselves because they got bank credit or happened to be cash rich and thought they could get richer.  And there has long been a tension within farmers--they want land cheap or rent cheap when they are young and getting started, then they want land prices high and rents high as they get near retirement and want to cash out or stop farming and collect rents.  What this has done is made farmland far too expensive for young farmers and now we have this demographic and generation gap that needs bridging.  There may be several ways to do this and I would claim that Farmland LP is only one of these ways.  

 

Lastly, for now, Jef appears to lump Farmland LP with all the bad money out there, such as Wall Street crooks and those who put profits above people and the planet.  I am vehemently against the things he is against, so this is an odd critique.  Still, I do live in a capitalist system and decided to use that in what I believe is a creative and ethical way.  If Jef is against any funds or financial vehicles being used to buy farmland then he does have a lot to worry about.  There are indeed large pension funds and investment groups in the area buying farmland.  All of these are far, far larger than Farmland LP and none of them are interested in sustainable agriculture and local food systems.  

Comment by Katherine Cleland on February 7, 2011 at 12:06pm
We could at least have a meeting and invite the WAC investors Past and Present...has that been done, and I missed it?  Everyone has a different personal investing profile...and what may not win at WAC could be quite interesting to a few investors...
Comment by Jef Jelten on February 7, 2011 at 3:34pm

I am not going to get into it here. I stand by my earlier comment.

 

I will say that I made it very clear that I am against Farmland LP not Jason.

 

Also jason is being disenginious by implying that the farmers are to blame for getting into debt during boom times. This has been parsed by many others smarter than I but suffice it to say they were making exactly the right decisions at the time and were encouraged by all entities in ag.

 

Also Jasons comment;

 

"And there has long been a tension within farmers--they want land cheap or rent cheap when they are young and getting started, then they want land prices high and rents high as they get near retirement and want to cash out or stop farming and collect rents."

 

I again a complete misrepresentation of the situation and disparages farmers with a broad stroke. Simply not true. Thats two times in one comment that Jason attempts to make farmers look bad. I know a lot of these farmers and the term Family Farm means everything to them. There is a wave of interest in the next generation in these family farms stepping up and embracing sustainable agriculture. They have the support and experience of the older generations behind them. They are close knit and willing to work as a Co-operative, something that goes against everything Farmland LP is structured for.

 

And last, I am not necessarily lumping Farmland LP with "wall street crooks" just stating the fact that there is ungodly amounts of ill gotten gains sloshing around, much of it out of tax dollars, looking for a way to hide or get lock in to something real before the "Claw Back" gains more momentum.

 

Thats all I will say and if any wish to speak to me about this or other local food related topics they can contact me direct.

Comment by William Ray Ford on February 7, 2011 at 4:01pm
Well, thank you all for your comments and positions. We even gained a member to Slow Money in the process. I like Katherine's idea of a physical forum to discuss local investing. A couple of other folks have talked about this over the past couple of years and is one of the reasons I used the WiN site with the groups concept to promote Slow Money.....it is time for us to think creatively about how our wealth is generated, invested and past on.  Next steps????? Jason, did you send Biff some info or do you authorize me to do so?
Comment by Biff Traber on February 7, 2011 at 4:21pm

Bill, thanks for the reminder about Farmland LP info.

Also, I like the idea of a meeting to discuss local investing or to have a Farmland LP presentation to a group like WAC investors. This would have a specific topic upfront with the opportunity to discuss the broader subject of local investing.

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