Beetcoin: A New Way to Invest in Local Agriculture

Editor’s Note: This article originally appeared in “The Millennials Perspective” issue of Green Money Journal. Click here to view more posts in this series.

By Woody Tasch

For the past five years, Slow Money has been working along the boundaries of angel investing, impact investing and philanthropy to catalyze the flow of capital to small, organic food enterprises that are rebuilding local food systems. As the preceding sentence implies, this work takes a number of different shapes, including local networks, investment clubs, pitchfests and, very recently, our Beetcoin campaign. The campaign combines online donations with event-driven, interest-free loans to create what we hope will become a long-term, scalable funding resource deployed alongside local Slow Money investing activities.

As of mid 2014, more than $38 million has flowed into small food enterprises in the U.S., Canada, France and Switzerland, via 21 local networks and 13 investment clubs. Our first Beetcoin campaign began Oct. 1 and will end Nov. 12, at Slow Money 2014 Gathering in Louisville, Kentucky, where 21 entrepreneurs will present on stage and the top two vote-getters will share Beetcoin proceeds. (More details here.)

The overall context for Slow Money, and the introduction of Beetcoin, are described below, which is excerpted from "Commons nth: Common Sense For A Post Wall Street World," a pamphlet available free from Slow Money.

Industrial agriculture and industrial finance are two sides of the same coin

The food system is great at producing cheap, shelf-stable food, but it's equally great as a contributor to many significant systemic problems: soil erosion, carbon in the atmosphere, an obesity and diabetes pandemic, aquifer depletion, loss of biodiversity, and high costs of intermediation (less than 10 cents of every consumer food dollar gets to a farmer). The finance system is great at facilitating enormous capital flows and wealth, but it's equally great as a contributor to many fundamental systemic problems: unequal distribution of wealth, short-term thinking in the executive suite, securities that are too complex to regulate, banks that are too big to manage, and layers of intermediation that are rigged in favor of (to use the words of John Bogle, founder of the Vanguard Group, one of the world’s largest asset management firms) “the croupiers.”

We need to learn how to earn, save and invest a new kind of coin. Consider Beetcoin.

Introduced by Slow Money in September 2014, Beetcoin collects contributions and directs these funds to small, organic food enterprises, by popular vote, as 0 percent loans. The first recipients of Beetcoin proceeds will be food entrepreneurs who make presentations at Slow Money 2014: A Local and Global Gathering on Food, Investing and Culture, on Nov. 10-12 in Louisville, Kentucky. (For more information on Beetcoin and the event, go to www.slowmoney.org )

Here’s a glimpse of the kind of enterprises that have received support via Slow Money local networks and investment clubs over the past few years: Small Farmer Aaron Campbell (NC); Maine Grains (ME); Point Reyes Compost (CA): Urban Farming NGO & Revision International (CO);  Brooklyn Grange, world’s largest rooftop garden (NY), Chatham Marketplace food co-op (NC); Organic home delivery, Greenling (TX).

As evidenced by the emergence of community supported agriculture and the dramatic increase in the number of farmers markets over the past few decades, a new generation of small and mid-size organic farms is in the offing, along with the many enterprises that will bring their product to market. Yet despite robust growth, organics still accounts for only 4 percent of the food industry and organic farmland in the U.S. accounts for only 1% of total farmland. Where will the capital come from to support the next stages of structural change? It will not come, either in terms of quantity or kind, or soon enough, from Wall Street, Washington or the foundation community.

Wall Street and Washington are each dysfunctional in their own way; both are captive to top-down, industrial solutions and the influence of special interests. The foundation community has its own set of structural limitations. Organized around the provision of grants to non-profits, foundations have great difficulty moving towards mission-related investing or impact investing, and the risk/return/impact equation of small for-profit food businesses does not quite compute for them. Roughly one quarter of one percent of foundation grants go to sustainable agriculture and the amount of mission-related investing by foundations in the food sector is barely calculable as a percentage of total foundation assets.

Read Woody's complete article from the November issue of GreenMoney here:  http://bit.ly/1qh3zwj

Woody Tasch is founder and chairman of Slow Money, a nonprofit headquartered in Boulder, Colo.