Impact investors flock to sustainable agriculture

Tuesday, October 24, 2017

Massive venture capital investments in food make for a steady stream of splashy, dramatic headlines.

Juicero raises $120 million; reporters discover you can “juice” their product without the help of the $400 machine. Hampton Creek raises $220 million; board members bolt after a series of scandals. Blue Apron raises $200 million; its IPO performs terribly.

But behind this high-profile obsession with the Next Big Thing, a number of impact investors are also raising capital for other types of food and agriculture projects that they believe have the potential to fix a broken food system.

A growing number of investment companies in this realm are using capital to help ranchers switch to 100 percent grass-fed beef production, connect small farms to communities with little access to fresh food and transition farmland used to grow commodity corn and soy to organic, regenerative systems.

“There’s total momentum right now around people rethinking about how their money is being put to work,” said Kate Danaher, senior manager of social enterprise lending and integrated capital at RSF Social Finance. “Impact investing as a whole is growing very quickly, and my guess is that if you polled everyone interested, the most popular sector is sustainable food and ag.”

In fact, according to the Global Impact Investing Network’s most recent survey (PDF), 63 percent of impact investors said they were putting their dollars into food and agriculture, and impact investment in the sector has grown at an annual rate of 32.5 percent since 2013.

Those in the space say capital is what sustainable agriculture needs in order to scale up. But critics warn that the money comes with risks, when the priority is ROI and corporate ownership of farmland becomes the norm. “Agriculture is a whole culture of how to work with the earth,” said Anuradha Mittal, executive director of the Oakland Institute, which looks critically at land and agriculture investments around the globe. “When it’s driven by profit, it can be very dangerous.”

Photo courtesy of Maria Fleischmann.

Source: GreenBiz (link opens in a new window)

Agriculture, Investing
impact investing, venture capital