Investment funds for sustainable agriculture ready for distribution

Will Hughes feels optimistic about a new Sustainable Agriculture Loan Program through Forward Community Investments, where he serves as vice president of lending services.

“It is exciting to see interest in sustainable agriculture projects,” said Hughes. “And there is just so much happening in local, sustainable, organic, and food in general. [It’s] difficult to be anything but hopeful.”

Forward Community Investments (FCI), a Madison-based community loan fund that provides loans to non-profits and cooperatives serving low and moderate income communities, introduced the Sustainable Agriculture Loan Program (SALP) this past fall.

The SALP was created to specifically assist in the growth, development, and advancement of non-profits that support sustainable agriculture, which refers to food production that maintains the long-term productivity of the land

Unlike mainstream agriculture, the sustainable practice utilizes several techniques that preserve the environment and natural richness of products including raising animals or crops without relying on toxic chemicals or seeds that are genetically modified.

“Chemical fertilizers, pesticides, herbicides, and fungicides are all required in large scale agriculture,” says Tera Johnson, founder of Wisconsin Specialty Protein, LLC which produces the nationally distributed product Tera’s Whey.

“Seeds [that] have been genetically modified so they can no longer naturally reproduce…often require more water than traditional varieties, and [lose] the natural resiliency that comes from having a range of genetic variety,” she said.

Johnson knows a thing or two about sustainable agriculture as she built the nation’s first eco-friendly plant that processes whey from organic cow proteins and hormone-free goat proteins directly from Wisconsin’s artisan cheese makers.

Wisconsin Specialty Protein receives financing through the Baraboo National Bank. But Johnson is a staunch supporter of the Sustainable Agriculture Loan Program and understands the difficulties sustainable farms face.

“[Sustainable] practices [are] producing foods that consumers increasingly value, so much so that supply constraints are often the biggest impediment to company growth,” Johnson said. “Put more simply, demand often outstrips supply for these products.”

Johnson went onto to say one of the primary reasons for this problem “is the difficulties that sustainable farm and small local processing businesses face in accessing capital” and the lack of money has contributed to creating the “enormous global capital market that has proven to be as unsustainable as global commodity agriculture.”

Will Hughes, vice president of FCI lending services, agrees with Johnson.

 “The challenges are similar to financing all fledgling start-ups or early stage benefits – too little cash,” Hughes said. “FCI sees the SALP as way to broaden its scope of lending [and] do good by providing credit that is difficult to obtain.”

The loan program has a $5 million pool of funds, offering loans from $5,000 to $750,000, with consideration given to projects up to $1 million. Terms can be up to five years (minimum is one year) with flexible payment periods, and interest rates that adjust periodically.

The loan program seems to have made a productive start with attention from investors, although no loans have been distributed yet.

“We have about a dozen good leads for loans,” Hughes said, “and despite no formal applications, the pipeline is going to fill up fast.”

The early potential of the loan program has made FCI optimistic about the future of those involved in sustainable agriculture.

Hughes said, “The sustainable agricultural community is extremely vibrant and innovative so their future is bright.”