How Organic Insider operates: We accept no advertising, we have no paywalls and we make our newsletters free to everyone because vital information about our industry needs to get out to as many people as possible. Please consider supporting our work, whether you are an individual or a company. Thank you so much.
Bankers in the agricultural sector understand conventional farming. So, when it comes to navigating the special requirements of an organic farm, it is a paradigm that is not familiar to them.
As a result, this makes it much more difficult for U.S. organic farmers to access credit, which, in turn, creates real obstacles to grow organic production in the domestic market.
“We are not asking for handouts but need to be able to tap into credit lines to successfully manage our business and navigate the three-year transition period,” said Kristina Walker of StarWalker Organic Farms, a regenerative organic farm in California. “Traditional agricultural lenders, primarily versed in conventional and GMO crops like soy and corn, struggle to grasp the unique requirements of organic farming. This gap in understanding makes securing necessary financial support a daunting task for organic farmers.”
Well aware of this problem and also deeply committed to building a long-term regenerative organic supply chain in the U.S., Map Capital is targeting a $50M fund to address this exact issue.
“We understand the process of farmers transitioning to organic, and we back high-quality operators and help them reach the other side,” said Brandon Welch, co-founder and CEO of the specialty finance company. “Once they make it to organic, they have increased profit margins and can pay off the debt. Our financing stack is structured in a way that takes all of this into account.”
In addition to making real estate-backed and equipment loans, the firm is uniquely positioned in other ways, such as giving farmers access to its sister company, Mad Agriculture, which provides market and technical expertise.
Geographically, the firm is focused on mid to large-sized farms in the Midwest and Upper Great Plains, with the goal of making “landscape-level” change and influencing millions of acres.
“Most of agriculture is highly extractive. We are looking to work with farmers who want to regenerate the land,” said Brandon Welch.
Despite the fact that the firm does zero advertising, Mad Capital has a $100M backlog of deals in the pipeline, all through word of mouth or referrals, validating the intense need from organic farmers for this type of financing.
Investors seem to be responding as well.
With a targeted goal of $50M for this fund, Perennial Fund II, the firm has already closed two tranches and is actively deploying capital to farmers. Furthermore, it has attracted interest from some blue-chip names, securing early commitments from The Rockefeller Foundation, impact investment platform Builders Vision, the Schmidt Family Foundation and many others.
U.S. PRODUCTION NEEDS TO BE AN INDUSTRY PRIORITY
Organic farmland in the U.S. accounts for less than 1% of overall acreage, yet organic is comprised of approximately 6% of the overall food industry. This makes us dangerously reliant on foreign countries, especially perilous when fraudulent organic grains have historically been a major issue. (It goes without saying that the U.S. should be a net exporter of organic corn and soy, but we are not.)
That being said, efforts to grow U.S. organic production are being made.
The USDA’s Transition to Organic Partnership Program is investing up to $100 million over five years to fund technical assistance and wrap-around support for transitioning and existing organic farmers. In the private sector, Rodale Institute, Mad Agriculture and other organizations are also providing key technical support for those farmers who want to go organic.
However, two key things stand in the way.
First, the USDA is not enforcing the rules, thereby creating a situation that when farmers do enter the organic space, they may not receive the premiums in the marketplace they had been expecting. This includes allowing hydroponics in organic and turning a blind eye to organic factory farms, both of which artificially suppress the prices of goods, such as organic milk, eggs, berries and tomatoes. As a result, this makes it very difficult for small family farms, who are following the letter and spirit of the law, to compete fairly and stay in business.
Second, organic farmers must have access to credit, just like their counterparts in the conventional and GMO space.
“For the organic industry to not only survive but thrive, and to reassert the United States as a bastion of domestic organic production, the integration of specialized financial entities like Mad Capital is non-negotiable,” put forth Kristina Walker of StarWalker Organic Farms. “Their involvement has been transformative for us.”
 |
With gratitude, 
Max Goldberg, Founder |
After having filed a legal complaint against CCOF, OrganicEye is now targeting a second organic certifier for improprieties, alleging that Oregon Tilth has received contributions, conference sponsorships and other payments over and above certification fees from operations that it oversees.
While the country claims that it is doing this because an alternative has not been found yet, the real reason could be undue pressure from the U.S., who is fighting mightily against the ban.
This GMO hemp variety is designed to have higher levels of the cannabinoid CBG.
SEMCAP Food & Nutrition has invested $68 million of secondary capital to buy out early angel investors and take a significant minority stake in the organic plant protein brand.
A recent study has been making the rounds on the internet lately blaming organic farms for an increase in nearby pesticide use -- without explaining the nuance and not looking at the harm created by spraying toxic chemicals.
A growing body of research links nitrate and pesticides to some types of cancer.
As the agrichemical giant lays groundwork to fend off Roundup litigation, its use of a playbook for building influence in farm state legislatures has the dangerous potential to benefit pesticide companies nationwide.
Organic imports are growing much faster than what we are sending to other countries.
Farm protests are changing not only Europe’s food system but also its politics.
Want to share this newsletter on social media? You can use this link: Newsletter Link
