Slow Money movement spreads north to Canada

When Mary Ellen and Andreas Grueneberg started their small artisanal farm in Leduc, Alberta, over a decade ago, they knew they were heading into a field that requires hard work. The keen growers of organic produce and poultry knew a lot of their time and energy would be spent trying to secure funding to operate from year to year -- money that has proven to be as hard to source as the most exotic edible flowers.

"We're on 10 acres and are considered an acreage," Mary Ellen Grueneberg says on the line from her farm, called Greens, Eggs and Ham. "Financing for agricultural use on 10 acres is practically impossible. You can't get $10,000 to raise a flock of ducks that will be sold in two months. Every year, there are four to five [small farms] in Alberta that go under or give up ... You can't exist without capital."

The Gruenebergs are trying a new tack to grow their business. And in doing so, the founders of Slow Money Alberta are not only rethinking the way the food and finance sectors function but they have also joined a movement that's gaining momentum around the globe.

What is the Slow Money movement?

Slow Money, which was founded by former entrepreneur Woody Tasch in 2008, is aimed at rebuilding the economy from the ground up — literally -- by having people invest small amounts of money into farms and local food systems. It's not about the get-rich-quick schemes we've become so motivated (and disillusioned) by but rather about accepting smaller returns in exchange for sustainability.

Just as the Slow Food movement has taken off, Slow Money is attracting those who want to know exactly where their investment dollars are going and how they're being used at a time when mass-produced food systems have left small farms struggling to survive and preservative- and pesticide-laden items have become the norm.

At Greens, Eggs and Ham, investors get a credit, including a modest interest rate, all calculated in food. On other farms, returns might be in cash with an interest rate of around 3 per cent or higher, but regulations vary from province to province and state to state.

"If people want food that's locally produced, sustainable, and more organically and more conscientiously produced than [food from] large scale producers, we really need support," Grueneberg says. "We need to make it more friendly for people to invest.

"The way it sits currently is that the only people who can invest in a farm as a conventional investment are accredited investors," she adds. "Accredited investors usually invest over $100,000 at a time. Anyone who wants to invest $20 a week or something can't. You can only donate--which is odd, because it's the little person who's going to want some money routinely going into local food."

On the line from his Boulder, Colorado office, Tasch, who's worked as an entrepreneur, venture capitalist, and consultant for various environmental-, health-, food- and sustainability-related organizations as well as angel investors' groups, says that if money makes the world go 'round, it's time for a change in direction. He's long been interested in channelling the flow of investment capital to small food enterprises and promoting fiduciary responsibility that supports sustainable agriculture.

"Ever since I was a young adult, it seemed to me there was a collision course lying ahead between human impacts and life on the planet," Tasch says.

"As I learned about venture capital and, later, philanthropy and social investing, along with hearing about the different fears in our financial world, it came to me that maybe all the innovations we're trying to come up with that had social and environmental bells and whistles on them were always going around the margins of really fundamental questions, like: Is too much consumerism a bad thing? Is too much industrialization a bad thing? Is buy low/sell high the only way we can organize our economic lives and hope for a good outcome?"

The author of Inquiries Into the Nature of Slow Money— Investing as if Food, Farms and Fertility Mattered, notes that Slow Food members pledge to abide by a series of principles to "enhance food security, food safety and food access; improve nutrition and health; promote cultural, ecological and economic diversity; and accelerate the transition from an economy based on extraction and consumption to an economy based on preservation and restoration".

Slow Money building momentum

One of those principles is to learn to invest as if food, farms and fertility mattered, thereby connecting investors to the places where they live.

Tasch says interest in Slow Money is growing, with several chapters in place across the United States and others starting to spring up in Canada and abroad

"It is clear to me after last the three years running around talking about this and building a network that there are millions of people who are fundamentally disgruntled, afraid, and disgusted... with the excesses of globalization, the excesses of Wall Street, the dysfunction in government centres, and wishing they could take their money out of all that and do something else with that...and so we're saying here's one thing we can start to to together.

"With Slow Money, it's tangible and there's immediate impact, but we just don't know how much money we're going to make."

That's where the question of how much risk is involved comes in.

"Nine out of 10 traditional investment advisors would say this is too risky, that you can't invest in farms, restaurants, seed companies, creameries," Tasch says. "Those of us who are starting to do it say, 'well, if you look at your whole portfolio and try to find figure out risk-return parameters within the different pieces of it, many of us suspect or believe that diversification isn't really working anymore.'

"You have all these paper things made to look different, but it's all the same ultimate volatility and it's all subject to the same kind of craziness. So once you get to that conclusion, you say 'I don't know if it's risky or it's not risky, but it would feel good to take a little of our money out of that and do something fundamentally different. We all want more farms, we all want more fertility in the soil, we want good food in our schools; what if we invested our money in some of that?"

Tasch acknowledges that there are logistical challenges for those like the Gruenebergs when it comes to cutting through red tape and securities regulations.

However, since his organization got started, it's completed 140 deals totalling US$20 million. And if people wonder if it's too risky to invest in farms, Tasch questions how risky it is not to.

"We're seeing local food systems be restored," he says. "We have to take the money and invest in food systems in a way where we're willing to relax our previous notions of risk and return. The farms need capital, creameries have to be built; and if we just sit back and focus on profit maximizing ... we will never put our money to work."