Vermont Farmers Keep Business Local

Posted November 13th, 2008 in the Food First web site

By Kurt Eulau

In the wake of decades of homogenized corporate agriculture, and as the consequences of large agribusinesses have been more fully gauged, localized food systems have been brought center stage to help combat the industrial mode of food production so prevalent in our times. All around the world, from community gardens in Chicago to local food systems research done by Navdanya International/RFSTE in India, people are beginning to focus on localized food systems as a more equitable and efficient alternative to years of big business agriculture. In an article published by the New York Times in October of this year, the community of Hardwick, Vermont was highlighted as an example of a successful and emerging localized food system.[1] The organic growers and farmers of Hardwick have managed to promote a food system in which profitable agricultural economic activity has been grounded in a local environmental and social framework. In doing so, the farmers and processors of Hardwick have created new avenues of community-based economic development and alternative methods of raising capital.

One of these new avenues for development includes a novel venture to assist smaller, community-centered agribusinesses– an agricultural eco-industrial park. The project began as a handful of Hardwick farmers created the Center for an Agricultural Economy in an effort to challenge the dominant model of food production in the United States. Mr. Meyer, a Hardwick organic soy farmer and a founder of CAE, reported to the New York Times that “I recognize that if Vermont is going to have a future in agriculture we need to look at what works in Vermont, and that is not commodity agriculture.”[1] Banding together, these farmers saw an already existing technology, namely that of an industrial park, and decided to tailor the concept to be more environmentally friendly and community oriented. According to the center, the park allows “businesses to cooperate with each other and with the local community in an attempt to reduce waste and pollution, efficiently share resources (such as information, materials, water, energy, infrastructure and natural resources), and increase economic gains and improve environmental quality to help achieve sustainable development.”[2] By citing a need and adapting existing technologies, the farmers of Hardwick have found a way to improve their business and community and more fully protect the environment.

Just as innovative, however, are the ways in which this relatively small group of farmers has been able to finance their operations, turning to farmer to farmer lending and funding from a social and environmentally conscious investment group, Investor’s Circle. While the inter-farmer lending taking place in Hardwick cannot be labeled as microfinance, it shares many of the same characteristics. Operating on honesty and trust to gain access to credit outside formal credit markets, farmers in Hardwick have lent over $300,000 to each other at lower than market rates to help develop their businesses.[1] Another major source of funding has come from Investor’s Circle, an organization of venture capitalists with a mission to strategically use “patient capital.” To Investor’s Circle, “patient capital investors recognize that the transition to sustainability requires more than investing in tomorrow’s breakthrough technologies and extraordinary growth companies…It requires investing in companies that support organic agriculture.” To date, Investor’s Circle has lent over $18 million to organic farmers and companies that have borrowed from the group have demonstrated growth rates between 5% -14%.[3]

The local movement taking place in Hardwick certainly brings hope that Americans can shed the past production food practices that have been instituted over the last several decades. By adapting already conceived production techniques, such as industrial parks, and gearing them towards sustainable and local economic development, Hardwick farmers have added to the growing movement to change the way Americans eat and produce. Additionally, by introducing farmer to farmer lending and utilizing socially and environmentally conscious investment opportunities, the agricultural community of Hardwick has shown potential avenues for capital raising that do not lower consumer or producer welfare, or the ecological security of the region. All told, the Center for an Agricultural Economy and the various local organic agricultural enterprises currently operating in Hardwick promote a viable solution to the myriad of problems surrounding our current globalized food system: the challenge will be to see if their model can be replicated elsewhere.
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1. Burros, M., Uniting Around Food to Save an Ailing Town in New York Times. 2008: New York, New York.
2. Hardwick Area Eco-Industrial Park. Accessed 17 October 2008; Available from: http://www.hardwickagriculture.org/industrialpark.html.
3. Steven Carden, O.D. (2004) A Halo for Angel Investors. The McKinsey Quartley.