|In this Friday, Sept. 12, 2014 photo, Angie Trombley carries a crate of Islanders, purple-colored heirloom peppers, grown in a caterpillar-style greenhouse at the Squire Tarbox Farm on Westport Island, Maine. The farm received a loan for the greenhouse through a national movement called Slow Money, which links investors with entrepreneurs to build local food systems and economies. (AP Photo/Robert F. Bukaty)|
MONTPELIER, Vt. (AP) — Consumers who want to support local foodand farms aren't limited anymore to buying locally produced veggies, meats and cheeses. They can make direct investments big or small into localfoodbusinesses through a national movement called Slow Money, which links investors with farmers and smallfoodproducers.
Since the national network started in 2010, Slow Money networks and investment clubs around the country, including in Maine, Massachusetts, California, North Carolina, and in cities like Boston and New York, have made a total of $38 million in investments in 350 small food enterprises. Vermont — which has a vibrant local foods scene — is about to launch its own network on Tuesday.
The idea is to take "a little bit of our money out of the abstract craziness of the stock market" and instead put it to work closer to home, said Slow Money founder Woody Tasch, of Boulder, Colorado.
The investment movement started after Tasch wrote his 2009 book "Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered" discussing investments that focus more on sustainability than consumption. The foreword was written by Slow Food International founder Carlo Petrini, who started a movement to counter fast-food lifestyles by focusing on home cooking with local, sustainable ingredients.
Many of the Slow Money chapters organize events where entrepreneurs put on presentations to investors. Then the interested investors deal directly with the businesses.
"If you invest, and make a small loan to a small farmer near where you live, you don't need somebody else to explain to you what the benefits are," Tasch said. "And it's a very positive thing. It engages neighbors and people and it connects to each other and to the land."
Most of the $38 million from 1,000 funders has been in loans, such as to Tarbox Farm, in Westport Island, Maine, which needed another greenhouse to raise winter greens and heat-loving summer crops such as peppers and eggplant. Kyle DePietro and Angie Trombley thought about asking relatives or going to a bank for the money. But a Slow Money Maine coordinator learned about their need and matched the farm with an investor, who loaned them $5,000, several years ago, at a rate of 5 percent, after visiting the farm.
"This seemed very easy. There wasn't really much to it as far as securing the funds for it," said Kyle DePietro, who said they have since paid off the loan.
When the farm needed to buy a box truck this spring, they went directly to the investor and took out a $10,000 loan for two years.
"It was cool that she was able to help us out and I think she got a lot out of lending us the money," he said. "It was a personal nice connection that I guess you wouldn't have with a bank."
This type of venture taps into some investor disenchantment with the stock market and their desire to help their local communities, said Charles Schnitzlein, the Steven Grossman endowed chair of finance at the University of Vermont.
"I look upon these sorts of ventures as positive developments in the sense that they get people involved in their communities and they get people possibly promoting better ways of doing things for the environment or keeping things local," he said.
But it's risky, he said. To be effective with Slow Money or a similar vehicle, investors must be actively involved and really understand the company that they're working with, he said.
It's not a way to get rich quick, Slow Money vice president Michael Bartner said. It's more about helping local food producers.
The organization is relatively new and it's too soon to track the return on the investments, he said.
Microfinance is used in other regions of the world, for low-income entrepreneurs and small businesses who don't have access to financial services. In Vermont, the Vermont Community Loan Fund makes loans to food and agriculture businesses.
There's already been a lot of activity in Vermont that has taken place organically over the last six or seven years because of the state's vibrant food entrepreneurship culture and interested investors, said Eric Becker, a co-founder of Slow Money Vermont, and a chief investment officer at Clean Yield, a Norwich-based investment advisory firm. But the one thing missing, is a way for individuals to directly plug into that activity without knowing someone who's been raising money, he said.
Vermont's chapter plans to put on entrepreneur showcases where a group of vetted businesses will present their business plans and interested investors can deal with them directly. Events in other places have generated not just dollars for local food providers, but social capital — leading to other forms of support like technical assistance, Becker said.
For investors who want to get their money — or at least some of it — out of Wall Street and into their local community, the new Slow Money Vermont events will be a boon.
"Slow Money is trying to create that go-to place, so that those individual investors and entrepreneurs can find each other," Becker said.