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When incubating small farm businesses, myriad challenges facing farmers are daunting and the solutions are complex. The challenge is not only advancing social and racial equity, but also generating financial equity for participants in the program.
The vision for farmers operating in Pie Ranch and its Regenerator at Cascade Ranch in San Mateo County is for the farms to manage 10-20 acres and foster collaboration among tenants, such as intercropping flowers with food crops. Leonard Diggs believes that operating at a scale around 20 acres is both impactful for the community and for the ability to economically viable businesses.
“Pie Ranch centers its work around social justice, considering things that are not always acted on as clearly and intentionally as other entities,” Leonard explains. As he helped create the program, he wondered, “How can they [gain equity] from the get-go?”
By working with FarmLink’s Investment Notes program, one solution is that a 20% portion of program fees paid by the farmers, such as rent for land and housing, equipment, and irrigation, are set aside in FarmLink’s loan fund as financial equity. The farmers will receive it in a lump sum when departing the program.
Building equity
With an opportunity to access 418 acres near its headquarters in “coastside” San Mateo County, Pie Ranch secured a long-term lease with a vision to create what is now a farm incubator, the Regenerator at Cascade Ranch.
With more than 30 years’ experience in California agriculture, Leonard Diggs was chosen to lead the program in a new role at Pie Ranch, Director of Farmer & Rancher Opportunities. It was not long after that he sparked an idea for deepening Pie Ranch’s long standing partnership with California FarmLink.
Leonard wanted to create the means for farmers to build access to credit, qualify for loans, and one day, potentially, to buy land. “Right from the beginning, it was obvious that farmers needed to develop some capital,” Leonard reflected, “...a modest amount that they might save while they're in the program.”
It was at a meeting convened by a common funder that Leonard and Reggie Knox, FarmLink’s CEO, discovered an option to expand our collaboration. When Leonard heard an update about the FarmLink Investment Notes, he envisioned a solution for the Regenerator farmers: Could Pie Ranch invest in FarmLink’s loan fund supporting other farmers?
It was not long before Pie Ranch invested a portion of the farmers’ capital in an Investment Note, the second nonprofit to do so. On behalf of FarmLink, Gary Peterson, Director of Communications and Philanthropy, met with the Cascade Ranch farmers to discuss their roles in supporting affordable farm loans. The Investment Notes enable social impact investors to support the loan fund without having to be an “accredited investor,” which requires a net worth exceeding $1 million, not including housing, or more than $200K annual income as an individual.
In 2018, FarmLink created the Notes as an opportunity for more Californians to be part of our mission-based lending. With the assistance of the Sustainable Economies Law Center, we made it happen with a state-licensed Direct Public Offering. At the time we didn’t foresee how the Notes could help farmers of color and beginning farmers be part of supporting access to fair and affordable capital for their peers.
Challenges facing coastal growers
Among myriad challenges, “Finding affordable housing in the region, whether it's on a farm or near farms, is a big deal. And it's come home to roost this year for the farmers and for us,” Leonard explained. In coastal areas where potentially lucrative crops, such as strawberries, can produce over a very long season, the shortage of affordable housing is acute.
California’s overall affordable housing crisis contributes to the stresses that agricultural communities face statewide. But in coastal San Mateo County it took a tragic turn: It’s believed that housing stress contributed to the January 2023 mass shootings, which took seven lives, on mushroom farms in Half Moon Bay. Pie Ranch is aiming to build a shared housing project to help alleviate housing needs, and working with local agencies to find or create more housing opportunities.
At California FarmLink, we’re pleased to partner with Pie Ranch to support the farmers’ equity building. We’ve also commissioned a research project to help inform the development of farmworker (and farmer) housing loans. We have the ability to make housing loans, but land use and permitting processes are highly complex, including factors like zoning, water, and septic. But together with partners like Pie Ranch we stay informed about people’s experiences.
If you’re interested in the FarmLink Investment Notes, inquire here to get the Offering Memorandum, and if you want to build on-farm housing or learn more about FarmLink’s housing loans, get in touch by email.
