CIGP’s first regenerative agriculture climate guarantee will unlock capital and technical assistance for farmers and food system entrepreneurs who have historically lacked access to capital, including low-income, BIPOC, female, immigrant, or indigenous entrepreneurs.
Richmond, VA – Today, Community Investment Guarantee Pool (CIGP) announced a $500,000 guarantee to Foodshed Capital (FoodCap), an emerging nonprofit CDFI serving primarily the mid-Atlantic region. The guarantee will enable increased capital access and technical assistance for farmers and food system entrepreneurs who have historically lacked access to capital for agriculture enterprises, particularly low-income, BIPOC (Black, Indigenous, and people of color), female, and immigrant entrepreneurs. FoodCap prioritizes farms that use regenerative practices, foster soil health and biodiversity, and produce nutrient-dense, culturally appropriate food for their foodsheds. Their unique products include 0% interest loans available to Black farmers without the requirement of a personal guarantee.
“As a regenerative agricultural lender, Foodshed Capital plays an essential role in the multi-pronged solution to climate change mitigation,” said Jim Baek, CIGP Executive Director. “Moreover, FoodCap specifically focuses its lending and business support services on those farmers and food system entrepreneurs who have historically had difficulty accessing capital for agriculture enterprises. FoodCap is a community lender that believes in equitable access to capital, and CIGP is proud to partner with them as they work to expand their agricultural lending across diverse communities.”
Launched in 2019, CIGP is a first-of-its-kind platform that compiles guarantee commitments from a wide-reaching coalition of mission-minded investors and pools those commitments into one entity to support projects that help communities flourish and strengthen economies. This is CIGP’s first climate guarantee that focuses on land use and carbon sequestration as a climate change mitigant. FoodCap is transitioning from a micro-lender to a larger small business agricultural lender, as it more than doubles its maximum loan size with the support of this CIGP guarantee.
There are approximately 967,000 crop farms in the United States, roughly 98% of which are family-owned. The average crop farm has two employees and generates about $190,000 in annual revenue, and over 45% of employees are family members. Currently, in the U.S., less than 1% of all regenerative, organic, and/or sustainable farms are BIPOC and/or women-owned. Additionally, the number of farms in the country has been trending downward while farm size has been trending upward for decades. The low per-acre value of crops, coupled with more rapidly rising expenses, is forcing small farms out of business.
“There is a crucial need for affordable capital in the small-scale farming world,” said Michael Reilly, Executive Director and Co-Founder at FoodCap. “Small farmers—particularly farmers of color—do not have equitable access to the capital and business resources they need to survive and thrive. We’re enormously proud of the impact we’ve made in just five years, but many barriers to success remain for regenerative farmers and food entrepreneurs. This guarantee will enable us to expand our agricultural lending and customized business support, with the goal of building genuine equity into our regional foodsheds.”
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