Impact Profile: Iroquois Valley Farmland REIT (IQVF)

Iroquois Valley Farmland REIT (IQVF) is a farmland finance company that works with mission-driven investors to provide land security to organic and regenerative farmers through long-term leases (74% of total assets), mortgages (22%), and lines of credit (4%). The company has a diversified portfolio of farmland used for a variety of row crops and livestock on 60 farms in 15 states, totaling over 13,000 acres.

Over the next two decades, approximately 70% of the nation’s farmland will change hands. This transition is particularly precarious for farmers who lease their land, as the land could be sold out from under them, converted for real estate development, or sold to Big Agriculture players. Further compounding the problem is that most farmers in the U.S. are over the age of 65 and are likely to retire in the next 10 years, while young farmers face challenges acquiring land. IQVF has developed a model that helps make this transition and the expansion of current operations affordable. Over 70% of IQVF tenants are millennials.

Demand for organics has grown to 5% of all food sold, but the amount of certified organic domestic farmland has not kept pace. Certified organic farmland comprises around 1% of all American agricultural land. This shortfall is an opportunity for IQVF as well as its investors and farm partners. And whereas other real estate assets depreciate with use, certified organic farmland is one real asset that can become more productive and valuable over time as farmers improve the health of the soil.

IQVF ended 2020 in strong financial condition, with a healthy balance sheet bolstered by a record number of new investors; the company’s fundraising was up 40% from 2019. The additional capital will allow IQVF to add more assets, diversify, and scale its impact.

Environmental and social profile

IQVF is incorporated as a Public Benefit Corporation and B Corp. Last year, IQVF released its first Public Benefit Report.

The stated public benefit purpose of IQVF is enabling healthy food production, soil restoration, and water quality improvement through the establishment of secure and sustainable farmland access. The holistic approach of organic farmers focuses on repairing the relationship between agriculture and nature, increasing the long-term fertility of the land, and growing a wide variety of crops. These management approaches all prioritize the health of the soil, thereby improving the value of the asset itself over time.

Building soil health is ongoing work for organic farmers, and IQVF’s Soil Restoration Notes are designed to help with this transition time. While investors earn interest, IQVF pays 0.5% into an organic transition pool to support farmers during the transition period. Farmers can be reimbursed from the pool for soil amendments, agronomist consulting, seed costs, fencing assistance, and rental expense or mortgage interest.

IQVF is working to support more farmers of color by developing relationships with organizations led by and in support of farmers of color. IQVF has partnered with the Black Oaks Center in Pembroke Township, IL, which is working to remake their local economy through perennial agriculture. IQVF is working with the Center to develop a model for underwriting loans to Pembroke’s primarily Black farming community. In total, 5.6% of the farmers in the IQVF portfolio are racial or ethnic minorities.

The nine-member IQVF board of directors is comprised of three women, one African American, one Chinese American, three farmers (including one Iroquois Valley tenant and a fifth-generation farmer), four finance professionals, one doctor, one lawyer, and a community investment expert.