Impact Profile: Iroquois Valley Farmland Rooted in Regeneration Notes

Justin Butts, farmer at Black Wind Farm (New York) – photo by Courtney Yates

Iroquois Valley Farmland REIT was founded in 2007 with a mission to expand the amount of organic farmland across the United States by addressing one of the most significant barriers:  farmers’ access to patient capital. The firm issues promissory notes to offer investors a fixed-income security that supports organic farmers. To date, it has made more than $115 million in organic farmland investments — including mortgage financing — totaling more than 32,000 acres on 70 farms in 20 states. Iroquois Valley is a Public Benefit Corporation and a Certified B Corporation.

In its early years, only accredited investors could invest in Iroquois Valley through an equity offering. In 2019, Iroquois Valley opened equity ownership to non-accredited investors to grow and democratize its pool of investors.

Iroquois Valley expanded its options for accredited investors in 2016 with the launch of its Soil Restoration Notes program. The Notes program includes direct financial support for farmers in the portfolio who are going through the three-year transition period necessary to convert a conventional piece of farmland to organic.

Addressing Farmland Access for Farmers of Color

Recently, Iroquois Valley has sharpened its focus on farmland access for BIPOC farmers. Since 1920, the number of Black farmers has declined by more than 96%. The biggest challenge for young and Black, Indigenous, and other People of Color (BIPOC) farmers is the cost of farmland and access to capital in a financial system with a history of discrimination. 

A 2022 National Young Farmers Coalition Survey found:

• Well over half of Black and young BIPOC farmers said accessing capital is “very or extremely challenging.”
• 75% of young Black farmers said they need more access to land.
• 87% of young BIPOC farmers said their motivation is stewardship and regeneration of natural resources.

In addition to land security and access to finance, farmers practicing regenerative agriculture face other barriers to establishing and expanding their farms. Those challenges include finding financial support during the required three-year transition period to organic, gaining stable access to markets for distribution, accessing a consistent flow of organic industry-specific data, and securing long-term commitments and risk-sharing by financial partners.

Seeding a Pool of Patient Capital to Address Barriers to Access

Iroquois Valley’s Rooted in Regeneration (RnR) Notes offering is its first formal initiative to support farmland ownership for socially disadvantaged farmers (as defined by the USDA) with a focus on BIPOC farmers.

By creating RnR, a specialized and reparative investment product focused solely on supporting land tenure for socially disadvantaged farmers, Iroquois Valley can help mitigate the financing and land access challenges faced by BIPOC farmers, who are overwhelmingly using organic and regenerative practices.

“Socially disadvantaged farmers represent 4.5% of all farmers in the U.S. in 2017, compared to 13.3% in 1900. According to the World Wildlife Foundation, Indigenous people comprise less than 5% of the world population but protect 80% of the Earth’s biodiversity in the forests, deserts, grasslands, and marine environments in which they have lived for centuries. We are proud to expand our support for borrowers through specialized and reparative products.” — Iroquois Valley

To develop RnR, Iroquois Valley sought guidance and involvement from BIPOC-led organizations and the farmers they serve, who have long been combating these obstacles with limited resources. The collaboration has resulted in a financial product structured to benefit historically excluded and unrepresented farmers, respond to their needs, and support their transition to organic farming and land conservation.

Borrower Notes and Highlights

Iroquois Valley seeks to generate financial, social, and environmental investor returns. Iroquois Valley monitors a variety of factors to measure how it participates and operates in a financial system with a history of discrimination. 

These factors include: 

• The percentage of the Iroquois Valley portfolio composed of BIPOC farmers (currently 11%)
• Representation of socially disadvantaged farmers as a percentage of all U.S. farmers
• The number of BIPOC farmers kept on the land
• The number of marginalized farmers who have successfully transitioned from conventional to regenerative practices
• The number of farmers who have attained stable and profitable businesses

Investors will receive a fixed rate of return, with a portion of the stated interest on the Notes funding the RnR Pool. The RnR Pool will be used to provide discount mortgage interest rates for BIPOC farmers engaged in conservation practices. Iroquois Valley provides organic and regenerative farmers with land security and working capital through long-term leases, mortgages, and operating lines of credit. 

Learn more about the regenerative farmers, including BIPOC farmers, supported by Iroquois Valley!