The $1 quadrillion derivatives market is like the GMOs of finance, asserts Woody Tasch, author of Slow Money Journal. Derivatives enabled the ballooning of the sub-prime mortgage market, exporting greater risk for better yield (sub-prime mortgages contributed to the economic recession in 2008).
Despite all these dollars gushing through the global financial markets, small farmers and food producers are left out of the system, so they have trouble tapping into capital to grow their business or scale up. New food systems require new models of farm finance.
That’s why Slow Money, a decentralized network of nonprofits across the U.S., is raising money from the ground up to help support farmers.
In 2016, Slow Money financed 632 deals with $57 million. Now, the organization is launching a SOIL initiative that takes its efforts one step further. SOIL, or Slow Opportunities for Investing Locally, works with people who have assets and want to donate a portion of their investments to a cause they believe in. These tax-deductible donations are invested into a pot of money that in turn issues 0% loans to farmers. So far, SOIL is focused on Colorado-based initiatives, but Tasch has a vision for expanding the program nationally.
“This is about sharing risk and building community,” Tasch says. “A 0% loan is like telling a farmer, ‘I value what you do, and I’m willing to share the risk because I support you.’ This is community partnership. It’s not about the money, it’s about building community.”
Tasch quotes Paul Newman by imploring investors to think about rebuilding our economies from the ground up:
- What would the world be like if we invested 50% of our assets within 50 miles of where we live?
- What if there were a new generation of companies that gave away 50% of their profits?
- What if there were 50% more organic matter in our soil than 50 years from now?
— Kathy Ames Carr