Transition finance is key to help many more farmers and growers start the transition to organic and regenerative. The Perennial Fund is going to experiment with a new concept!
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- The Perennial Fund invests $75-150 per acre per year into the farm
- For 3 years to transition to organic
- In exchange for a 10-25% net profit share after they’re certified organic
- Until 1.5x the initial investment is returned
The per acre investment amount is determined by the overall capital needed to facilitate a successful organic transition. Farmers do not pay back the fund until they are making net profits.
The expected IRR is 9% over 10 years, though successful payback is conservatively expected to take 5 years. If the investment is not repaid at 1.5x after 10 years, the remaining amount owed will be forgiven.
A key piece is the market access, Pipeline foods (we have interviewed Eric earlier) buys the crops in the 3 year transition and provides a long term off take agreement for the organic crops
https://soundcloud.com/investinginregenerativeagriculture/35-interview-eric-jackson
https://soundcloud.com/investinginregenerativeagriculture/53-eric-jackson
https://www.madagriculture.org/
If you want to know more get in touch through the website:
https://www.theperennialfund.com/
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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