Fair Food Fund

Fair Food Network is developing the Fair Food Fund to invest in enterprises that connect sustainable New England farms with the growing demand for local/regional, sustainably-produced food. In doing so, our goal is to enhance the financial viability of small and medium-sized New England farms.

The Situation

• The environmental, social, and economic consequences of our current, broken food system are well documented.
• Consumer demand for locally- and sustainably-produced food is increasing rapidly, but expansion of regional food systems requires the infrastructure needed to move products from farmers to consumers.
• Direct farmer-to-consumer food sales account for less than 1% of total agricultural sales, meaning we cannot ignore the other infrastructure enterprises such as aggregators, distributors, and processors that connect farms to consumers in the vast majority of transactions.

The Opportunity

• To supply funding and technical assistance for development of the regional food infrastructure needed to improve the long-term financial viability of small and medium sized family farmers.
• To explore the use of a variety of investment types, including loans, equity, and near-equity (e.g., convertible loans) to help fair food infrastructure enterprises thrive.
• To create partnerships with government agencies, impact investors, non-profits, and enterprises which have an interest in growing a healthy, sustainable New England food system.

Background

New England is a region of rich agricultural tradition, but as our food system has become more globalized and concentrated, the area’s food infrastructure has diminished. At the same time, many of us are realizing the importance of developing strong local and regional food systems for the sake of our economy, our communities, our natural environment, and our personal health. This sentiment is reflected nationally in the exploding consumer demand for locally- and sustainably-produced food, as illustrated by the rapid proliferation of farmers’ markets and CSA programs over the past two decades. The number of farmers’ markets nationwide has more than quadrupled since 1994, currently numbering7,100, and the number of CSAs has increased even more dramatically, from just a few hundred in the early 1990s to more than 12,500.

Yet direct farm-to-consumer food sales account for less than 1% of total agricultural sales, meaning that farms sell the vast majority of their products to processors, distributors, retailers, restaurants, institutions, and other entities before those products find their way to consumers’ plates. For farmers who cannot take advantage of the direct sales approach, their only option for economic viability is to sell their products via wholesale channels. The Fair Food Fund seeks to support creation and expansion of such enterprises that can benefit both New England farmers and the consumers who want what these farmers produce.

Moving Forward

Currently, the Fair Food Fund is in the planning and development stage. As part of the planning process, we are reaching out to stakeholders to gain a better understanding of the current challenges, needs, and opportunities in the New England food system. The insight gained from this research is being used to inform the fund’s business plan. We look forward to providing updates on the Fair Food Fund’s development in the spring of 2012.