A pair of Danish environmental organizations have teamed with a local retailer to raise a fund supporting organic agriculture that they hope will serve as a model for a separate vehicle targeting institutional investors.
In September, the Danish Organic Association and Denmark’s Nature Conservation Association launched the Danish Organic Agriculture Fund, targeting DKr35 million ($5.6 million; €4.7 million) to pursue investments designed to increase the availability of organic food in the nation of 5.6 million people.
Danish Organic Association director Kim Qvist told Agri Investor that after a slow start to the fundraising soliciting minimum investments of DKr25,000, he approached Coop Denmark, a consumer goods retailer, about lowering the minimum to DKr250 and marketing investment in the fund to its shoppers as a way to express their support for the growth of organic agriculture in Denmark.
After opening the fund to public investors in mid-December, Qvist said, it raised DKr100,000 over just five days. To date, the vehicle has raised DKr29 million, according to Qvist, and inspired discussions between his organization and the Nature Conservation Association about raising another organic agriculture vehicle that would target private pensions.
“If just 10 percent of these 1.7 million people are investing in our project, we’ll be the world’s largest,” Qvist said. “It needs to be a project for everyone. Big investors and small investors.”
In addition to the popularity of organic food in Denmark, Qvist said, environmental problems coming with a dramatic expansion in pork production in recent years have also helped spark a dialogue about land stewardship that has supported fundraising among Coop shoppers. Another factor is a wider dialogue about impact investing that Qvist sees as having come about, in part, due to public reaction to the health and environmental consequences of the industrial food system.
‘Bigger and bigger and bigger’
The Danish Organic Agriculture Fund’s strategy calls for purchasing farmland and matching it with young farmers who agree to follow guidelines regarding organic production, soil maintenance and steps to limit each farm’s carbon footprint. After 10 years, farmers will be given the opportunity to buy their farms, according to Qvist.
The progress in fundraising after opening up to Coop Denmark shoppers has enabled the Danish Organic Agriculture Fund to begin investigating opportunities in local farmland markets, according to Qvist. The fund plans to work with a broker and expects to make its first purchase in February, he said.
Qvist added that his desire to expand access to farmland through the Danish Organic Agriculture Fund is informed largely by the four years he spent recently as headmaster at Denmark’s only college program devoted to organic agriculture.
“All our farms are getting bigger and bigger and bigger. They are getting so big that no one can afford to buy them,” Qvist. “I sat with young students that had a lot of optimism and ideas and were really prepared to go out and be farmers. But we couldn’t find any farms for them.”