The Alchemy of Converting Economic Capital to Natural Capital: A Journey Into For-Profit Permaculture
Regenerative Earth Farms panorama
In early September 2012, Regenerative Earth Farms, a family inspired and held endeavor, was born with the close of escrow of its first farm investment as part of a strategy to help people convert their economic capital into regenerative natural capital and soil building efforts that contribute to community food resiliency, and social and ecological stability. Our first farm is ideally situated 2.5 miles from the Pacific Ocean near Santa Barbara, California and is in a unique sub-tropical/Mediterranean micro-climate for optimal growing. It is also near to an ideal consumer constituency to market the type of farm produce, added-value products and services from the farm’s multi-enterprises. How did this come about you might be asking yourself?
Orchard and market garden
Back in the summer of 2008, a dear friend and I came together to talk about her family investments that were mostly tied up in oil stocks at that point. She was having this "funny feeling" about the stock market and its inevitable volatility in these times we are in and wanted to discuss possible options of converting the economic based stock into a more stable investment strategy based on natural capital. We dreamed up all sorts of ideas involving permaculture stewardship in converting mono-crop soil extraction farms into regenerative, soil building, multi-enterprise, for-profit endeavors. As the universe would have it, the timing of the 2008 stock market crash brought our ideas to a rather quick halt when, within six weeks of our conversation, her family had already lost millions of dollars into thin air.
The conversation continued and as our experience grew, we had a better grasp of how to efficiently and effectively "flip" a farm into a profitable venture based on three primary directives: ecological, social and economic. We developed a strategy that involved the creative and consciously integrated design principles found in Permaculture, multi-enterprise development with vested entrepreneurs as project managers, direct-to-consumer marketing strategies, and a unique investment return approach that has modest returns backed by the farm and the land herself.
Canyon view of the farm
This first farm was a result of a $2.5 million dollar investment from this family. The property had to meet varied criteria for us to consider it with this investment strategy, including the following:
- Farm must have current, positive cash flow with its crops
- Must have good and reliable water sources
- Crop income must be from wholesale sales
- Near to population center with minimum of 300K people and have a portion of those people with moderate incomes
- Room for expansion of crops with cable green houses, additional market gardens
- Conducive for enterprise expansion
- Roadside sales potential
- Have some Zone 5 wild lands at its edges that could be tended and stewarded
- Have multiple living situations for people involved in the day-to-day work
- Be family friendly.
The ideal farm showed herself to us in late 2011 as real estate prices were still dropping to record lows in the Santa Barbara region. She is a 49-acre paradise with 22 acres of organic Haas avocados that inhabit a steep slope, 2 acres of Persimmons and 1 acre of Apples as its current crop production that is mostly exported through wholesale buyers. She also has about 3 acres of bottomland that is irrigated for an eventual market garden and cable houses, a creamery and all its expensive equipment for making cheese, four legal living situations and nearly endless potential.
We developed the business prospectus based on the strengths and weaknesses of this particular property. We first looked at how we could increase the soil biology and increase the efficiency of the farm by integrating living systems into the mono-cropped orchards. With the avocados, we are instigating a compost tea and mulching system on the steep slopes that work by flaking straw bales and planting understory companion plants through the flakes to hold them in between the tree rows. These bands of vegetation and mulch will serve as barriers to hold the natural leaf fall and create a protective barrier for the budding soil food web. This process alone will help to reduce root rot (phytophthora), lessen the amount of water needed for this thirsty crop, and create a supportive understory guild for the avocados. We will be testing on a small scale, at first, various understory plants like coffee, ginger, comfrey, shitaki mushrooms, guava, cardamom, dragon fruit, dill, goji, cilantro, fennel, and the like.
We are re-opening the creamery and will begin to develop a small artisan cheese plant. There are no other cheese plants in our area and we are planning on developing a healthy, local market share of chèvre cheeses. Our plan also calls for egg-mobiles that will work their way through the orchards, offering valuable integrated pest management, fertilization and an important financial contribution through egg and meat production. It also happens that this property has an existing roadside stand on a well-traveled highway, which we will reopen as a part of our extensive marketing plan to develop consumer direct business for our products. The average farmer usually harvests only about 10% of the food dollar (money spent on the retail price of food) for their produce and we are hoping to change this. The more we can add value to our products and sell directly to the public, the better the profit margins for our permaculture-based business.
After developing the initial business prospectus with our daughter Ana Brush and our niece, Makaila Harvan-Thompson, we identified a key position in the operation, which is that of the orchard manager, farm advisor and someone who has helped with the agricultural business design. We found one in an extraordinary soul, Loren Luyendyk. He is the founder of the non-profit group, Surfers Without Borders, the owner of Santa Barbara Organics and a good friend and permaculture teacher who I have co-taught with over the years. Loren has been instrumental in bringing his extensive experience to the project through his years of managing farms, developing nurseries, and in applying permaculture as a designer, educator, consultant and installer. He immediately understood our plans to develop multiple integrated enterprises as part of our stewardship and economic success. As a family endeavor involving various people with different experiences and expertise, we have developed a capable, creative and hard working farm team, a strong marketing and product development crew, and good legal and accounting advisors all working together to create this fruitful farm endeavor many of whom are family.
This investment strategy bides well with the increasing needs of our local community in developing its own primary production and processing of basic resources. Right now, Santa Barbara County residents only spend 5% of their food dollar on local food, the remaining 95% leaves the region, much of it going into the hands of distributors and big agro-business. This is untenable and bleeds our local economy with nearly every purchase. By creating more locally available products and sales avenues for consumers to buy direct from producers, we are a part of creating economic buoyancy and stability for our community where people can be in relationship with that which sustains them. Ultimately, Regenerative Earth Farms is a bridge helping investors meet their needs with that of our community’s need for enhanced food production systems.
Our organic Haas avocados
We know this is the first of many farms we will be part of developing over the coming years as the need is great and the vehicles for soil building, family and community nurturing and economically viable investments are limited at this time. Already, we have a growing list of investors who want to get involved in our endeavor and are ready to put their money where their mouths are…in the localization of healthy, soil building food systems that greatly contribute to the creation of resilient and stable communities.
Our apple orchard – ripe for the picking
We are at a pivotal time in history where we must stop stealing from our grandchildren to feed ourselves and take responsibility for our lives and the resources we borrow from them. The time is at hand for us to invest in a manner that gives life and generously supports the generations to come.Interview with Warren Brush
Warren Brush is a certified Permaculture designer and teacher as well as a mentor and storyteller. He has worked for over 25 years in inspiring people of all ages to discover, nurture and express their inherent gifts while living in a sustainable manner. He is co-founder of Quail Springs Permaculture, Sustainable Vocations, Regenerative Earth Farms, Wilderness Youth Project, Trees for Children and his Permaculture design company, True Nature Design. He works extensively in Permaculture education and sustainable systems design in North America, Africa, Middle East, Europe, and Australia. He has devoted many years to mentoring youth and adults to inspire and equip them to live in a sustainable manner with integrity and a hopeful outlook. His mentoring includes working with those who are former child soldiers, orphans, indigenous peoples, youth from troubled families and situations as well as those youth from other varied and privileged backgrounds. He teaches courses including: Permaculture Design Certification, Introduction to Permaculture, Rainwater Harvesting Systems, Ferro-Cement Tank Building, Compost Toilet Systems, Greywater Solutions, Water for Every Farm, Drought Proofing, Cultural Mentoring, Food Forestry, and origins skills among other offerings. He can be reached through email at w (at) quailsprings.org or by calling his office at 805-886-7239.