Sallie Calhoun, do and don’ts from the most experienced regen ag investor

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Lessons from 15 years of impact investing in food and agriculture with Sallie Calhoun.

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Sallie and her team are working on a platform #NoRegrets Initiative to educate investors and funders about the latest science on Soil Health and consider Soil Health with every investment and grant they make. Which is especially important for people who are already making investments and issuing grants in sustainable agriculture, but they might be counter productive and not build soil health.

We discuss the following topics:

– Even if you think you’re doing something good by making investments in ‘sustainable agriculture’, you usually have a negative impact unless you consider soil health.

– What are the first steps to become active as an investor in this sector? Really learn your local food movement, take a deep dive and learn everything there is to know about your local farmers, ranchers, producers, processors etc. and see where you can add value.

– Sallie is designing one of the first vineyards managed by sheep from the ground up (the sheep do everything except harvesting)

– Current investment model (7/10 years, 3x return etc.) doesn’t work for the real economy and long term. Which results in a lot of challenges when this investing model is applied to the regenerative agriculture space. 

– We got market rate returns from an extractive agriculture system. How can we expect market rate returns when we are regenerating the depleted agriculture systems (soils etc.)? (at least at the beginning of the regeneration there is a lag)

– How aggregation can play a key role to scale to regenerative agriculture movement and be interesting to impact investors.

– How big is that lag? (or the low point in the hockey stick curve)

– What happens to soil when you suddenly move from irrigated, organic but ’tilled to death’ row crop to a regenerative system with livestock, constant cover crop, no tillage and perennials? How does the soil respond to such a ‘shock therapy’? Sallie is finding out now but finds it challenging to find academics to monitor and publish on this ‘shock therapy’, even if she provides the funding.

More information on Paicines Ranch, the farm of Sallie.

Sallie came back on the podcast during the Transition Finance for farmers with Benedikt.

Picture credit, taking by Elaine Patarini, Paicines Ranch: Sallie Calhoun on an evening walk in one of her favourite places on her ranch, a diverse perennial meadow.

TRANSCRIPT OF THE INTERVIEW

SUMMARY KEYWORDS

vineyard, investing, people, soil, investments, farmers, investors, thinking, system, regenerative agriculture, land, work, years, transition, tillage, farm, money, podcast, find, agriculture

SPEAKERS

Koen van Seijen, Sally Calhoun

Koen van Seijen 00:00

You're going to listen to an interview with Sally Calhoun, an impact investor who has been active in the regenerative agriculture space for over 15 years. We will be talking about some new initiatives she's been active in, trying to get investors and funders to consider soil health in every investment or grant they make, for instance, but also a new type of vineyard they are developing where sheep will do most of the management, except for harvesting. And we discussed the barriers for impact investors to get active in this space. The current investment model isn't made for long term investments in the real economy which makes investing in regenerative agriculture - which needs a long term view - using the traditional investment methods a constant challenge, and joy.

Koen van Seijen 00:42

Welcome to another episode of "Investing in Regenerative Agriculture: Investing as if the Planet Mattered". A podcast show where I talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Why am I focused on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land, grow our food and what we eat. And it's time that we as investors, big and small, and consumers start paying much more attention to the dirt slash soil underneath our feet.

Koen van Seijen 01:21

Before we get started, I've been recording these interviews next to my day job and I will definitely continue to do so and release about an episode a month. And at the same time, I would love to take this further, share more interviews. There are many more stories to share on investing in regenerative food and agriculture, more depth, improve the quality, maybe even doing some video series. So I started a Patreon community which makes it easy to support creators like myself. If these podcasts have been of value to you, and if you have the means, I invite you to support me and make this happen. For more information, please find the link to my Patreon account in the description below. And now without further ado, the interview, enjoy.

Koen van Seijen 02:03

So welcome to "Investing in Regenerative Agriculture: Agriculture as if the Planet Mattered". I'm Koen van Seijen, the host for today. In the podcast today we have Sally Calhoun who has been active in investing in regenerative agriculture for over 15 years both on our own farm and in the rest of the US. And I'm very eager to find out more about her latest projects, for instance, mixing vineyards and sheep. Welcome, Sally.

Sally Calhoun 02:24

Ah, thank you very much.

Koen van Seijen 02:26

So to start with a personal question: why are you active in this space? After a successful career you bought a farm and you could have stopped at that, but you didn't?

Sally Calhoun 02:38

Yes. And I really tried to stop it that. I love spending my time with farmers and ranchers and out on the land and that's what I personally want to do. But I became more and more uncomfortable first about what the rest of my money was doing to the world, and the idea that it was potentially doing very bad things and I was not thinking about it. So I sort of felt compelled to start to take that journey of "where is the money?" and "what is it doing?" And then the reason I've decided to do most of the investing in regenerative agriculture is to me that was the answer of how to still spend time doing the things I'm interested in with the people I find interesting, mostly farmers and ranchers, but putting money to work at the same time. So it was a way of blending the two things. I'm not interested in doing impact investing, where you end up going around talking to financial advisors and looking at spreadsheets about SRI and ESG. So I had to find a way of doing investing that was joyful and fun, and I was willing to spend time at it, and this is what I've come up with.

Koen van Seijen 03:38

And what was your first step outside the farm when you made that decision to be active also with with the rest of your portfolio? How did you start? Where was the first, initial sprout or seed planted to go on the journey?

Sally Calhoun 03:53

Well, actually, my first two adventures in this were loans. One was actually to a friend who had a ranch in Wyoming who happened to call me one day and tell me that his two partners wanted to develop housing on the ranch and wanted to sell it out from under him. And so my very first foray here was to make a loan to that rancher so that he could take out his two partners, put a conservation easement on his ranch, stop the development and then sell it and move on. And I didn't really intend to be an impact investor, but that was sort of the first step. And then the second was, I'd been in contact with Don Schaefer at RSF Social Finance and he knew I was interested in the space. And he connected me with a young woman who was running a CSA very near my ranch who I had never met. And she was getting ready to shut down her company because she couldn't find a very small amount of financing to take the next step and hire someone. And he put us in touch. And we ended up talking and she asked me to make an equity investment and I said "No, I don't really want to do that but I will do a small patient capital loan. So I just sort of started inching in that way. And I've now been working with her for the last 11 years on a variety of projects. So that was that was kind of my starting point.

Koen van Seijen 05:10

And after, because I've seen it from some other impact investors, they start making investments because things come across their path. When was the moment you thought "Okay, let's think about it a bit more strategically. Let's come up with a structure or let's let's come up with maybe even a strategy". Was there a specific moment that triggered that?

Sally Calhoun 05:36

Well, that was about five years ago, I attended this meeting called "Play Big" which is put on around move, moving capital toward local investing. Really sort of activating your whole portfolio around purpose. And that was the point when I really started thinking about doing things more strategically and at larger scale. And my first thought was "Oh, I'll just go find a financial advisor who's into this and hand that person the money and it will all be fine." But I realized, as do most impact investors, that the infrastructure for doing a lot of interesting things doesn't really exist. So it took me kind of a couple of years after that to wrap my head around the fact that I was going to have to build an infrastructure and a team and do more of the strategic thinking myself, rather than just being able to outsource that in a way that made sense to me and seemed really impactful in the areas that I care about. So it's been in the last three years or so that I've really started to work much harder at it and to do a lot more moving of the money.

Koen van Seijen 06:36

And are you still able to spend enough time on the land talking to the people you find inspiring?

Sally Calhoun 06:41

Yes.

Koen van Seijen 06:42

Or more and more with financial advisors?

Sally Calhoun 06:45

No, I never speak to financial advisors. I work with a woman named Esther Park who runs our investment firm and I'm afraid that I make her do most of that that needs to happen. Though, I'm always happy to go talk to investors if I can talk about regenerative agriculture and soil health. So I will take that opportunity to go and meet with those people but I don't spend a lot of time. I have I have a personal goal to spend as little time as possible under fluorescent lights, especially in hotels. So I'm pretty able to stick with that.

Koen van Seijen 07:19

I think it's a great goal. And if you look back at the last five (or maybe even longer) years what's the - maybe it's one of the two investments you already mentioned, one of the two relationships you already mentioned - what's the one that really sticks out on impact? An unexpected one, the one you tell if somebody asks you: pick one basically.

Sally Calhoun 07:39

Well, so one of the most unusual investments we've made that we often share with people is actually for a food processing company in Louisville, Kentucky, that specializes in doing processed food for fast casual restaurants, which is not the kind of company that we normally really talk to at all. You know, food in big vats in a kind of factory setting. But we met Mike who runs this company at Louisville and he had become totally passionate about sourcing local food. There are a lot of small farmers still left in Kentucky, and a lot of people are working on how to keep those farmers in business. And he had gotten totally committed to the sourcing of local food, and gotten in a position where he needed some capital or he's going to have to sell the company to a conventional food company. So he ended up making an investment in that company, and they're making a lot of school food and sourcing a lot of cabbage and squash from farmers in Kentucky. So that's probably the most unusual and unexpected investment we've made in it sort of reflects a little bit of our theory of change. Most of the farmers that he works with are not organic, they're not really practicing regenerative practices at the moment, but part of our ideas that we need to keep more farmers on the land, because then there's the possibility of of improving our practices, whereas the farms continued to get consolidated and turned into fence row to fence row corn, it'll be much harder to go backwards. So hopefully then as these farmers are selling into local markets, the market will drive more organic processes and more regenerative thinking. That's one of our favorite investments.

Koen van Seijen 09:15

That's very interesting, and if you make more investments in this line of thinking of theories of change where you invested in a processing company or somebody that aggregates from many small-holder farmers or small farmers to keep them on the land and hopefully in the future, move the whole group at once or at least as a group to regenerative agriculture. Is that something of a theme for you?

Sally Calhoun 09:39

Yes, I think it is actually. Like particularly in local and pastured meats we work with a couple of people. A woman in Kansas who aggregates lamb from a variety of producers, and then a young man in Arkansas who has started up a group of 14 producers and they're aggregating a whole variety of pastured meats and selling throughout Arkansas. So I mean, it turns out a lot of small farmers and ranchers, this direct marketing, which a lot of people have tried, takes a tremendous amount of time and energy and a skill set that a lot of people don't have. So we are definitely working at supporting the people who are aggregating for those producers. Because we think that's, right now, that seems to be the best way to get these kind of products to market and still maintain some revenue for the producers, who are generally the guys who kind of get squeezed out of the financial picture.

Koen van Seijen 10:29

Yeah, it's interesting, because I had exactly the same conversation with a group of people doing the same in southern Africa. And saying that the processing is where you, if you can keep the processing locally, you can add a lot of value, pay farmers, much fairer share, and start moving on regenerative agriculture. So it's interesting to see on both sides of the the ocean, basically the same movement coming up. And I think here in Europe, actually, it's exactly the same. We need aggregate and not everybody can and should be selling directly on farmers markets, because there's just no space for that.

Sally Calhoun 11:03

Right. And it's crazy, hard work to do that. But of course, at the same time, we are also working with larger farmers in the Midwest who have completely different distribution channels. But yeah, they need sort of different kinds of investment. So.

Sally Calhoun 11:18

Yeah, different types of money, different horizons, different payback schemes, and it's all a different, different approach.

Sally Calhoun 11:25

Right. So one of the investments we've made is in Montana. And it was a lone. We were part of a group that did a loan to a processing facility for lentils and peas. We were very interested in those because if we can monetize cover crops and turn them into cash crops, we can hopefully accelerate the transition to cover cropping. So that's another processing facility that works generally with larger farmers. But but it's the same idea.

Koen van Seijen 11:50

Yeah, and as an added benefit of it being covered up. And if you look at the, we're now February 2017, if you look a year ago and up till now, what were the things you were most occupied and busy with workwise? What kept you up at night? What have you been working on? What are you most proud o? What was the year like?

Sally Calhoun 12:14

Well, that's an interesting question. I was thinking about that before our call. I guess the thing we've been working on is we've launched something called our No Regrets Initiative. And we are putting up a website and starting a campaign to educate investors and philanthropists around soil health, particularly those people who are already working in sustainable agriculture. Our feeling is that a lot of people are not up to the latest science on soil health, and don't really understand the importance of it, and the possibility of it in terms of how it can address a lot of the issues that we're facing, including climate change. So we've been working on something seperate, which is something completely out of my comfort zone, and something really new for us to do. To communicate this and create a community of investors and philanthropists who are educated in this and working on this, and we're starting to get people ask us questions like "So where's the soil health investing conference?" and we're like "Oh, there isn't one..." But so one of the things we're struggling with is how much time and outreach we want to spend on this education piece, and how much we want to spend on doing our own direct investing. So I guess that's been part of the tension over the last year. We expect the website will launch in the next couple of months, we're working on partner relationships and, a whole new thing for us. And I have no idea whether anyone is going to care or how well it's going to work out or how effective it will be in moving more money into the space or really just changing the way money is used in the space. We're really asking people to just consider soil health when they make their, both philanthropic grants and their investments.

Koen van Seijen 13:54

I wouldn't be surprised if there would be very little interest, especially if people are already asking "where's the conference?". But I understand the tension between the field building and not the field field as your own field, but the field building and of course, your core activity, which is making these investments and also running the farms. So I understand. But I mean, it's nice to something out of your comfort zone and being pushed while still maintaining the same, the same vision.

Sally Calhoun 14:22

Yes, it's interesting and we've got gotten to work with some completely different new and amazing people. So that part is really fun.

Koen van Seijen 14:28

And and I guess that that will also be an important part for the next few months to get that launched and see where that's going? Is that something that that's the main thing for the next month? Or is there something else project wise or farm wise that will keep your attention?

Sally Calhoun 14:45

So that's certainly the main thing on the investing side. And we are at a really interesting time on the farm side because we've started to actually do some of this more complex farming that we've been talking about and thinking about doing. And this is the first year when where we're going to really start to see whether from a financial standpoint we can make it work and make it make sense. And also to understand what the transition is going to be from heavily tilled annual row crop ground to a system that is more forage crops, animals, and more perennial plants. So we're in the midst of this big transition on the ground here at the ranch and it's all still very theoretical and this is the year where it starts to get a little less theoretical. And we really get to see what's going to happen as we make that transition. This is also the year we plant our vineyard with the sheep in it. So it's an exciting year on the ground too, for us.

Koen van Seijen 15:41

Yeah, that tell us a bit more about, the vineyard of course, but also about this transition. Where's it coming from? And why this transition? Plus what are the first steps you've already made and are making this year?

Sally Calhoun 15:56

Well, so we have about 550 acres of irrigated row crop ground that has been leased out for between 9 and 12 years to a certified organic grwoer. And the more I've learned about soil health and what it takes to have healthy soil, the more apparent it's been that this method of farming is taking soil in the opposite direction. There's just a tremendous amount of tillage over and over and over again, which is pretty standard with annual organic production. So I just sort of felt compelled to basically, as those leases ended, we are going to start farming that row crop ground, which is something that I swore that I would never do. And what we're doing is we're starting from the beginning, we're planting a really diverse set of forage crops, which also act as cover crops. And we will immediately be grazing with both sheep and cattle on that land. And the question in our mind is to see how the soil changes with that combination of, you know, well it'll always be covered in green crops, it will be grazed numerous times a year, very intensively and well managed. And just how quickly can we turn that soil biology around and increased carbon sequestration, and as we do that how will productivity change. But basically we were compelled to do it because it couldn't sit here and watch what was happening on the organic ground anymore.

Sally Calhoun 17:18

The vineyard is morem because we think it's a really cool idea. Our ranch manager Kelly Mobile has come up with this idea that we could design vineyards so that they're essentially managed by sheep, which means sheep are in the vineyard all year, and do almost all of the work, except for harvesting. So it's a model that should really reduce irrigation water, increase yield, produce animal protein, and hopefully grow really great quality grapes. And we're trying it for the intellectual challenge. As far as we know, no one has designed a vineyard like this from the get go. Some people have modified existing vineyards to have sheep in them all year. But this is the first one we know of that's designed from scratch. And then the you know, the sort of audacious goal there is that it's likely that a lot of California vineyards are going to need to be replanted as a result of climate change. So if there's a different model for vineyard planting, it might actually have some impact in California over the next 20 or 25 years. If that replanting really has to happen.

Koen van Seijen 18:19

Yeah and of course it's nice to have a working example by the time a lot of the vineyard owners and the wine estate owners are pushed to switch. That they can point at something: look, we have experience, we've been doing it for a while, it's working, these other lessons, please copy and please do it as well.

Sally Calhoun 18:36

Right. See what you think or adapted it. So we need about, we'll be about eight years in before we really figure out what the quality of the grapes is going to be. So it'll take us a decade probably to say: "look, we did this, and not only are these the financial numbers that are really compelling, but the quality is is really good, too." So that's how we hope it turns out, we'll let you know in 10 years or so.

Koen van Seijen 19:00

Yeah we need to taste that. And then actually on the the organic always-tilled land, are you going to share data on that? Like the the carbon levels in the soil? How it's gonna respond to that? Because I think a lot of people would be very interested to follow that transition and that almost revolution on the land from one day to the next. Completely a different regime.

Sally Calhoun 19:25

Yeah, that is exactly our intention. And actually we've run into a problem there and that is that we have been unable to find academic researchers who are interested in doing that kind of research, even if you provide funding. We just this morning did receive a proposal from Point Blue Conservation, which is a nonprofit in California which is doing a lot of monitoring on range lands around biodiversity and soil health. And so we hope we're going to be able to work with them to monitor this transition process. But sort of a frustration is what we found on the academic side is academic researchers don't really like to go out and keep track of what farmers and ranchers are doing and publish those results. They like to design a trial with hypothesis on small plots of land and do the same thing for three years and then publish the results. And it's really surprised us how difficult it's been to to figure out how to track what's happening on this land as we go through this transition, because it's a really important part of it to us. Because we think it could be indeed really compelling. We haven't found anyone else who's sort of immediately gone from lots of tillage, to no till, with diverse covered cropping, with animals. So I think it could be really important to document but it's been a real challenge to figure out how to do that.

Koen van Seijen 20:41

That is really weird. I mean you would imagine this shock therapy would be extremely interesting, because it's so unique and doesn't really happen very often, and on this scale, that the academic world would be all over it. Or at least the the organic/regenerative agriculture soil health academic part of it.

Koen van Seijen 21:02

Yes, we we thought so too. We do have a professor of agroecology at UC Davis, who's going to be working on monitoring in the vineyard site. She's very interested in that. But we have a bit of a disagreement going on at the moment because she wants us to plant a conventional vineyard and till it to death.

21:19

As a control group.

Koen van Seijen 21:21

Yes, even though we are surrounded by neighbors who have said that they would be happy to have their vineyard used as control group. So I think we're going to refuse to do that. So I guess we'll see, we'll see how that relationship goes.

Koen van Seijen 21:36

I guess maybe the vineyard is more sexy than the organic tillage land.

Sally Calhoun 21:41

I think the thing about the vineyard actually that makes it easier for academics is it's a perennial system, that doesn't really change, right. Plant these grape vines and they're going to stay there whereas on the transition ground like: "Well this year, we're going to do forage crops" And they were thinking of adding some shrubs, and they were thinking of adding some trees. So since it's going to be transitioning and going through different kinds of systems, they have a hard time dealing with that change. Like they study only perennial systems or only annual systems. So it's a strange problem.

Koen van Seijen 22:09

Which is also an issue actually, with the farmers. I've noticed in the Netherlands, where a friend of mine is setting up a cooperative where they actually, with a group of families buy a small piece of land but enough to support 200 of these families and most of their food. And they they really struggle, because they're setting up a mixed farm like in the old days but with all the latest science, soil health, etc. They really struggled to find farmers were able to manage even two types of livestock, let alone veggies, trees and everything around because they they are not trained to do that they're trained to be very specific. And so they actually have issues finding that and are working with the schools to train them again, because they're setting up in their plan, I think a few hundred of these in the next years, meaning that they need a lot of these farmers to be able to to to manage mixed farm 2.0, or whatever we are going to call it.

Sally Calhoun 23:06

Yes, and we're looking, we're trying to hire someone right now, we're trying to figure out... We want someone with experience, at the same time once they have experience they're sort of going down this path of a particular way of farming and we're just dealing with a lot of questions and a lot of change. So it is a dilemma.

Koen van Seijen 23:26

You almost need somebody with the capacity to learn quickly and have almost a lean mentality and not too much experience because you first have to de-lear that experience before you can start because it's such a new way of farming or it's an old, but such a new way now for most people.

Sally Calhoun 23:44

I think you just mostly, you need to be curious and open minded. I think.

Koen van Seijen 23:49

I mean, it's it's almost a funny challenge. But it's not funny when you're trying to hire someone and you're not finding someone of course.

Sally Calhoun 23:55

No, you think it you think it would be pretty simple. And it's true that there are people who really want the opportunity, but they generally seem to have like no experience at all.

Koen van Seijen 24:03

Yeah, that would turn into a dangerous experiment.

Sally Calhoun 24:06

Yeah. Do you want to give them your tractor to drive? No, not yet.

Koen van Seijen 24:10

And if you look at, just to come back a bit to the investing side, if you look... because you've been in this space for a bit of time and you've seen many things come and go. What do you see as the two biggest barriers for investing in regenerative agriculture and how could we overcome them?

Sally Calhoun 24:32

Wow. Yeah, I was thinking about that one before we started talking. I mean, certainly, there are not a lot of sort of deals that are ready to go that that affected the production side. It's like a lot of the deals in food are frankly around bars and juice and have exit strategies of selling out to large conglomerate food companies. So yes, we are looking for deals that more actually affect production and that hopefully keep some of the wealth in the hands of the producers and the communities in which they live. And I think that one barrier there is that's not a way that most investments have been thought about in the last sort of 20 or 25 years with this whole globalization and financialization. So trying to go back to find deals that build wealth at the community level, and change the way agriculture works has just been a challenge to find those innovative people, and to figure out the best way to support them. And it might be they need technical assistance through a philanthropic grant, it might be to connect them with other people, it might be to invest in processing, which will help them move their innovative ideas forward. But those are sort of challenging because they're not really sort of set up for investors to come in at scale, and to go forward. So there's that and then I think just there's the whole issue of the American food system, and all the subsidies and the crop insurance and everything targets a particular system. And to work outside of that system, you're constantly running into a whole variety of barriers, not really one. Right for one farmer, it might be crop insurance. For another it might be regulations that are getting in the way of what they're doing. And for third, it might be trying to compete in a market that's very subsidized on the conventional side and not not helped at all by the government on the other side. So I would say that, yes, I see a lot of barriers, I'm not sure I can put my finger on one or two. It feels like we're just trying to work in a different system, and that's just the challenge.

Koen van Seijen 26:40

Then it almost investing in regenerative agriculture almost challenges the idea we have of investing, like you said the last 2025 years, we get a very different view on investing and investing locally or globally. And it really became a system that is not very attached, or not attached at all, to the real economy. And now we have to refigure out how to actually put money or to work in the real economy. While we're revolutionizing the agriculture system. And it's a big challenge.

Sally Calhoun 27:10

Yeah. And the point Esther likes to make is that we've taken conventional agriculture and in a lot of places, we've ended up degrading the system, degrading the soil, and in fact sucking people out of the system. Right? So we've taken away the human capital, and we've taken away a lot of the natural capital. But then we want to - is it realistic to solve that problem and expect to get sort of market-rate returns from a degraded system? We got market rate returns in an extractive system and it seems unlikely that we're going to be able to get those same market-rate returns as we restore that system, at least at the beginning. I mean we fully believe that once we get some distance down this path of regeneration, that returns could be better than they are in the extractive system. But that's a) a theory and b) there's probably some kind of lag and who knows how long that is. So do we have realistic return expectations in regenerative ag right now? And the answer is probably no, if we're looking for what people think of as market returns.

Koen van Seijen 28:14

Yeah, I think there's a whole discussion to be made around what is market-based returns? What is risk adjusted? And and I think there are a lot of illusions there that we need to debunk and sort of - people say it's easy to make or it seems to be easy to make money with money, which absolutely is not true. And especially not if you start looking into these kind of sectors and without a long term view but I think any investor should be looking almost generationally and then you start looking at these type of system, because they make so much sense in the long term. But yet 5-10 years, I mean if it already takes eight years to get up a vineyard, and probably 10, then most traditional investors would already be out because they need to move a lot faster, which doesn't work in the real economy.

Sally Calhoun 29:03

Right, you might say that one of the real barriers is 7-10 year fund lifetimes.

Koen van Seijen 29:09

Based on exits, yeah.

Sally Calhoun 29:11

Yeah, that's hugely problematic if you're trying to change a agricultural system.

Koen van Seijen 29:17

Yeah, and I think we in impact investing have sort of made the point no? You can just do your traditional traditional investing, and just put some impact glasses on, and you'll be fine. Which the underlying issues are much bigger than that and I think we now start to see a lot of people or some people looking into alternative structures. So you can, I mean, all the different types of between loans and equity, which are much more based on how the company grows and actually working with the co-founder instead of just investing in it and hope for the best and hope for the exit to come, which usually doesn't come and making a lot of these funds a problematic situation. So we have to reinvent the investing part of it and not only the agriculture part.

Sally Calhoun 30:03

Right, I think yes. And so those of us trying to invest in regenerative ag are trying to do both things at once. Why make it easy?

Koen van Seijen 30:13

And if you look at if you, because you talk to investors I imagined regularly because I can think they reach out to you for advice. What do you tell them if somebody says "I would like to get into the regenerative agriculture space and soil health and I would like to put my money to work? Where do you recommend them to start?

Sally Calhoun 30:33

We recommend them to go back to their place and get to know people who are working in agriculture. There wherever that happens to be, and in the food system, to really go back and get to know what's happening. And the only way we know how to do it is to really recommend a deep dive. So we don't have much advice for people who like "Oh, I have this diversified portfolio and I'd like to put a little into ag" or like "Well, okay, there are these funds." Go find a fund, ask these kind of questions about the fund, and put your money there. But if you want to do direct investing or lending, our advice is you need to dive into your place and probably also join some networks of like-minded people, in whatever geographic area you want to work, so that you can work together with others. Because there's an awful lot of opportunities to invest in agriculture in ways that are actually counter to what a lot of us would like to see happen. So one of our words of advice is you have to be very careful when you do invest in Ag, you have to think about the long term consequences of your investment and the consequences to the community and the farmer. So I guess our advice is get really serious about it and dive into it, which of course doesn't work for everybody. You've gotta work with people who have done that deep dive, who you are confident are thinking about these very issues.

Koen van Seijen 31:55

Which comes back to the long term soil health, which I think is the central central theme.

Sally Calhoun 32:02

Yes, it is. Because if we don't have that our sort of theory is that without without long term soil health, which is going to take committed, intelligent, creative people, the system will just collapse and probably will no longer support the society that we would like to have. I think it's the UN says we have 60 years of topsoil left on the planet. So that is a hugely frightening statistic.

Koen van Seijen 32:31

So we better get started. Yeah, I wouldn't want to thank you for your time and your openness and your sharing and I will be sure to be checking in regularly with the vineyard which is going to take a bit of time, but we're patient to to see how that's going and also to tillage, of course, which I think are going to provide much earlier signs first, probably in a sign of hockey stick first a lot of stress on the land and soil doesn't know what's happening, but hopefully soon enough will take an upward path.

Sally Calhoun 33:03

Yeah, we're a little worried because so far, the soil seems to have responded really quickly. But we're expecting a moment when it does get confused. So that's what we're watching for. Exactly. Yes, I'd love to love to stay in touch and thank you for your your work, spreading the word of impact investing and regenerative ag.

Koen van Seijen 33:22

You just listened to "Investing in Regenerative Agriculture: Agriculture as if the Planet Mattered." An interview with Sally Calhoun, an experienced impact investor in regenerative agriculture. She shared with us her first steps, her challenges and opportunities, and I hope to see you back soon for more of these interviews.

Koen van Seijen 33:39

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