Steward is a community of borrowers and lenders who support regenerative farming.
Can a farm make the earth healthier? Regenerative farming is a set of practices that rebuild soil health by restoring carbon and nutrient content. This improves productivity and the health of the planet.
But there’s a problem. The agricultural capital system wasn’t built for small, regenerative farms. That’s where Steward comes in.
Steward equips regenerative farms with the capital they need to grow. Steward is a private lending partner, but they don’t work alone. Steward brings together a community of values-driven lenders who participate in loans and earn a return.
A Capital Marketplace for Regenerative Ag
Steward brings together a three-sided equation – small to mid-sized non-commodity farmers, people who are passionate about food, and the Steward platform. But it all starts with the farmers.
“It’s about thinking beyond a short view of taking care of a resource and feeling the bound to it,” Dan Miller of Steward says.
“For many historical and indigenous cultures, that was obvious. With our current culture, we’ve been disconnected from the resources that we live upon.
“For most of these farmers, small to midsize growing non-commodity, the current financial system is built for large scale commodity agriculture – large soy and grain farms. If you’re one of these smaller producers selling at a farmer’s market or selling to a well-known chef, you don’t have an outlet for capital.
“So they come to us. At first, farmers are surprised that we exist, that there’s a financial service that is focused purely on them as a customer. We have a team member that works them through the funding process. We have an in-house team member who’s a farmer. He helps speak with them about their actual business plan.
“So it is about helping them think about what funding they need. What’s the right amount? What’s the right structure. What are the improvements that they can immediately make to help grow their business?
“They’ve been undercapitalized so long that it’s often a very simple piece of equipment, or tools, or operational capital, or land. It’s not complicated at all. What they need are things they’ve needed for years. They have not had access to capital.”
The Capital Markets Weren’t Built for the Future of Food
“The system is designed for large-scale commodity production, export-oriented, or at least large volume sales,” Dan explains.
“And that is mainly because of government policies. It subsidizes the capital that goes to that form of agriculture – through bank programs, through direct loans it subsidizes, pricing it subsidizes.
“So all it does is drive every farmer pretty much to the path of growing commodities and selling at the global Chicago board commodity price. It’s easy to underwrite because it’s acres times pricing. It’s a very formulate business.
“The other form of agriculture is how it was always done. You grow a diverse mix of products, some fruit, vegetables, and livestock on an integrated farm – a few hundred acres or less so that you can manage without huge machinery.
“You’re selling direct to markets or selling direct to restaurants, direct to farmer’s markets, direct to customers. And that falls entirely outside of that system.
“Those businesses are run by entrepreneurs. They’re a terrible fit for the dominant form of financing, which is large-scale agriculture. If you don’t fit that type of funding, which is unlimited money at very low costs, there’s nowhere to go. There’s no alternative. And that’s our customer.
“They’re stuck outside the financial system. They’ve used their savings. They’ve used credit cards. They’ve got an uncle or cousin to give them a bit of money. They’ve taken it as far as they can on very few resources.
“But at some point, you need equipment. You need bottling equipment. You need value-added processing equipment or fencing. You need drip irrigation. You need equipment to produce more, to sell more.
The Consumer Demand Runs Counter to the Finance System
“The reason I started Steward is the consumer demand for these products from these farmers has exploded,” Dan continues. “There’s pretty much unlimited demand for these regenerative products, but these farmers have no other access to funding.
“They know that if they produced more, they could sell more. But you can’t produce more without a bit of capital. They get stuck in the cycle. But if they can get funding, there’s a huge opportunity, not only to grow the products but also create value-added products and sell at markets.”
People Who Are Passionate about Farms and Food Can Participate
To solve this problem, Dan experimented by making small loans from his personal funds. The idea became the Steward platform where anyone can participate.
“That’s the point of the platform,” Dan says. “Individuals can go to the platform and lend capital to these farmers.
“We administered the loan. We structure the loan. We service it. We set up the repayment systems, tax documents, and regulatory, administrative compliance to have broadly held loans. Individuals come to the platform and lend capital to the farms. They can earn a reasonable return. Most loans are 5% to 8%. They can directly see that tangible impact from that farm: An urban farm in Detroit transforming vacant land in a food desert to fruit and vegetable production; or a hemp farm in Southern Oregon growing sun-grown hemp.
“There are these incredible stories of farmers that everybody loves, and wants to believe in, and wants to support. They need that funding.
“To break that log jam of the kind of government-driven institutional banking system, you have to create an alternative. And that alternative base is the people themselves that want to see this type of agriculture. And there are many. And giving them a chance actually to provide their funds in support of these farmers.
“It’s a broad lens. It’s people who are focused primarily on supporting regenerative agriculture and return as part of that. We have people lending as little as a hundred dollars. We also have people lending $250,000.
“It’s customers. It is cousins. It is anybody with a connection. So mainly, it’s people who have a connection to that farm – their customers at the farmer’s market. And then users of our platform who’ve created an account to become supporters of this type of agriculture. Then they tend to fund different farms as they come along, even if they’re not in that state.
“It’s surprisingly non-geographic. People know the story of that type of farm, and they want to support more of them. Obviously, return is important, but you’re doing it because of more than that.”