Case Study: Iroquois Farmland Real Estate Investment Trust (REIT)
Location: USA
Investment type: Impact investment which attracts retail, family offices, foundations and institutional capital
An organic farmland finance company that provides farmer-friendly leases and mortgages to the next generation of organic farmers.
Founded in 2007, they have $85 million in investments in organic agriculture to date, across 30,000 acres in 18 states of the USA.
Iroquois works by inviting farmers that fit their remit to approach them with a land purchase opportunity that the farmers cannot finance on their own. The land can be conventional, which farmers commit to transitioning to organic farming, or existing organic farmland for those who want to expand their operations. Together, the Trust and the farmer work out the best way to structure a finance agreement for that land, which can be lease or mortgage funding. The trust also provides tailored credit lines to farmers it works with, where needed.
Once a farmer has leased the land for 7 years, they have the ongoing opportunity to purchase the land if that aligns with their interests. The Trust only works with businesses they deem to be financially viable, and with people with farming experience.
They have supported farmers across a range of production types from pastured meats and dairy to legumes, berries, vegetables, nuts and grains. Over 60% of their tenants are millennials and most are from established farm families.
Iroquois Valley is a public benefit company with 650 investors across a range of types — around 75% are retail investors, and the remaining quarter comes from family offices, foundations, and other institutional investors. The average investment size is $100,000, and Investors can exit after 7 years, but only a small percentage have chosen to do so because of the impact and financial returns from the Trust.
It has been a registered B Corp since 2012 and was chosen by Impact Assets as a participant in its Impact 50 (IA50) listing of worldwide impact investments from 2012 to 2022. The Trust measures its impact across social and environmental metrics in terms of supporting increases in soil health, organic systems, farmland and nature conservation and community outcomes.
The long-term aim is for all of the farmers in its portfolio to transition to organic farming using the USDA organic standards and certification process — currently, 50% of the acres in its farming portfolio are certified as organic and the rest are in transition.
The Trust is evolving new financial products, including ecosystem credits, and is also developing a charitable foundation called Healing Soils, which will enable tax-deductible contributions to support farmers using practices that improve soil health.
This case study is an extract from Regenerating Investment in Food and Farming: A Roadmap.