The Van Trump Report

Investments In Agro-Forestry Gaining Traction

Investments In Agro-Forestry Gaining Traction

Startup Propagate Ventures wants to treat trees as a financial asset and is helping farmers diversify their crops through agroforestry, a regenerative practice that integrates trees and shrubs into crop and/or animal farming systems. Some of the strategies include alley cropping, silvopasture, windbreaks, and orchard bands which allow producers to stack multiple crops on one field. Proponents say it can help ensure long term resiliency and increase profitability, while also providing environmental benefits. 

Propagate Venture CEO Ethan Stein says the company is built on the idea that it should be easy to develop and fund low risk agroforestry projects. As they see it, reducing risk in agroforestry and more broadly in regenerative agriculture opens the door for greater profitability, while simultaneously creating a positive force against climate change. 

What Propagate does is pretty straightforward – they help agricultural operations figure out how to profit from planting trees via the use of their technology platform. Land that is generally sitting fallow and unused anyway can instead be planted with trees that also provide a cash crop, such as fruit and nuts, or timber. The company has projects ranging from livestock producers wanting to provide more shelter for their animals to specialty crop producers looking to diversify. 

Each operation is different so Propagate begins by analyzing the costs of each investment, the potential revenue, the labor implications and the anticipated yield. Importantly for farmers who lease the land they are working, plans are formulated specifically to keep ownership of the investable assets separate from the real estate. 

Propagate also brings buyers, cultivators, and other partners to the table. “Farmers need to know that a buyer will be available” when the tree crops begin to bear fruit,” says COO Jeremy Kaufman. “Putting together the right kind of investment arrangements, purchase and lease agreements, and management and maintenance contracts is critical to making this kind of farming work,” Kaufman says.   

Markets are seeing more private sector interest in sustainable and climate-friendly efforts as of late too, with some reporting that the climate solutions sector could double from $1 trillion today to $2 trillion by 2025. Equity funds already reflect the interest with flows into sustainability funds setting records this year, in spite of the pandemic, according to Morningstar. More and more investors want to know how their money is working for them as it relates to their personal values, or how it might be working against them in the creation of climate change or other issues. It is important to follow this trend as it will continue to shape the future of our operations as well as our investments. (Source: e360, Greenbiz, GritDaily, MongaBay)

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