Green Farm Loans

Sustainable agriculture in the Netherlands is facing major challenges due to high land prices - the most expensive in Europe - and associated "cost of capital" for farms.

The country has a group of so-called 'land traders' who buy farmland with a goal of selling at a large profit. This speculation drives up the cost of land, making it harder for farmers who want to de-intensify production systems to break even. Resulting growth in 'intensive farming' has environmental, social and economic costs which are in reality being 'externalized' to other stakeholders.

As this issue grows increasingly serious, many engaged observers recognized a need for financial mechanisms to raise capital to buy agricultural land and lease it to farmers committed to nature-inclusive operations. This approach has already been adopted successfully in other regions, but had yet to be adopted within the Netherlands at meaningful scale.

Community Interest

There is a new community of sustainability-focused financial organizations in the Netherlands. Called the “Aardpeer collective," they have already collected over 500 signatories, led by Stichting, Stichting BD Grondbeheer, Triodos Regenerative Money Centre and Stichting Herenboeren, who have collectively endorsed the “Together for Ground manifesto with a goal of incentivizing environmentally-considerate farm management to support a third of Dutch farmlands in transitioning to more sustainable production systems.

The vision of aardpeer is to shift the 'cost of capital' and relative profitability of land uses to more diverse and sustainable practices. The project has already seen remarkable impact.

Successful Raise

The Aardpeer Collective has now completed several successful capital raises to purchase land and other resources to finance the establishment of holistic production systems. Funds are deployed in collaboration with and others. Committing to a long-term lease of 30 years ensures predictability for farmers, and helps to ensure alignment between the incentives of funders with community needs.

In 2021, the collective raised €7.2 million from 700 investors in their first round (Samen voor Grond 1) and in 2022, they raised an additional €2.8 million from 250 investors in a second round (Samen voor Grond 2). These successful raises demonstrate potential for environmental impact investments in financial markets, and the possibility for additional innovative instruments and capital flows in the future. The launch event was well-attended and documented by multiple media sources. In the words of Kees van Biert, Chairman of the Board of BD Grondbeheer,

This is the first time that an ANBI foundation finances the transition to social and nature-friendly agriculture through a bond issue. With our approach, existing farmers can convert a future-proof company. And it will be possible for new farmers to start a nature-friendly farm

Monitoring and Reporting

In order to ensure informed and accessible monitoring, reporting and verification (MRV) for all stakeholders, the Landscape Network is being used to track the interests and commitments of participating farms, as well as document day-to-day activities and long-term outcomes. With reliable and accessible data that also has integrated advisor support, it is easier for the Aardpeer community members to document efforts and help ensure the scheme is managed successfully.

As more projects in the Open.Landscape.Network scale-up and increasingly search for funding, these capabilities will continue to improve.

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