cows in field

Local Farms Fund

A New Farmland Investment Fund

By Sonja Heyck-Merlin, NODPA News Contributing Writer

Local Farms Fund (LFF) is a new farmland investment fund that supports young and early stage, sustainable farmers by providing secure land access. The fund’s goal is to provide lease-to-own land arrangements, with the option for the farmer to purchase the land from the fund after 5 years. LFF’s lease-to-own model provides essential land security to the farmer, while the farmer is developing his or her farm business.

Recently, Sonja Heyck-Merlin, NODPA News contributing writer and Maine organic dairy farmer, interviewed Kevin Egolf, Co-Founder and Manager of the Local Farms Fund.

Local Farms Fund_FARMFUND1

Steve Fondiller (left - Chairperson of LFF)
and Kevin Legolf (right – manager of LFF).

Please introduce readers to the Local Farms Fund:

The Local Farms Fund (LFF) is a high-impact, socially responsible farmland access venture co-founded by nine NYC Slow Money investors and Working Farms Capital. One of the greatest challenges young farmers face is land access and we created LFF with the specific intention of addressing this challenge. We work primarily within the NYC Foodshed - New York, New Jersey, Connecticut and Pennsylvania with preference given to operations in the Hudson Valley, Catskills and Adirondacks.

Can you tell us more about Slow Money and Working Farms Capital and how they relate to the Local Farms Fund?

Slow Money NYC is a chapter of a national not-for-profit organization called Slow Money, Inc. Slow Money NYC envisions a new economy based on knowing where our food comes from and where our money goes and the goal is to invest in small, local food enterprises in order to provide a tangible and direct way to begin addressing the structural problems of our food economy.

Similarly, Working Farms Capital manages and develops farmland ventures looking to prosper from the long-term growth of local and organic foods. Working Farms Capital operates on the premise that farmland ownership with a sustainable business model is an attractive asset class with financial returns equaling or exceeding many financial alternatives.

Working Farms Capital is one of the initial investors in LFF and will act as manager for the venture providing development guidance as well as operation and acquisition services.
How will the services that LFF provides differ from more traditional farm lease arrangements?
Traditional leases are a great option for entering farmers because of less upfront costs and less risk but they generally lack long-term security. Generally, farmers leasing property lack a landowner that is focused on supporting the farm business and providing them the security required to feel comfortable making expensive land or infrastructure improvements.

Using private investment money, LFF will purchase a farm and design a mutually beneficial long-term lease of up to twenty years. From years five through twenty of the lease the farmer is given the option of purchasing the farm. The system was designed to make sure the farmer has the time to make a purchase.

We are providing sustainable farmers with a secure lease and a property that they can take ownership of from the beginning. If farmers lack the ability to stay on the land long-term, they won’t invest the time and resources required to make the land and their business more productive.

How does LFF identify properties for purchase?

In designing this fund, we knew that we wanted it to be farmer-driven. We do not seek specific farmland properties but rather are looking for talented farmers who have both the agricultural knowledge and skill and business acumen to be a successful producer. Farmers will find a property that suits the specific needs of their long-term business plan. This way they won’t be forced onto a specific property, and the fund isn’t forced to find a farmer that might fit a farm property.

What type of farmer is the fund designed to assist?

The fund is designed to support early stage farmers. We have defined this as someone who anticipates farming for the next twenty years. The farmer should also have enough experience to run a profitable operation on their own. Although we do not require organic certification we are seeking parties committed to sustainable agricultural practices.

How does the land acquisition and lease process work?

Once a farmer has identified a property the process begins with a conversation. If there is a mutual agreement and commitment to work together, we move into due diligence. This involves a review of the business plan, financial analysis, reference check and a visit to the existing operations (if they have one). The process generally begins with a phone conversation, working towards an in-person interview at a mutually agreed upon location. I do the first stage review but everything must be approved by the board of LFF.

If this process reveals a symbiosis between the fund and the farmer, LFF signs a letter of commitment which states that LFF will purchase the property and then lease it to the farmer.
Communication between the farmer and the fund is critical. If farmers are able to communicate with the fund then the fund is more able to communicate with our investors.

How long does the process take?

The time frame is dependent on the farmer’s needs. We can move as quickly or as slowly as necessary. Assuming a property has been identified, the minimum time for our review to be completed is about one month. Closing on the property may add a significant amount of time depending on the circumstances.

How will you determine lease rates? Will they be less than a mortgage?

Lease rates are a function of acquisition costs and rents are paid directly to LFF. Payments will start out considerably less than a mortgage with the understanding that starting a farm is difficult.

Tell us about your first farm acquisition:

It’s a 63 acre parcel located in Saratoga County, NY. It will be leased to a young couple and has the working title of “Saratoga Draft Power Farm” on which they intend to establish a free-choice on-farm vegetable Community Supported Agriculture (CSA) powered by draft horses. A 20-year lease with an option to purchase from LFF will allow them to focus capital on business and infrastructure development while still providing the necessary land security.

What are the fund’s goals?

Founded in 2014, LFF is a new business. We are in the process of our first major fundraising goal to raise one million dollars. We recently purchased our first farm and our intent is to finish this initial offering and purchase at least three more farms. Our initial target is to purchase six farms under two separate capital raises and evaluate our model from there. Also, we are looking for investors who want to support local sustainable farmers and understand the need for entering farmers to have access to patient capital.

Does demand exist for investment vehicles like LFF?

There is a huge growing space for high-impact, socially-driven investment models. A growing number of investors want to support local farms as well as community-oriented and local businesses. Investors receive a modest return but also have the satisfaction of supporting something that is tangible. This greatly differs from traditional stock investments in large companies which have no direct connection with investor’s communities. The impact investment space is growing very quickly.

What returns can LFF investors expect and what is the source of revenue?

LFF makes no promise of a return but our goal is to deliver a 3% return on an annual basis over the life of the fund. The revenue comes from rental income on our properties and when the farmer purchases the farm the investor’s original capital will be returned to them.

Are there any closing thoughts you’d like to share?

Our mission is driven by two goals- to support early stage farmers in securing long-term land access and creating an investment avenue that allows for people to make investments that they feel good about while achieving a return. The impact investment model is still developing and will accomplish many things that philanthropic money can’t. The amount of philanthropic donations that people are permitted to make is miniscule compared to the amount of investment capital in the world.

Funds such as LFF strive to be change makers in the way investments are made, the way people think about investments and the investment opportunities available.

Kevin Egolf, Co-Founder and Manager, Local Farms Fund-NY Foodshed LLC, can be reached at:
Phone: 860-918-3563
Visit their website at:

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