Investing in Communities

There's good news and new opportunities for businesses seeking to create social capital in their financing initiatives.

First, the Bad News

It’s not news that rural farming communities are suffering, but it’s still worth unpacking and analyzing the different layers. A key driver is depopulation related to farm sizes increasing to capture economies of scale.

Community economics suffer on multiple levels. House prices fall and properties become difficult to liquidate. Business dries up while schools and hospitals close, reducing employment opportunities for remaining local residents.

At the same time, community wellness suffers. Kids’ programming disappears, it gets more difficult to gather with neighbors at greater distances, and crime increases.

People congregate in and around the cities nearer to employment, increasing the distance between farmers and urban consumers - both geographically and culturally. This in turn has introduced tension about where food comes from and the impact of modern agriculture on the environment.

Community Impact Discrepancies

However, importantly, not every rural community suffers in all of these ways. Some have been pumped full of private industry investment by machinery dealerships, private seed breeding research farms, crop input retail chains, fertilizer and grain companies.

This only takes place where the land around the town is suited to high-yielding, high-input commodity grain production. Unless farm customer loyalty and future sales are in play, agribusiness corporations don’t see a return on investment from supporting local community initiatives.

Better Land, Defined

These days, society is valuing land uses and configurations differently than the parameters that motivate commodity-centric agribusinesses. There are signs that this is starting to turn the fortunes of leading regenerative agricultural communities.

‘Good land’ used to be defined solely by its productivity, i.e. how much grain you could pull off a field by pumping it full of modern industrial technology. Increasingly now, the value of farmlands is being defined by biodiversity, the functioning of the water and nutrient cycle, wildlife habitat, etc.

As a result, communities that missed out on the wealth creation that came with the potential to implement technology now present a strategic advantage and an investment opportunity for investors in regenerative agriculture. Because their forebearers didn’t farm over all the trees, fences and wetlands, communities like Clearwater, Manitoba boast a wealth of natural capital that local businesses are using to expand upon.

Introducing Covers & Co.

Anyone working in the regenerative agriculture startup space knows how difficult and rare it is to monetize products and services. In a movement geared to suck money out of the existing value chains, bypass middlemen, substitute low-cost biology for expensive synthetics, and empower farmers to make the best possible farmland management decisions for themselves… agribusiness startup success is hard won.

Also, younger regeneratively-minded farmers spend money differently than their parents did. Startups must present real, clear, and immediate economic value to farm customers, and be needlepoint-focused on their features and benefits.

Entering the scene in 2019/20, Covers & Co. rolled out multi-species pasture seed blends as an alternative to forage corn, which at the time was the predominant monocrop for grazing on cow-calf farms. Marketing themselves as a ‘plant diversity company’, the business provides seed customers with events, content and education that has inspired loyalty - and driven hockey-stick-shaped sales growth.

Another key success factor is their focus on a farm demographic that the rest of the industry has ignored for decades. As the merits of integrating livestock and managed grazing back into cropland become better recognized, the combination of products and services offered by Covers & Co. is especially magical to farmers starting the transition into regenerative agriculture.

The community foundation of Clearwater, Manitoba where the business is run out of will be the next beneficiary of Covers & Co.’s success. All proceeds from their upcoming Field of Dreams event will be donated and spent on youth programming, building projects, and other important initiatives critical for rural vibrancy and resiliency.

Challenge!

Prairie Routes is one gold sponsor for this event, which at $5,000 is a heck of a deal for a regenerative business transition planning consultancy to get in front of a big group of leading farmers. It’s also a no-brainer for building social capital into the business.

How many readers of this research report agree? Contact karly@coversandco.ca to join in the fun and inspiration that comes with supporting this impressive business, and their dedication to giving back to the local community, all right in the hotbed of regenerative agriculture that nurtured them.