VC Office Hours: Unlocking the Farmers’ Market with Black Farmer Fund
Black farmers seem to have received the rough end of every stick this past century.
In 1910, they represented around 14% of U.S. farmers and owned over 16 million acres of land. Today, one in 100 farmers are Black, owning less than 5 million acres and losing $326 billion in land value. Farmers are suing the USDA for alleged discrimination.
VC investment in the agtech space has been booming these past few years, and many farmers also receive some type of subsidized funding, whether from the government or nonprofit organizations. These opportunities do not appear to be trickling down to Black founders, however. Crunchbase found that since 2018, $98.6 million out of $39.4 billion have gone to just five Black-owned agtech companies. This, alongside the government’s alleged discrimination, means that Black farmers have been marginalized from accessing the right financial resources they need to survive in this particular market.
It was for these reasons that in 2017, Karen Washington and Olivia Watkins created the Black Farmer Fund. The fund provides economic and social opportunity to Black farmers and agricultural and food businesses in the Northeast with the goal of helping build community wealth for Black agricultural businesses throughout the region. There are around 703 Black-owned farms across the Northeast out of 196,000 total, Watkins said, adding that in New York alone, the average Black farmer makes –$906, while white farmers make around $42,000. “There is a massive racial wealth gap in agriculture and across industries,” Watkins said.
The fund is technically a nonprofit with a debt fund attached. It raised an oversubscribed $1.1 million pilot fund in 2021 from investors and institutions, which it then invested into eight businesses. It is raising its second fund with a target of $20 million and has hit about half that amount so far, Watkins said. As a debt fund, it offers low-interest community notes and grants, writing checks ranging from $1,000 to $3 million.
