Dante Hesse runs a small organic dairy farm in Ghent, N.Y. Hesse lets his herd of 60 or so cows graze on open pasture. He avoids giving them growth hormones and antibiotics. Hesse says his cows might live a decade or more, and they stay productive longer than the average for more industrial farming.
A couple of days each week, Hesse makes the trip from his Milk Thistle farm to farmers markets in New York City. Even before he finishes setting up his stand, customers start lining up for his milk, at $5 a quart. Hesse says he could sell even more milk — plus butter and cheese — if he could just build a processing plant right in his barn.
For that, he needs to raise about $700,000 — a sum of money that has been hard to come by in the current recession and credit crisis. Hesse has a particularly hard time borrowing money because he has nothing to back up the loan. He rents his barn and his land. He's got no co-signers. Last fall, unable to get a loan through ordinary means, he turned to his customers and asked them for help.
"We feel pretty strongly at this point that there are a lot of people out there who are interested in helping, and the way the economy is now, one argument might be that it's a bad time to be doing something like this," Hesse says. "But I think the inverse is true, that it's actually a good time because people are scared of the stock market, and they know that food is a vital part of survival. And local food is going to become very important in the very near future."
Hesse is offering 6 percent interest for an unsecured loan of $1,000. His business plan taps into a pair of burgeoning movements — the first characterized by an interest in organic, locally grown food; the second by an environmental approach to economics.
That approach is championed by Woody Tasch, a venture capitalist and author of the new book Inquiries Into the Nature of Slow Money. Tasch argues that money is flying around the globe too fast. He rows hard against mainstream economics, which says growth is good and the marketplace knows best. "I've just had it with all of this so-called 'making-a-killing expertise,' which is actually killing the planet," he says. "I think one of the antidotes is daring to move to the other side of our brain, and kind of put down all that economic and fiduciary nonsense and just act like regular people."
Tasch and his Slow Money Alliance take their name and inspiration from the Slow Food movement, which started 20 ago in Italy. Tasch isn't arguing against all growth. Rather, he's saying that some as yet undefined portion of capital should be steered toward smaller, local farms and businesses that are friendly to the environment. His group aims to raise as much as $100 million this year, then let regional funds start investing in businesses they like.
The idea of investing in a farmer like Hesse, who's got no collateral to back up a loan, might seem overly risky to some. But one customer at the market stops to ask Hesse about the deal.
Josh Goldstein of Brooklyn says he and his wife are interested in lending money to Hesse. They've lost faith in the stock market, and are ready to put their faith instead in a business and product they can see — and taste.
"The milk, first of all, it's like no milk you've ever had," Goldstein says. "We've been looking to invest some money in local green companies. We just thought it looked like a good opportunity — somebody local, somebody we know, somebody we can trust."
For now, Hesse is putting the finishing touches on his plan to seek investments from his customers. He's also hoping he might get the backing of an outfit like the Slow Money Alliance. He knows it might take him a while to get where he's going. In this economy, he's almost got no choice but the slow road.