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Interest-free financing of organic farming

Up until 3 years ago, STROhalm organised Pergola (also called CSA) 1 pilot projects in which farmers and consumers bundled their efforts in order to create sustainable circumstances for organic farming and as a result, trustworthy local organic food. One of the employees of STROhalm who worked in the Pergola, is still involved via the RenteVrijGeld Foundation in a practical follow-up at the organic farm 'Land en Boschzigt' in ’s-Graveland, in the Netherlands.

Why pre-financing?
In these projects a system of pre-financing has been used. The system was set up in such a way that customers paid in advance for farm shop products they would  purchase in the future. This money was used for providing interest-free loans to the farmer, which he has been able to use for necessary production investments like seeds, materials, machines etc. On this credit (contrary to loans at a bank) the farmer has  not been paying any interest.

Buying with value vouchers
Customers of the farm shop provide it with an interest-free amount of money for a period of 5 years. The customer himself determines the height of the amount, but there is a minimum of € 50,-. In return, the customer receives vouchers that he can spend at the farm shop. There, or at the farmer’s market stand he can purchase products with these vouchers. Another options for spending is, for instance, to  give the value vouchers as gift vouchers to someone else. If a customer cannot or does not want to spend the vouchers on products provided in the shop, the farmer will pay the money back before an agreed date.

Advantages for the farmer
•    Interest-free investments
•    Guaranteed sales potentials



Advantages for the customer
•    More involvement in a farming business
•    Contributes concretely towards maintenance and extension of organic food production

Model project
In the biological-dynamic market garden 2 'Land en Boschzigt' in ’s-Graveland (a village in the Netherlands) a pilot project with a value voucher bank started in December 2003. Over 40 customers bought value vouchers for an amount of more than € 15 000.
Land en Boschzigt takes the responsibility for the practical part of the project. The RenteVrijGeld Foundation developed the methodology and is responsible for the administration. STROhalm is financer of this pilot-project of interest-free financing of organic farming in the Netherlands.
This experiment, or pilot, will end in 2005 after which the results will be evaluated, analysed and presented.

More information
Since March 2005 there is written material available for interested organisations. It concerns biological-dynamic (or organic) companies, but also other companies that strive after a sustainable economy.

Partner: the RenteVrijGeld Foundation
Financer: the STROhalm Foundation



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