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Controlled Environment Agriculture: the Inside Scoop on Indoor Ag

Raging wildfires. Extreme droughts. Violent hurricanes. Rogue tornadoes… Nature is unpredictable.

2020 was a record-setting year for natural disasters, and 2021 has already witnessed numerous extreme weather events. Meanwhile, experts predict that the frequency and severity of storms is only rising.

California’s Dixie Wildfire, August 2021.

Nature is unpredictable, yet her whims govern our most fundamental need: food. Worldwide, droughts, flooding, and famine are an all too familiar story. One in every nine people is hungry, while one in three is malnourished.

As our global population nears 8 billion, it is imperative that we create a reliable, resilient agriculture system, one insulated from nature’s caprices. A solution may lie in CEA.

What is CEA?

CEA, or Controlled Environment Agriculture, wields cutting-edge horticultural, engineering, and computer technologies to produce high-quality crops in efficient, indoor environments. Bringing crops indoors shields them from pests, disease, and extreme weather, permits year-round growth, and facilitates cultivation of plants in any climate zone.

A rapidly evolving field, CEA nevertheless started simply: beginning in the first century A.D., the Romans used rudimentary greenhouses to protect crops during the winter. Over time, greenhouses became more sophisticated: their walls were built of glass, warm water heated them in winter, and electric light bulbs provided supplemental lighting. Today, advanced greenhouses optimize plant growth conditions: computer systems control brightness, temperature, humidity, and even carbon dioxide levels.

Vertical Farming: the Up- and Downsides

Traditional greenhouses, however, are only the beginning of CEA’s many techniques. Global population projections—over 10 billion people (80% of whom will live in cities) by 2050—encourage scientists to develop new, compact farming methods like vertical farming. Vertical farms turn traditional farms sideways. In vertical farming, plants are stacked one atop another as they grow. The resulting farm is both space efficient—vertical farms can be placed in basements or old shipping containers—and water efficient—vertical farming’s water use is 5% that of standard agriculture.

Nevertheless, vertical farming has downsides. One major challenge is lighting. Each plant contained in a vertical stack requires adequate light to grow. Because the uppermost plants shield lower plants from overhead light, each individual layer of a vertical farm must also be lit. The resultant need for numerous LED lamps increases input costs (and, in turn, crop prices) and lowers vertical farming’s energy efficiency. Additionally, vertical farms pose challenges to workers, who often spend their days ascending and descending costly, cumbersome scissor lifts to complete tasks like planting and harvesting on each layer.

A vertical farm.

The benefits of indoor horizontal farms, therefore, should not be underestimated. One innovative horizontal farming operation is Pure Green Farms. Located in South Bend, Indiana, Pure Green Farms’ horizontal greenhouse relies on natural light and uses minimal artificial lighting to increase energy efficiency. Additionally, the entire planting and harvesting process is automated, creating a more uniform product and labor savings compared to traditional production.

Horizontal farms also offer opportunities to combat microclimates, unintentional byproducts of CEA. One greenhouse contains numerous microclimates—slight shifts in location can significantly alter plants’ growing conditions. For instance, a plant directly beneath a growth lamp may be subjected to higher temperatures and brighter light than the plant beside it. Such inconsistent growing conditions in turn produce inconsistent crops.

Purdue University researchers recently constructed an automated horizontal greenhouse to address this problem: plants constantly circulate around the greenhouse on conveyor belts. Consequently, no plant remains in one microclimate for too long, and all plants are exposed to nearly uniform conditions. This innovation allows horizontal farms to produce more consistent crops.


In both vertical and horizontal CEA agriculture, farmers are looking beyond soil. For instance, many CEA farms are hydroponic: plant roots are submerged in regulated, nutrient-rich water solutions rather than soil. Hydroponics not only allows detailed regulation of nutrient and pH levels but also minimizes water usage by recirculating water. Further, hydroponics allows plants to grow more quickly and closer together.

A hydroponic greenhouse.

One variation on hydroponics is aeroponics: plant roots are placed not in soil but simply in the air. Surrounded by oxygen, vital for cellular respiration, plants are frequently sprayed with mist containing water and dissolved nutrients. This process not only reduces water usage by up to 98% but also increases plant nutrient levels, offering potential health benefits for consumers.

Another twist on hydroponics is aquaponics, in which a plant growth environment is coupled with a fish tank. Fish provide nutrients for the plants, which in turn clean the water for the fish. Nevertheless, the aquaponic system is not perfectly self-sufficient: aquaponics requires significant electricity to heat and circulate water and often utilizes supplemental water filtration systems.

Cost-Benefit Analysis

The benefits of CEA are numerous. By growing plants inside, CEA minimizes or even eliminates the need for pesticides, which are not only potentially detrimental to human health but are highly water-intensive to produce. Additionally, grown in optimal conditions, plants mature faster and more consistently. With CEA, crops can be grown in population-dense urban areas; thus, fresh, nutritious, locally grown crops can be delivered at reduced transportation costs.

CEA’s advantages, however, come at a high monetary cost. CEA technology is expensive. Simply building a modern greenhouse equipped with LED lights, O2 and CO2 monitors, and ventilation systems is a costly enterprise. Additionally, CEA requires a constant supply of electricity, which is both expensive and poses environmental risks. Even greenhouses powered solely by renewable energy create challenges: solar panels, for instance, are expensive. Further, using solar energy to simulate sunlight for indoor crops seems convoluted, especially considering that outdoor crops simply use free, natural sunlight. CEA also requires space. In urban areas, where CEA offers great potential, real estate is especially expensive.

The many costs of CEA often translate to higher prices for consumers, especially for commodity crops. For instance, producing a loaf of bread with CEA-grown wheat costs roughly $11. Currently, CEA is most economically viable for expensive, highly perishable specialty crops, such as tomatoes and lettuce, grown on a large scale.

Investment Opportunities

Although CEA is not set to replace traditional agriculture in the near future, investors are nevertheless exploring CEA’s potential for feeding our growing population sustainably. There exist several private fund investments in the space. Ceres Partners, for instance, is investing in greenhouses, aquaculture, and specialty crops as well as CEA artificial intelligence systems. Equilibrium Capital, a sustainability-focused investment company, manages an extensive CEA private equity fund platform.

An exciting new investment opportunity in this area is Global X AgTech & Food Innovation ETF – KROP, first listed on Nasdaq in July of 2021. KROP identifies and invests in trailblazing companies in the food and agriculture sectors. The focus of these companies ranges from food waste minimization to agricultural robots to dairy alternatives to CEA. KROP has only $2.3 million under management today, but we will continue to monitor its development as a potential purposeful investment in the essential food and agriculture sector.

As the global population continues to grow, nature’s unpredictability poses a hazard to the traditional agricultural system. Boasting efficiency and reliability, CEA offers a promising niche complement to traditional outdoor agriculture and an exciting opportunity for sustainable innovation for the benefit of humanity and the planet. To learn more about sustainable, ethical investing, contact Servant Financial today.

Investing with Purpose: Mid-Year Reflections and Resolutions

Investing with Purpose isn’t an oxymoron. At Servant Financial, we believe that profit and principles go hand-in-hand. In early 2021, we identified five purposeful investing opportunities for this year and beyond. In light of the COVID pandemic, turbulent economic conditions, and the accelerating sustainability movement, we predicted growth in ESG investments, alternative investments, essential businesses, inflation hedges, and education.

As we pass the halfway point of 2021, we take the opportunity to reflect: were our predictions directionally accurate? Simultaneously, we look forward: what developments do we expect over the remainder of the year and beyond?

1. ESG Investments

ESG, or environmental, social, governance, refers to a company’s attitude and behavior toward its employees and community. ESG investing prioritizes the wellbeing of employees, society, and the earth. This trend is especially appealing to millennials and women, who continue to demonstrate their support for ESG investments in 2021.

In the first quarter of 2021, US sustainable funds set a new net inflow record of $21.5 billion. One analysis of 27 ESG funds from December 31, 2020 to May 17, 2021, found that 16 of the funds outperformed the S&P 500. ESG has become a momentum factor, as ESG funds and their underlying equities attract more fund flows which beget more fund flows. Experts predict that the sustainability market will only continue its tremendous growth—by 2030, the ESG market could reach $1 trillion.

Servant Financial’s ESG research continued in 2021. In recent articles, we explored markets and trends in energy storage, organics, and carbon credits. At Servant Financial, we are committed to learning and innovation to help you invest in a sustainable future.

2. Alternative Investments

Alternative, or nontraditional, investments not only diversify your investment portfolio but have tremendous potential to benefit communities in unique ways. Alternative investments look beyond traditional stocks and bonds: real estate, infrastructure, gold, and bitcoin are just a few of the myriad alternative investing possibilities.

Servant Financial has identified farmland as a meaningful and profitable alternative investment. Traditionally, the farmland market has boasted high returns and low volatility; furthermore, investors profit not only from land value appreciation but also regular rent collection.

Farmland, however, is more than a vehicle for profit—it provides a means for doing good. In January 2021, Servant Financial partnered with Farmland Partners (NYSE: FPI), the farmland industry’s leading REIT,  to launch the Promised Land Opportunity Zone Fund. Promised Land purchases farmland in Qualified Opportunity Zones, economically-challenged areas designated by the IRS for preferential tax treatment. After acquiring the properties, Promised Land improves the farmland, perhaps by upgrading irrigation and drainage systems, increasing grain storage, or installing solar panels or wind turbines. In turn, land improvements benefit investors and farmers and revitalize rural communities.

Since its launch, Promised Land has acquired over 3,700 acres of farmland in three states, and the fund continues to grow. Witnessing our Promised Land vision materialize encourages us to continue to invest with purpose.

3. Essential Businesses

Over the past 16 months, the tumultuous events of the COVID pandemic have underscored the necessity of essential businesses. Crisis forced reconsideration of priorities, needs, and wants: ultimately, humans need food, shelter, healthcare, and energy. Over the past months, essential industries have demonstrated substantial growth, with impressive performances from the energy, real estate, and healthcare sectors.

Investing in these essentials, however, is not only financially savvy but socially impactful. In a recent article on the food industry, we highlighted the prevalence of food insecurity in America. Tragically, over 10% of American households experienced food insecurity in 2019. Further, about 19 million Americans live in food deserts, areas with limited access to food. Especially vulnerable to food insecurity are rural counties: 87% of the least food-secure counties are rural.

US food desert map.

These surprising, grievous statistics motivated us to take action. Why not augment Promised Land’s strategy—investing in and actively improving farmland in rural Opportunity Zones—to combat food insecurity in these communities? Currently, we are mapping the overlap between food deserts and Opportunity Zones. After identifying target counties, we plan to evaluate strategies and partnerships to invest in and improve food access in these vulnerable regions. Our two-pronged approach—improving both farmland and food access—will address food insecurity on both the production and distribution levels.

4. Inflation Hedges

Groceries, gas, hotels, hospitals: as any post-COVID consumer can attest, prices are on the rise. In the past year, prices have increased by 5.5%, the highest rate of inflation since 2008. While economists foresaw price jumps in the wake of the economic emergence from the pandemic, inflation rates have been higher than predicted. Although many experts are hopeful that inflation rates will dissipate as economic conditions normalize, continued inflation is a distinct and alarming possibility.

High inflation rates threaten investors; investment shares may be stable or increase in price, but if their growth rates cannot keep up with inflation, then these assets lose real worth.  For example, US 10-year treasuries nominally yielding 1.3% have a negative real yield of (4.2%) with an inflation rate of 5.5%. Intent on protecting the value of their assets, investors are increasingly turning to inflation hedges, investments which boast relatively stable or diminishing supplies, i.e. scarcity value. While the value of the dollar decreases, inflation hedges like gold, bitcoin, commodities, and real estate resist price fluctuations or may rise in value with inflation.  For example, farmland values are highly correlated with inflation.

Correspondingly, the prices of inflation-protected assets are important indicators of current inflation trends. Although gold value has slightly declined in the past twelve months, prices remain significantly higher than before the outbreak of the pandemic. Meanwhile, bitcoin prices have fluctuated greatly over the course of the pandemic; nevertheless, bitcoin prices are currently three times the price of twelve months ago.

As Federal Reserve Chairman Jerome Powell’s recent comments indicate, inflation rates will likely remain high in the coming months; the Fed has signaled markets that it will allow near-term inflation to run higher than its 2.0% inflation target. Consequently, savvy investors should consider safeguarding their portfolios with inflation hedges.

5. Education

Education is both personally and economically empowering. Teaching skills essential for high-wage jobs, education develops human capital, increases earning power, and alleviates poverty. According to UNICEF, an individual’s income increases 10% with every year of education received.

Conversely, barriers to a quality education hinder development; this fact has caused particular alarm during the pandemic, as many students were forced to pivot to virtual or hybrid learning. The fallout from this transition is staggering: 97% of educators report that students experienced at least some learning loss, while 53% described that learning loss as significant. This learning loss translates to real earning loss. McKinsey & Company predicts that white students will experience a 1.6% annual income reduction and Black students a 3.3% annual income reduction because of substandard virtual learning.

Educators report learning losses during the pandemic.

As these disturbing statistics indicate, improving and investing in education and educational infrastructure is urgent. Edtech companies are one appealing option. Innovative technologies enable independent learning and could allow students to make up for learning loss. Further, as the pandemic’s resolution remains uncertain, developing more effective virtual learning technologies and investing in broadband and other infrastructure in low-income communities is crucial.

Charter schools, high in demand especially in low-income communities, provide another investment opportunity. Investors can provide low-interest loans or purchase charter school bonds.

Finally, we believe there exists a strong correlation between Opportunity Zones (low income communities), food deserts, and educational deserts. In the coming months, we plan to explore this overlap and devise investment strategies to improve the lives of children and families across the country.


2021 has witnessed both frustration and excitement, turmoil and healing. Although the details of our post-COVID world remain uncertain, we are hopeful that the future will bring stability and opportunity. As we reflect on the past six months, we remain confident that our investments can build a bold, auspicious tomorrow. ESG investments, alternative investments, essential businesses, inflation hedges, and education provide opportunities to make a profit while making a difference. From farmland to food access, education to renewable energy, investing with purpose addresses societal challenges with integrity, creativity, and compassion.

Food: from Farm to Future

Personal technology devices. Online delivery services. Life insurance. Even gas and oil… Technically speaking, all of these items and services are optional; although we might not enjoy the resulting lifestyle changes, we could live without them.

What isn’t optional? Food.

Two major consequences derive from our dependence on food and agriculture. First, food and agriculture are enduring markets. Though perhaps not as lucrative or thrilling as Big Tech investing, agriculture and farmland are not going away any time soon. Historically, the farmland market has been generally resistant to market fluctuations of boom and bust economic cycles. Farmland is an alternative investment, like traditional real estate in office or multifamily buildings, that provides unique opportunities for diversifying investment portfolios given its low correlation to traditional stock and bond portfolios. Today, however, there are limited options in public, liquid securities markets to invest in farmland.

Secondly, food is non-negotiable for human survival. Therefore, as a species, we have a philanthropic responsibility to ensure that all people have reliable access to nutritious food. Investing in agriculture, food distribution, and land improvement is not only economically rational but ethically impactful.

Food Security

World hunger— the phrase often conjures images of malnourished residents of Third-World countries. Tragically, hunger is a major issue not only in developing countries but even in highly industrialized nations. 1 in 9 Americans suffers from food insecurity, defined by the USDA as “limited or uncertain access to adequate food.” This means that 26 million adults and 11 million children lack reliable access to nutritious food in the US alone. Those figures suggest systemic problems and perhaps endemically poor allocation of an abundant resource.

COVID-19 has only worsened the food insecurity crisis. Northwestern researchers estimate that 23% of all American households and 30% of US households with children experienced food insecurity in the past year. In a nation where annual food waste in family households totals 54 billion pounds, manufacturers and restaurants throw away 52 billion pounds of food, and 20 billion pounds of food grown is left to decay in farm fields, food waste and insecurity are unacceptable byproducts of inefficiencies in our modern, technologically advanced society.

An illustration of annual food waste in America


The issue, clearly, is not an inadequate supply of food; the US produces enough food to nourish every single American. Instead, distribution is the primary challenge: how do we ensure that food is efficiently and compassionately apportioned? To solve this question, we must first understand food flow networks.

Food Flow Networks

Food flow networks, or interconnected food supply chains, map the often winding and unpredictable path that food travels from farm to table. Certain foods follow a straightforward route—milk, for instance, is first bottled, then pasteurized. Afterwards, it is shipped to distribution centers and then transported to supermarkets. The same milk, however, could take a more circuitous path, perhaps being converted into cheese, powdered milk, or yogurt. Each of these dairy products could be packaged and distributed alone or as an ingredient in other processed foods.

Food flow networks not only outline the steps in the distribution process but also consider geography. Where food is produced, the distance it travels, and where it ends up are critical logistical elements to maximizing food security.

Food Production

The top ten crop-producing states are California, Iowa, Nebraska, Texas, Minnesota, Illinois, Kansas, Wisconsin, North Carolina, and Indiana. Together, they account for nearly 55% of US crop sales. This concentration reflects these state’s weather and topographical endowments and the trend toward larger farms—as the size of the average American farm increases, the total number of farms has been decreasing. Consequently, the percentage of farmland operated by small-scale farms is decreasing. The graph below illustrates the evolution over time from small, primarily subsistence farms to larger, primarily industrial farms.

Size and number of farms from 1850 to 2019

US policy safeguards the strategic aspects of our nation’s food supply and so may favor large, wealthy farms over their smaller counterparts. According to the Heritage Foundation, commercial farms, 10% of all farms in the US, received 73% of commodity payments and 83% of crop insurance indemnities in 2016. Small family farms, the remaining 90% of US farms, received only 27% of commodity payments and 17% of crop insurance indemnities that same year.

Farm concentration is highly controversial. Supporters assert that industrial agriculture increases efficiency and output. Critics from across the political spectrum, however, argue that industrial farming impoverishes rural communities, damages the environment, and harms consumers.

This controversy should be viewed in light of facts rather than emotional appeals and generalizations.  Despite its imperfections, the modern agriculture system certainly has improved in efficiency and output. According to John Deere, 83 hours of labor and 2.5 acres of land were required to produce 100 bushels of corn in 1850. As of 2016, only 2 hours of labor and 0.6 acres of land were necessary. Moreover, despite concerns about environmental harm from farming, recent technological advances allow farmers to decrease pesticide, fertilizer, land, and water usage. Sustainable and organic farming technology, still a budding field, benefits environmental and community health and lowers food prices for consumers.  More on this nascent, sustainably-focused competition to industrialized farming may appear in future articles.

Food Processing

After food is harvested, it is taken to be processed. Like farming, food processing is growing more concentrated. Food processing facilities, largely located in California, New York, and Texas, are increasing in size, while food processing companies are likewise consolidating.

Companies also increasingly employ vertical integration, the practice of controlling multiple steps in the food production process. For instance, a beef company might own cattle-breeding facilities, feed mills, slaughterhouses, and processing plants. Once again, consolidation and integration are controversial and complex trends. Much like other U.S. sectors such as healthcare, certain elements of the U.S. agricultural and food chain have pursued efficiency and have concentrated operations to such an extent that the system has no redundancies and lacks resiliency should their operations be disrupted.

The COVID pandemic illustrates these difficulties. When just a few large groups lead the agriculture and production markets, a disturbance in any producer disrupts the food supply for many consumers. Thus, COVID outbreaks in meat-processing plants forced farmers to euthanize 2 million chickens and 300,000-800,000 pigs, while variations in consumer demand left the food supply chain spluttering. To avoid future food supply disruptions, the food network of the future must balance efficiency and redundancy, large industrial farms to promote food security in commodity-type products like corn, soy and wheat and small, niche community farms for organic or fresh “farm to table” quality products like fresh vegetables, fruit, and nuts.


Finally, food flow networks culminate with distribution to consumers. Numerous factors influence food distribution. Businesses consider not only population and location but socio-economic conditions as well. Consequently, low-income and sparsely populated areas face unreliable food supplies. According to Feeding America, 64% of the least food secure counties face exceptional poverty. Regionally, rural counties are disproportionately food insecure, and the South is the least food secure area. Significant racial disparities also exist, with minorities facing food insecurity at alarming rates.

Rural versus urban and regional food insecurity in America

Many highly food-insecure areas are categorized by the USDA as “food deserts,” places where adequate, nutritious food is not readily accessible. NPR reports that 19 million Americans live in food deserts. Several large grocers and retailers, such as Walmart and dollar stores, have attempted to fill this gap. The chains’ entrance into food-insecure areas, however, is controversial—these large companies can undercut local grocers, causing more concentration in the local food market. Meanwhile, dollar stores, with appealing price tags (though high unit costs), generally supply processed foods rather than nutritious produce. Unfortunately, the prevalence of processed foods reinforces the tragic link between poverty and obesity.

Strategies and Solutions

Opportunities to combat food insecurity exist at all levels of the food flow network. Servant Financial is presently focusing its resources on potential investment opportunities in a “barbell” of impact. First, we are investing in productivity improvements at the start of the food chain on the farm. Second, we are exploring innovative investments in food distribution infrastructure to serve those communities with the greatest food insecurity: food deserts. We believe this two-part investment approach will improve food production and ultimately mitigate the effects of poverty and food insecurity at the consumer level.

Farmland Improvement

Farmland improvement targets the very roots of the food flow network. Investing in farmland enhances food quality and supply as well as human and environmental wellbeing. As noted above, farms are rapidly consolidating—large, industrial farms are gobbling up their smaller counterparts. The economics of highly mechanized farming and the need for scale to spread the fixed cost of the equipment over more acreage make it very difficult for very small farms (sub 100 acres) to succeed unless they simply become a farmland owner and lease the farm to a scaled operator.  This behind-the-scenes operational consolidation has been occurring across multi-generational landholding and farm-operating families for decades.

Investing in farmland in Qualified Opportunity Zones (QOZ) seeks to improve the productive capacity of farmland and create jobs and economic benefits to rural American communities.  QOZs are designated economically-challenged regions in which investment is encouraged by preferential tax treatment. Investors can defer capital gains taxes rolled into a QOZ until the earlier of 2026 or as long as they hold the investment.  Additionally, investors benefit from a 10% exclusion of the capital gain deferred if they maintain the investment for at least five years.  Further, if the taxpayer holds a QOZ investment for 10 years there is a permanent exclusion on the appreciation of their investment.

Farmland improvement in QOZs revitalizes small farms in struggling regions. Investments take various forms, from improving water drainage, to building new grain storage, to enhancing irrigation systems, to improving soil quality, to developing renewable power generators and adjacent energy storage. Ultimately, these investments impact farmers, who benefit from farming productivity improvements and increased profits; laborers, who experience greater job security; and consumers, who have more reliable access to locally-grown food. Indeed, the benefits continue, as investing in farmland in QOZs may even be supportive of sustainable and organic farming practices.  Stay tuned for more information on Promised Land Opportunity Zone Fund I, LLC’s farmland investment activities and its strategic alliance with Farmland Partners.

Food Banks and Pantries

Food banks and pantries address hunger directly by serving food-insecure families. Food banks are depositories that store large quantities of food. Items are transported from food banks to food pantries, local centers generally run by community-based not-for-profits which distribute food to individuals.

Most items in food banks and pantries are donated by individuals and businesses. Farms, restaurants, and grocery stores often have more food than they can sell. By redirecting this supply to food banks, businesses not only nourish our communities but combat the massive systemic food waste outlined earlier. Federal programs, too, supply food banks by purchasing items from farmers. In 2020, such USDA programs provided 1.7 billion meals. Finally, food banks and pantries can purchase food themselves with donated money.

Despite their noble goal, food banks do face some criticism. Because they are often volunteer-run, food banks usually operate on a limited schedule. Reliant on donations, many food banks offer a limited selection, often lacking in fresh dairy and produce. The overall quantity and variety of food available at food banks can be low. Yet another dilemma is the stigma surrounding food pantries: many people who utilize food pantries experience feelings of shame and alienation and complain of unpleasant atmospheres. Unfortunately, this stigma discourages food bank use. A 2018 study among food-insecure college students revealed that stigma was the main obstacle to food pantry utilization.

In spite of these drawbacks, food bank use increased during the pandemic. Along with unemployment rates, the demand for food banks and pantries soared. Since March 2020, distribution by US food banks has grown by about 55%. Sadly, nearly 40% of food pantry patrons at the beginning of the pandemic were first-time users.

Increasing demand as well as criticisms of food pantries provide opportunities for improvement. One especially creative pantry network is the Greater Chicago Food Depository, or GCFD. GCFD recently provided grants to community not-for-profits to open four new pantries, which, when complete, will resemble traditional grocery stores. GCFD aims to facilitate the creation of pantries more responsive to community needs and desires. For instance, one community-based not-for-profit working with GCFD plans to accept feedback on food selection and to implement an online order and delivery service.

Patrons visit a GCFD food pantry during the pandemic

GCFD wants the pantries to be more than food distributors. They envision a pantry that is also a community center. Patrons will be able to enjoy a cup of coffee; participate in exercise, cooking, nutrition, and budgeting classes; send their children to extracurricular programs; and shop for food in one convenient, attractive space. Visiting these revitalized food pantries will not be dreary: it will be uplifting.

One successful, large scale community-based food security operation with limited publicity are the 138 bishop’s storehouses run by the Mormon Church.  The bishop’s storehouse system is a network of church-owned and -operated commodity resource centers. They function much like cashierless retail grocery stores, such as Amazon Go, but with a philanthropic wrinkle: goods cannot be bought at storehouses. Instead, they are distributed to needy individuals under the direction of church leaders.

The storehouses stock basic food and essential household items, produced largely from Mormon-owned agricultural properties, canneries, and light-manu­facturing operations. The entire system is vertically integrated from farming and harvesting through processing and distribution.

Needy recipients are invited to work or render service in various ways in exchange for goods.   This reciprocal exchange helps maintain the personal dignity and responsibility of the recipients, who do not view the food solely as a handout. All storehouse work is performed by volunteers.  The contribution of time, talents, and financial resources sustains the storehouse and the fabric of the community at large.

Yet another instance of innovation is Feeding America’s free-market approach to improving the efficiency of food distribution to its network of food banks and pantries.  Previously, Feeding America treated all food as interchangeable from an allocation and distribution perspective. Shipments to individual food banks were measured by weight rather than by nutritional variety and composition. Hindered by this defective central planning, Feeding America struggled to allocate food rationally and fairly. For instance, Feeding America sent loads of potatoes to Idaho food pantries, where locally-grown potatoes were bountiful. Meanwhile, food pantries in Alaska, short on potatoes, received an excessive supply of pickles.

Seeking to improve, Feeding America consulted University of Chicago economist Canice Prendergast. Prendergast realized that Feeding America’s central planning was hampering their efforts. The large, central organization lacked specific, local knowledge about the supplies and needs of individual food banks. To address this issue, Prendergast advocated a free-market approach to resource allocation. Feeding America created its own internal currency; the neediest food banks receive the largest amounts of “money,” while better-off food banks receive less currency. Using this money, individual food banks bid for shipments of food on an online platform. Food banks can also save up their money so they can bid more aggressively on particularly needed items. For instance, a bank might save its shares to purchase a large supply of peanut butter, a valuable food pantry favorite. Meanwhile, the prices of fresh produce and dairy generally stay lower because these perishable goods must be used immediately. Using this system, food banks in Feeding America’s network receive supplies that they and their customers desire and need.

Volunteering is not the only means of revolutionizing food pantries. With reimagination comes the opportunity for investment.  Long-term, low-interest loans allow nonprofits to open or improve food banks and pantries. Investors can also give short-term bridge loans, or grants much like GCFD, to provide nonprofits with much-needed capital to improve their infrastructure. These investments can be risky but rewarding: food pantries ultimately improve the health and wellbeing of our communities.

To win the battle against malnutrition and food insecurity, we must address both food production and distribution. Investing in farmland improvements and community-based food storehouses are just two possible areas of innovation in the food network that we are cultivating. The ultimate purpose of investing in farms and food distribution is not in the production and consumption functions but in sustaining the future of humanity.  Contact Servant Financial to learn more about investing with purpose in food and agriculture.