Black farmers in the United States have faced significant challenges and discrimination over the past century, resulting in a sharp decline in their numbers and land ownership. While VC investment in the agtech space has been booming, Black farmers have struggled to access the financial resources needed to thrive in this market. However, a nonprofit organization called the Black Farmer Fund is working to change that by providing economic and social opportunities to Black farmers and agricultural businesses, particularly in the Northeast.
Key Takeaway
The Black Farmer Fund is working to address the racial wealth gap by providing economic and social opportunities to Black farmers and agricultural businesses in the Northeast. Despite the booming VC investment in agtech, Black founders have struggled to secure adequate funding, leading to a significant disparity in the agricultural industry. Through its debt fund, the Black Farmer Fund aims to bridge this gap and empower Black farmers to thrive in the market.
A Troubling History of Discrimination
In 1910, Black farmers made up around 14% of all farmers in the U.S. and owned over 16 million acres of land. Today, only one in 100 farmers are Black, owning less than 5 million acres. This decline in land ownership has resulted in a staggering loss of $326 billion in land value. Black farmers have also faced discrimination from the U.S. Department of Agriculture (USDA), leading to ongoing lawsuits against the agency.
The Marginalization of Black Founders
Despite the growth of VC investment in the agtech sector, Black founders have struggled to secure funding and support. Crunchbase research reveals that since 2018, only $98.6 million out of a total of $39.4 billion has gone to just five Black-owned agtech companies. Coupled with alleged discrimination from the government, Black farmers have been left marginalized and unable to access the financial resources that their white counterparts enjoy.
The Birth of the Black Farmer Fund
In response to these disparities, Karen Washington and Olivia Watkins established the Black Farmer Fund in 2017. This nonprofit organization aims to address the racial wealth gap in agriculture and build community wealth for Black agricultural businesses in the Northeastern region of the U.S. The fund currently supports 703 Black-owned farms out of a total of 196,000 in the Northeast.
Financial Support for Black Farmers
The Black Farmer Fund operates as a nonprofit with a debt fund component. In 2021, it raised an oversubscribed pilot fund of $1.1 million from investors and institutions, which was then invested in eight businesses. The organization is currently in the process of raising its second fund, with a target of $20 million. To date, it has raised approximately half of that amount.
As a debt fund, the Black Farmer Fund provides low-interest community notes and grants, offering financial support ranging from $1,000 to $3 million. This initiative aims to bridge the racial wealth gap and provide Black farmers with the economic opportunities they need to succeed in the agriculture industry.
