By Allison Spence
The female farmer may be regarded as a rarity, but we know women play a larger role in agriculture production than many think. Worldwide, more than 564 million women participate in agriculture, and nearly half of the agricultural labor force in developing countries is female. In the same stride, 30% of U.S. farmers are women, yet the face of farming is typically that of a man. Women make a strong contribution to food security and nutrition, at both the household and community levels.
Unfortunately, in some parts of the world, female farmer production is limited by barriers to finance, inputs, and extension services, as well as land ownership and rights. A common problem for most farmers in developing countries is limited access to capital, like bank loans. A recent solution developed to fill that gap is equity crowdfunding.
Women Investors Supporting Women Farmers
Similar to female farmers, there seems to be a lack of discussion about women in investing roles. Women’s activism to correct this is building, as evidenced by the rise of financing options for women entrepreneurs, gender lens investing, and now the #MeToo movement could bring a tidal wave of funding as women are inspired to stand up and speak out against sexism. Even so, while Warren Buffet and Peter Lynch are common household names, how many women investors are well known to the average American? Does this mean there's a difference between men and women investors? Actually, yes.
For the average investor, the gender wage gap has wedged its way into creating a gender investing gap. Time calculated the investing gap based on projections of the wage gap, typical asset allocation strategies, and a gender-specific salary curve. They found depending on the salary and the market’s performance, the real cost of the investing gap over a 35-year career span could be more than $1 million. Accessible investing opportunities, like those in agriculture, can help close the gap.
In fact, science says women are the perfect candidates to invest in agriculture. Women have more patience for long-term investments, like agriculture, because they understand returns from don't come immediately. Plus, whether as a learned trait or a natural emotion, women tend to be more nurturing than men. This nurturing tendency may make women appreciate the impact they are making when they invest. By investing in agriculture, these women are investing in a another great female with the important role of helping feed the world.
Equity Crowdfunding in Agriculture
As many sectors of agriculture have adapted with today's technology, agricultural finance has lagged behind. Ag lenders and banks are still one of the most common ways farmers and ranchers are getting capital, aside from the government and family funding. As female farmers are progressing, it's only right that agricultural finance progresses too. Harvest Returns, an online agricultural investing platform, has introduced crowdfunding as an option for those female farmers looking to expand or start their operation.
In crowdfunding, an equity partnership generally consists of a general partner (GP), or an active investor, and limited partners (LP), or passive investors. The GP makes all the decisions on operating an investment while the LPs simply invest money passively and collect returns from harvests or rents. Simply put, the farmers and ranchers are the GP who keeps complete control over the operation, running it however they choose, while the investors are the LPs who have no say in the operation, and help bring capital to the farm and receive returns from harvests.
High net worth women are looking to put their money into other women's work. Financial advisers are finding more options for clients who want to invest in funds that support women and girls. In the past couple years many companies have formed with the sole purpose of having women invest into women entrepreneurs, and now Harvest Returns has made it possible to invest in women farmers. It's time for us to pair together to truly make a difference in this world. There's no better way to join teams than by making female farmers more of a respected powerhouse than they already are, and having high-dollar investments in the food, fuel and fiber that keeps the world afloat.