- By Kevin Moynagh
Glencolton Farms was formerly a privately owned farm of the Schmidt family and was established in 1983 to provide wholesome food to a rapidly growing market of informed consumers and put culture back in agriculture.
Agri-Cultural Renewal Co-operative Inc. (ARC) is a co-operative of workers established since 2004 united in diversifying the farm by integrating agriculture with culture and nature for the betterment of the land and its surrounding community. Glencolton Farms and ARC have amalgamated. Therefore, Glencolton Farms is now owned and operated by the worker owners of ARC.
The Agri-cultural Renewal Concept is an organization of Farmers, Processors, Buyers and Investors building strong links into the New Local Food Chain by expanding the market for local, ecological and wholesome foods while nurturing the arts in rural communities. The farm has been operating for 26 years on two parcels of land, one owned by ARC and one (200 acres) which Glencolton split off back in 1995. (Glencolton, however, has leased this second parcel the entire time, and it forms an integral part of the farming operations. ) This 200 acres parcel of land provides all of the either feed for the cows as well as grazing land for the younger cows. ARC has been offered a special deal to purchase this land for 300,000 dollars; the land value itself has just been appraised by a certified appraiser at 520,000 dollars.
The long term plan to finance this land will be the conversion of the current cow share membership to farm share members. The cow share members pay $300 every six years, depreciating by $50 per year, with a renewal required every six years. The farm shares will have a share value of $2000, which will remain the same until the member leaves the co-op and will receive the full amount back.
The current 150 cow share members converted to farm shares will cover the $300,000 purchase price of the 200 acres. This conversion process will be implemented over a two year period, and should be completed by the fall of 2011.
As a short term measure to help finance the purchase of the land, a group of cow share members have formed a company (informally called “Cow Corp”) to loan the money to ARC. Each investor purchases shares in the company proportionate to their investment. ARC will pay 5% simple interest, calculated annually to the company, which will then distribute this to the shareholders of the company. The company will have a lien on the land as collateral for this loan to provide security to its investors. It is expected this investment will last two year, as it should be completely paid back through the conversion of the cow shares to farm shares.
To-date, this group has raised $138,000. Along with money already raised by the conversion of cow share to farm share, it is expected there will be a short fall of approximately $125,000. We are in the process of seeking a bank mortgage to cover this amount. The cash flow to support this mortgage and the 5% to the investors will be covered by the lease payments no longer required and from rental income from the house located on the parcel of land.
We are looking for investors interested in helping assist this type of community-based agriculture while still offering them a decent return in these very uncertain times.