Growing Equity: Philanthropy, Government and Social Enterprise in Minnesota's Sustainable Food System

Senior Fellow Terin Mayer (United States 2009), wrote “Growing Equity: Philanthropy, Government and Social Enterprise in Minnesota’s Sustainable Food System” as part of the 2015 Humanity in Action Philanthropy and Social Enterprise Fellowship.  

How are philanthropists, policy-makers, social entrepreneurs, and farmers collaborating to create broad-based economic prosperity through the development of sustainable food systems? What role have the federal, state and local governments played in those collaborations? And to what extent are these innovations growing wealth and increasing economic resilience in Native, African-American, and New-American communities? These are the motivating questions for the research synthesized in this report. The results of seven months of investigations in 2015, what follows is an initial assessment of efforts to build racial and economic equity in Minnesota’s food economy, considered against a work-in-progress map of financial influence in Minnesota’s food system. In it, I provide a survey of the civil society landscape of Minnesota, as well as an outline of the social problems that intersect in the food system. The results of 15 interviews and an analysis of the financial position of 105 organizations are then presented in two forms: a narrative survey of the field and a data visualization mapping financial influence of organizations involved in the food system. I conclude with a set of preliminary conclusions for different stakeholders on how to create a more just food system.

“North Star State” as “Can Do!” Place

Social entrepreneurs who think of the Midwest as “fly-over” country do so at their own peril. Beyond Chicago and Detroit, it may be Minnesota that they would most regret neglecting. The great “North Star State,” has a robust civil society and significant challenges that speak to deeply American themes. How do we share prosperity in a multicultural democracy? How do we build a just post-industrial economy? How can we do both while averting ecological ruin?

The hopeful fact is that from a philanthropic, nonprofit and entrepreneurial perspective, Minnesota has great problem solving resources. With 60 nonprofits for every 10,000 people (1), and charitable giving consistently over $5B (2), the state is a national leader in the nonprofit world. It was also recently ranked “America’s Top State for Business,” (3) a position it earned (thanks in part to progressive taxes, union support, and a high minimum wage) by topping many quality of life measures. And, as in the model of Detroit, social innovation is blurring the lines between nonprofit, foundation, and business activity, as this report will explore.

While Minnesota’s commercial strength lies in its business diversity (3M, Target, and US Bancorp are all headquartered in the state), there is no doubt that agriculture is a cornerstone of the region’s economic life and self-identity. Food and agricultural production accounts for nearly a fifth of the state’s economic activity (4) and 46% of the state’s acreage is under agricultural operation (5). Minnesota agribusinesses like Hormel and Land O’Lakes are household names. And, interestingly, two of the state’s five largest grant makers (the combined corporate and foundation giving of Cargill and General Mills, respectively) draw their wealth from the food system (6). The business of making food from the land plays an outsized political role, too, since rural legislative districts can swing the balance of power at the state Capitol. (Republicans won control of the House of Representatives in the 2014 midterms almost exclusively by winning Greater Minnesota seats.)

American’s relationship to food is changing as consumers are thinking about where, how and by whom their food is produced. Demand for local organic food has driven an expansion in community-supported agriculture and other direct marketing strategies that have opened up avenues for smaller scale food entrepreneurs into the system. Urban Organics has turned a defunct brewery in Saint Paul into an aquaponics operation. Farmer’s markets are booming, and Hmong farmers, with long organic traditions, are ubiquitous among the vendors. “Minnesota Grown,” a directory of local food producers put out by the state Department of Agriculture now lists 1,027 members, the largest directory in its 25-year history (7). It is a dynamic time, ripe for social innovation, but the challenges are also deep and require a picture of the system as a whole.

Trouble in Paradise

Food is an integral part of human society, but the systems we build to create and distribute it are often framed around too narrow a set of values. If you were to read the priorities behind the dominant food system today, it would seem built for abundance and efficiency. But why stop there? Our country is still wounded by a long legacy of racism. Growing wealth inequality threatens our democracy. We live out of balance with the ecosystems on which we all rely for life. Feeding society without compounding its afflictions is a reasonable aspiration for human progress. With that in mind, this report is framed around an interconnection of social problems, and considers food system building as a core strategy for social change.

We can see the persistent impacts of American racism through a set of social indicators, and Minnesota has the dubious distinction of having some of the worst racial disparities in the country. While people of color make up the fastest growing segment of Minnesota’s population, they are more likely to live in poverty, less likely to graduate from high school, less likely to own their own home, and more likely to suffer from chronic illness (8). Within the food system, people of color face both challenge and opportunity. Agricultural traditions run deep in African, Native, and New American communities and are key enterprises to this day, most notably for Native American wild rice harvesters and Hmong vegetable farmers. Still, a key theme of racial violence in U.S. history has been the severing of ancestral connection with the land. For the tribes, it was forced removal by military. For African Americans, the terrorism of the Jim Crow system built pressure for an exodus. When investors and industrials succeeded in pushing federal farm policy that was meant to remove farmers from the land, they catalyzed the great migration of African Americans into the northern factories (9). Latinos and Latinas have been readily used for farm labor but largely excluded from ownership, mainly by restrictive immigration laws.

Public debate has given new focus to the social problem of extreme wealth inequality, which has connections to the food system. Part of this is a reasonable worry about the health of our democracy: according to Princeton researchers, we may as well call our current political system an oligarchy (10). This clearly impacts the public’s ability to alter policy at all, let alone that which shapes the food system. And this same uneven dominance manifests in the food system itself: 10% of farmers own nearly 50% of America’s farmland (11). In Minnesota, the numbers are slightly more extreme: the top 8% of farmers own 48% of the farmland, with the top 205 farms holding more than the bottom 41% of farms, combined (12).

Massive scale is core to the dominant agro-industrial business model and the political economics of agriculture in Minnesota reflect this dominance. As journalist Hannah Sayle’s documentation illustrates, commodity groups, agribusiness, and corporate-aligned farmers’ organizations have together organized a bloc of legislators to fight state regulation in the interests of water quality, despite crisis-levels of pollution in southern Minnesota lakes. “Big Ag’s greatest victory was the quick and unceremonious execution of the [Minnesota Pollution Control Agency’s] Citizens’ Board. As the last line of defense for Minnesota’s environment, the Citizens’ Board had long been in the crosshairs of the ag industry,” Sayle writes. The Agri-growth Council, “lobbied to cut the board’s power and limit its authority to order environmental reviews. In the end, Republican Rep. Denny McNamara of Hastings and Iron Range DFL Senator David Tomassoni pushed through a bill to abolish the board (13).”

Threatened water quality is but part of a larger social problem at the heart of this report: the urgent need to safeguard our air, water, and soil and to arrest the destructive power of climate change. Restoring humanity’s ecological balance with the rest of the planet will require fundamental shifts in agriculture, as a recent UN report makes clear, since “agriculture, particularly meat and dairy products, accounts for 70% of global freshwater consumption, 38% of the total land use and 19% of the world’s greenhouse gas emissions…” (14) In Minnesota, climate change is already making an impact with warmer temperatures and an increase in big storm rainfall, the kind that can flood towns and rip through roads and bridges (15).

These deep problems – structural racism, dangerous wealth inequality, and environmental destruction – they are connected. And they are connected to us, intimately, through what and how we eat.

Lights in the darkness: a systems view of the sustainable food system in the context of agribusiness dominance

One way of understanding a political economic system is as a set of relationship of agents with relative power, or ability to achieve their purposes. Organizers and social movement strategists have a way of understanding power as manifesting in both organized people and organized money. And it is often helpful to create models, or visualizations, of these systems since maps of the relative power of friends and foe can create clarity about how to change the system as a whole. The following narrative describes social innovation against the backdrop of a system-wide comparison of financial influence and sustainability, which is visualized in the power map that follows.

For the values dimension of our comparison, consider the future of agriculture as spanning a spectrum defined by two major paradigms: industrial and sustainable. In the dominant industrial paradigm, agriculture is controlled by large-scale monoculture operations with significant off-farm chemical and fossil fuel inputs. Sustainable agriculture, by contrast, is typified by small-scale, diversified operations capitalizing on ecological sustainability. For our purposes I have drawn from the analyses of the Fair Food Network (16) and Food Policy Action (17) to differentiate these paradigms on five key value dimensions.

1. Racial Equity. Native Americans, African Americans, and New Americans are building wealth and economic security within Minnesota’s food system.
2. Public Health. The health of the public, especially communities of color, is nourished through access to healthy, fresh and sustainably grown food that is affordable.
3. Agroecological Diversity. Minnesota’s food system is made up of many small-scale enterprises employing a wide range of agricultural techniques that thrive through the diversity of the crops and livestock in their operation.
4. Ecological Wellbeing. Farming, food production and distribution thrives without driving climate change or damaging the quality of the air, soil and water and with few chemical inputs.
5. Local Economic Development. The balance of the wealth generated in food system enterprises enriches the vitality of economic life at the local and regional level.

Racial equity leadership within the sustainable food system is about advancing all of these values simultaneously, both embodying them and shifting others in the field toward the sustainability paradigm. Organizations or entities can be evaluated as either promoting, discouraging, or neutral on each of these fronts and consequently mapped on a 10-point scale, which makes up the vertical axis of the graphic.

Since philanthropists exercise their power primarily through organized money, our comparison focuses on the notion of financial influence into the food system, defined in both short and long terms. Obviously, cash can be used to fund goods and services, as when a foundation provides a grant to a non-profit organization. But certainly a fuller picture of the foundation’s financial influence would include the portfolio of investment on which the foundation earns interest, since that capital supports the vitality of a whole host of corporations and governments (and increasingly non-profit organizations.) Even outside the foundation example, it seems that assets must be part of the picture: a farmer’s huge investment in equipment is part of the inertia of the status quo. Think of short-term financial influence as an entity’s yearly cash-out (expenses or charitable disbursements, for example.) One could consider an organization’s long-term financial influence to be its total assets, which contains the component parts of equity and liability. It’s important to note that the financialization of the economy has significantly impacted food corporations. The largest agribusiness titans are significantly leveraged; their capital structures resemble that of banks or hedge funds. To make a visual comparison possible, our graphic shows only the equity component. Furthermore, the snapshot comes from 2012, to help compare across available datasets.

Click on the image above to enlarge.

In many ways, the government sets the context for the food system, both as an active funder and through the legal structures of incorporation and taxation, but the power of units of government varies widely. The federal government shapes the agricultural system through trade and environmental policies and especially through the farm bill. In 2012 alone, an estimated $2.9B (18) of Farm Bill outlays came to Minnesota, mainly through food assistance and commodity subsidies. While nutrition assistance remains a foundation of social welfare across the country, the National Sustainable Agriculture Coalition reports the farm bill has, “not on the whole or in a major way supported a more sustainable food and farming system.” (19) Corporations and tax-exempt organizations are incorporated at the state level, and state law prohibits corporate ownership of farmland. (This prohibition is intended to protect family farm ownership, but also creates a barrier to the collective land ownership practices of some communities of color.) Still, the State of Minnesota plays a surprisingly small role in agriculture, especially compared to other arenas like workplace policy, healthcare and other human services funding. The budget impact of department of agriculture programs is marginal, and the important lever of tax policy has been largely exhausted through the granting of nearly every tax exemption possible for agriculture (20). The University of Minnesota hosts the majority of the state’s agricultural research, but largely aligns itself with agribusiness (21). Perhaps the biggest role the state plays is as an environmental regulator, but even then, much of the actual power is devolved to county jurisdictions, which are given local control over land use permits. Local government, in fact, is the area of much grassroots activity to shape the food system, but this is through the power of people, not money.

Growing and processing food is perhaps humanity’s oldest social enterprise, so contemporary innovation in the food system is largely about how to meet long-standing challenges outside the industrial paradigm. All food producers need a set of basic resources: land and water, financing, markets, and technical expertise. Farmers hoping to more intensively farm smaller scale, diversified operations in keeping with organic principles are at a number of disadvantages. Land is both expensive and frequently locked up in long-term contracts with agricultural corporations. Financing often depends on the money you already have, or is tied to anticipated federal commodity payments. While farmers’ markets and direct marketing provide some opportunities, processing and distribution networks pale in comparison to the vertical integration of corn, soybeans, or poultry. Adding a racial lens to the picture compounds these challenges as people of color are less likely to come into agriculture with many assets, are often at the margins of social networks through which these resources flow, and still face outright discrimination. Nonetheless, numerous organizations are building the skeleton of a sustainable food system with racial equity at its center.

To begin with, numerous organizations led by people of color are fostering an ethic of reconnection with the land, and building technical expertise. Community development organizations like Hope Community and Project for Pride in Living are making urban gardens a feature of their housing developments and connected programming, providing a venue for African American elders and youth to connect around food. On a reservation in Minnesota’s northeast, the White Earth Land Recovery Project has been active since 1989 in efforts to maintain and develop indigenous food knowledge (as well as the genetic integrity of wild rice). Main Street Project is rigorously perfecting a sustainable, profit-generating poultry-centered agricultural model culturally tailored for latino and latina farmers. Chief Operating Officer Reginaldo Haslett-Marroquin says they saw the vertical integration of industrial poultry as an advantage, “There is no way to reform the existing system. It’s impenetrable. The only way is to build an alternative (22).” The Latino Economic Development Center has provided business skill support to the Agua Gorda cooperative in Long Prairie, which is now a stable Latino-owned agricultural cooperative. And while not targeted to people of color specifically, Land Stewardship Project’s farm beginnings program has been in the trenches training young farmers in their efforts to get more farmers on the land.

Organizing the sustainable food market is an enormous priority for a new food system, and is the site of a variety of enterprising work. The farmer’s market is the iconic piece of system infrastructure, but not the only one. Hmong American Farmer’s Association, for example, runs a program focused on helping Hmong farmers tap into Community Supported Agriculture (CSA) arrangements, land institutional buyers, and get their produce into mainstream distributors and retail stores. The Pohlad Family Foundation has since 2012 built a non-profit food hub, intended to “improve marketpace opportunities for diverse independent farmers…” (23). They include a number of farmers of color among their partners. Significant on this theme is also the body of work around schools and other anchor institutions as new markets for organic and local food. A range of state agencies have partnered with Blue Cross Blue Shield Center for Prevention, Renewing the Countryside, and the Institute for Agriculture and trade policy to help connect local producers to food service providers in the public schools. IATP’s 2011 survey of 67 of these food producers found that only 7.5% had sold to any sort of produce distributor (24), so it seems this strategy provides an alternative market.

Compared to accessing land, accessing appetites looks easy, and strategies for land access are wide-ranging. Land Stewardship Project tries to match buyers and sellers among its community of family farmers to keep the land operating in a sustainable paradigm. The Southwest Initiative Foundation also solicits gifts of land and uses rental income to fund local grants, keeping wealth circulating locally. In the core metro area, the Twin Cities Agricultural Land Trust is working to build permanent access to quality land for urban food producers, and specifically producers of color, though it is unclear whether they actually hold any land. More often, urban gardening space is held by neighborhood organizations. In Saint Paul, for example, vacant land is made available to residents to farm through neighborhood district councils, though the English-only bureaucratic process has blocked out many prospective farmers of color. Mai Chong Xiong, legislative aid to Ward 1’s City Councilor reports that most applicants for garden space are white despite it being one of the most diverse regions in the entire state (25). In some parts of the state, farmers of color confront overt racial discrimination and Farmer’s Legal Action Group is present to help them gain or maintain access to land. HAFA has been successful at bringing the earnings per acre of the Hmong farmers they work with to parity with white farmers in large part because of their ability to secure long-term land security: by securing a large capital investment from an out-of-state “angel-investor” and securing an exemption from the commissioner of agriculture to the state’s prohibition of corporate land-ownership (26).

Access to credit is an arena that demonstrates exciting prospective leadership from the philanthropic sector. The idea is impact investing, the use of part of a foundation’s endowment to further mission-relevant aims. In the lead in Minnesota is the McKnight Foundation, which has seeded community foundations, which are functioning as lenders, and has recently developed a concentrated impact-investing program. One of those McKnight-spawned community foundations, the West Central Initiative, functions as a regional economic planner with a grant from the US Economic Development Administration and is also a “gap-lender,” and while their loan guidelines rule out agricultural production, that leaves an opening for processing, distribution, and value-added food enterprises. In June of 2014, McKnight announced it would dedicate nearly 10% of its $2.2B endowment in “prudent investments that accelerate the growth of a cleaner, low-carbon economy; contribute to a thriving, sustainable metro area; restore water quality and resilience of the Mississippi River (27).” While many food leaders with whom I spoke knew of this trend, none had been able to access this financing.

To be sure, there are good program officers and thoughtful foundation directors supporting the most innovative organizations and the most effective policy advocates and campaigners. That said, on the topic of racial equity in the sustainable food system, Minnesota philanthropists have lots of room for improvement. The set of self-declared food system funders are dominated by corporate foundations whose parent companies benefit from the food system as it is. While funding food shelves is certainly good, such gifts alone do nothing (sometimes intentionally) to address the wealth inequality, structural racism, or ecological damage of the dominant agro-industrial paradigm. Moreover the foundation field is surprisingly uncoordinated, especially considering the scale of investment foundations are already making on food, community development, wealth building and racial equity. According to my analysis of records kept by the Minnesota Council on Foundations, such grants totaled approximately $21 M in 2012 (28), yet a funder collaborative is only now developing on food funding. This is welcome news, since the potential influence of food funders on the food system could be much more pronounced. Even excluding agribusiness-aligned foundations, the 2012 annual giving of funders interested in food and agriculture totaled over half a billion dollars, nearly 20% of Minnesota’s estimated share of the farm bill. Add to that a more robust impact investing program, and some of those same foundation’s $11.5B in total assets could come in to play, breaking down barriers and catalyzing a food system that is truly just.

Growing the Light: Recommendations for Sustainable Agriculture Advocates

Minnesota’s food system is large and complex, so deeper understanding and clear communication across all those who share a common vision of racial, economic, and ecological justice is crucial. While the focus of this research has been more to assess the field than recommend next steps, some areas of action immediately emerge from such a survey. The following are a set of preliminary recommendations about how to strengthen the just food movement.

• Units of government could incorporate food system initiatives within their functions as a regional planner. As the map of financial influence illustrates, the most influential entities tilting the balance of the food system towards the agro industrial paradigm are tax liable. Leaders in the public sector could therefore use tax policy over the long term to shift the balance of financial influence towards a sustainable and racially just food system.

• Food-interested philanthropists and funders, must recognize the important role they can play in systems-wide change. In particular, philanthropic leadership could:

• Share information and grant making to maximize the impact of grant dollars into just food system building.
• Lift up food system as integral to community-building, on par with transit systems and start by funding an impact study on the type of local economic development that could be catalyzed by targeted grant making.
• Deploy social impact investment to build infrastructure for new local markets.

• The philanthropic field broadly must change in order for a new food economy to be developed. The National Committee for Responsive Philanthropy recommendations on achieving racial equity outcomes are particularly apt. NCRP encourages grant makers to target “grant dollars to address the needs of underserved communities, and empowering them by funding advocacy, organizing and civic engagement (29).” Both of these concepts are far from the norm among Minnesota grant makers.

• Lastly, social entrepreneurs themselves must recognize how their comparatively miniscule financial influence translates into extreme political disadvantage. So, while a sustainable farmer or cheese maker or ecologically minded restaurateur may not consider herself ‘interested in politics,’ they must recognize that if they want their food ethic to be taken to scale, that this is an inherently political ambition. In light of this, public policy simply cannot be considered ‘extracurricular’ for anyone who truly wants to be part of changing the economic paradigm on which our food system functions.

•     •     •

Acknowledgements

The following individuals have been invaluable resources in interviews and correspondence: David Bly, Minnesota State Representative, Dylan Bradford Kesti, Community Based Food Systems Urban Ag Organizer, Land Stewardship Project, Megan Buckingham, Policy Program Organizer, Land Stewardship Project, Brian DeVore, Editor and Producer, Land Stewardship Project, Shavaun Evans, Grassroots Advocacy Coordinator, National Sustainable Agriculture Coalition, Rick Hansen, Minnesota State Representative, Reginaldo Haslett-Marroquin, Chief Operating Officer, Main Street Project, Zoe Hollomon, Community Food Listening Project Consultant, Hope Community, Cliff Martin, Farmer and Youth Organizer, Young People’s Action Coalition, David Nicholson, Executive Director, Headwaters Foundation for Justice, Kaitlyn O’Connor, Policy Program Organizer, Land Stewardship Project, Neil Ritchie, Chief Executive Officer, Main Street Project, Sara Rummel, Network Coordinator, Animal Agriculture Reform Collaborative, Rob Scarlett,Trustee, Sundance Family Foundation, Mark Schultz, Associate Director, Land Stewardship Project, Mai Chong Xiong, Legislative Aid to City Councilor Dai Thao, Saint Paul and Pakou Hang, Executive Director, Hmong American Farmers Association.

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