#82: Sail powered supply networks, hydrology & regenerative finance

Alex Geldenhuys from New Dawn Traders

This month, we start by hearing about the possibilities of supply networks fuelled by sailing ships. New Dawn Traders, now in its 10th year, uses sail ships to import produce across the Atlantic Ocean and along European coastlines. We learn from Alex Geldenhuys, director of the organisation, about their Voyage COOP model, and new ways of thinking about international trade.

Next, we are encouraged to think about water cycles in the landscapes we are part of. We chat to Nick Steiner, founder of Permanick, which focuses on design of landscape hydrology and water management. We learn about the importance of considering every drop of rain coming onto a farm, and how to slow it, spread it, and soak it into the land to prevent erosion and leaching, and ensure the water cycle functions regeneratively. 

Finally, we are in Mexico, learning about connecting people to the financial world and those who work with the land. Laura Ortiz shares about re-orienting our econony, so that it serves life. Laura is founder of SVX Mexico, who are uncovering a path in regenerative financial approaches.

We’re very grateful to those of you that support us and allow us to bring you these stories every month. Even the smallest contribution makes a big difference to us. So if you’d like to become a supporter, please visit.

www.patreon.com/farmerama

This episode of Farmerama was made by Jo Barratt, Abby Rose, and Dora Taylor. A big thanks to the rest of the Farmerama team Katie Revell, Olivia Oldham, Fran Bailey, Annie Landless, Eliza Jenkins and Lucy Fisher. Our theme music is by Owen Barratt

Full Episode Transcript:

Abby Rose: Hello, and welcome to Farmerama. 

This month we start by hearing about the possibilities of supply networks fueled by sailing ships. We are encouraged to think again about water in the landscapes we are part of, and we hear how one woman in Mexico is working on connecting people in the financial world and those who work with the land with the aim of re-orienting our economy so it serves life.

Jo: New Dawn Traders, now in it’s 10th year, uses sailing ships to import produce from across the Atlantic Ocean and along European coastlines. Inspired to promote resilience in local food systems, it uses what it calls the Voyage COOP model, to apply this way of thinking to international trade. Alex Geldenhuys  (Gelden-Hise) is the director of the organisation and spoke to us about their work. 

Alex Geldenhuys: New Dawn Traders began out the dream to move cocoa beans from Brazil to England by sail boat. Because I was working there after university and just thought it would be the most simple, straightforward thing to do. Cause it made common sense to use wind power to move products over oceans and yeah, I quickly learned that the global trade is not quite so easy as putting something on a ship and sailing it over an ocean. And I have, over the past 10 years been learning a lot about the ins and outs of the shipping industry, global import export rules and regulations, customs.

New Dawn Traders is a company that brokers cargo that is moved around, on sailing shifts. The idea is to reduce the fossil fuel of long distance ocean transport as close to zero as possible by using the power of the wind and sails, we are sort of reviving a method of transport that’s obviously got a huge legacy of its own and has influenced our culture and economies and the global culture and economies. It’s fascinating as a concept going full circle in a way and using tools of trade with the new purpose. And with new meaning. 

At the moment we’re working with 3D vessels. One vessel will cross the Atlantic Ocean and back bringing, coffee, sugar and cocoa beans. One vessel is traveling to Portugal and back, Southern Europe, bringing up olive oil and wine and salt. And the third vessel will be doing coastal deliveries. So for the first time this year, we’re looking to move amounts of cargo along the UK coast and, very locally, sort of between Penzanze and Plymouth for example, and the Scilly Islands. So we’re starting to get a multi-layered network working.

I’ve always thought that what’s in the ship is as important, if not more important than the ship itself. So we specifically work with small scale producers who wouldn’t normally have the opportunity to export. Often because at their scale they don’t have the economies or scale to meet sort of minimum export volumes. So for example, we work with a network of olive farmers. In Portugal, who through working with us have all got to know each other. And they produce just the most exceptional, incredible olive oil. It’s the type of oil that you might taste at like a really fancy deli, and would be really expensive because to go through the normal channels of trade, they would be putting it into very small bottles, in very small lots, and it would cost a lot through the conventional system to get it to sale. And we work with the producers to repackage it in larger volumes. And to cut down all the costs in the middle of a supply chain in order to bring a really super high quality product to our customers at a competitive price, even with sail shipping in the middle. Yeah, we really try to unpick the whole supply chain and reshape it to make it a win-win situation for everyone involved as much as possible.

So a conventional supply chain would add a lot of little costs in along the way as a product travels from a farm through the conventional transport system, possibly through many ports and distribution hubs, and many middle men, to get to the buyer, because we offer a very short supply chain from farm to the ship to our customer who can come and pick it up from the sailors brought it in.

It helps us reduce some of those costs while still paying the farmer a more than fair price and a very healthy price for their olive oil. And the shipping obviously is more expensive as well. But yeah we work towards a sort of win-win situation where by pre-ordering cargo, we, the buyer helps us reduce our financial risk. They can pick up their olive oil from the ship when it comes in and that way save money in the system. So yes, we wanna pay the farmer properly, the ship properly and offer our customers a product that is really of exceptional quality. Cause it comes from such amazing producers, but at a price that can be competitive with the supermarkets if they are happy to adjust their buying habits.

So the Voyage CO-OP model was really inspired by community supported agriculture models. What’s happening within  the food industry, especially at a grassroots level has always been super inspiring to me. So the voyage co-op model reflects on that a bit where we ask our customers to pre-order products from us in advance of the ship, even sailing, so that when we place the order with the farmers, we can pay the front. We know exactly what we’re shipping, we’re taking very little risks by carrying excess cargo, that we need to then store and redistribute. So yeah, in simple terms, the Voyage co-op means that we bring together the farmers, the port allies, the ships, and work together to offer our customers a product list, which they pre-order and pick up from a ship when it comes into port. 

Jo: Nick Steiner, is founder of Permanick, focused on Landscape Hydrology and Water Management. He spoke to us about the importance of engaging more with water cycles and ensuring we truly value every drop of water in our landscapes.

Nick:  After university in Amsterdam, I moved to Tenerife, and we only get around 280 millimeters of rain every year there. And the first farm I was working in only rained 10 days a year. And there I realized, wow,  rain doesn’t just come from the sky all the time and we really need to be cautious of how we use it, and the rain when it comes we need to make sure that we really use every drop of it. And that’s how that passion started. And yeah, that rabbit hole has been a dig a deep one since then!

I think carbon is kind of handy because we can measure it in the atmosphere and it gives us a clear number that we can work towards or against, so to say. And I believe that hydrology and water dynamics in the atmosphere are much more complex and really difficult to put into anything concrete. And so that’s why I think we focused a lot on carbon, but it would make a lot of sense to focus on water. Because water is the basis of of everything, and we could really see much better results and we could see faster results if we would focus more on water, on water cycle restoration. It also drives a lot of the heat dynamics that we’re seeing globally. And yeah, I think our focus should shift a little bit because even if we solve all the carbon issues in the world, if we don’t solve our water cycle issues, we won’t be able to grow anything and we won’t have anything to drink.

I think in every landscape on every farm, we need to make sure that when it rains, we really use that water well so that every drop that falls, we make sure that it doesn’t erode, it doesn’t leave away with all the nutrition and great top soil that we have. And so we need to slow it, that’s the first thing. We need to spread it across the farm to all the place where we wanted it, and then we need to infiltrate it. So slow it, spread it, soak it. Those are the things we need to do on a farm scale. And for every context, for every landscape, there’s a different approach of doing it, but we need to focus on using water more than once, so we don’t just need to irrigate and then a lot of it flows away. But let’s make sure that when it rains really use every drop. We really get it into the ground and we start refilling our kind of bank account of water that we have in the ground. Our aquifer, let’s refill them instead of emptying them. 

I think I would really love to encourage people to look a bit more into water and water cycle restoration and see what is possible, what works on your landscape. This can start on a tiny balcony in a small garden, but we can also use it on a bigger scale. Let’s build more natural, decentralized waterways. Let’s work with natural materials and direct water throughout farms. Let’s infiltrate it and make sure that no drop leaves the farm unless we’ve used it before. 

I think it’s just observe more. So spend more time outside when it rains and really observe where’s the water flowing, where’s it collecting? That can give you so much information about your farm and what you can do and what would make sense.

Abby Rose: Laura Ortiz started her life in private banking and wealth management but came to understand that true wealth is in life itself. She is the founder of SVX Mexico where they are uncovering a path for what truly regenerative financial approaches might look like. We first heard about Laura on the Investing in Regenerative Agriculture podcast and we wanted to share her work with you because financial systems and the economy can play a big role in a more regenerative approach to the land. I feel very concerned about many of the instruments and approaches that are being offered to bridge finance and the soil but Laura speaks both languages and is building bridges that she believes truly will move us to a more regenerative economy that serves regenerative landscapes.

Laura: So our mission is to ensure that capital serves life instead of governing it. And the reason behind that mission is precisely because when you are in the financial markets, you realize that financial markets are in control of the economy.

And if we go back into what was the ultimate intention of the financial markets at the beginning, was to serve the economy, and the economy was supposed to be serving humanity. But the reality right now is that finance has in been in control of the economy in the past decades, and the economy has been in control of humanity, and humanity has been in control of the biosphere.

So, You know, the servant’s servant is now the master’s master, and I’m really worried about that positioning of finance for control. 

So in financial clauses, in all financial contracts, in all transactions, there’s a dynamic of control. That we need to rearrange a shift massively and systemically and from the financial clauses that start liberating humanity instead of controlling humanity. I think that’s the way to go into thriving life. That’s the start. 

A regenerative economy I would think reconnects us to the ground. So reconnects humans to nature and realizes that we are nature. Second, reconnects the feminine and the masculine as interdependent. Reconnects, you know, indigenous wisdom with current science and heals us. So I would think it’s a dynamic not only of interdependence, but also of much needed reconciliation, intergenerational reconciliation, Global North to Global South reconciliation, indigenous wisdom to science reconciliation. Just reconciliation! So it’s a massive force of love that would let us be self-sufficient individuals based on collective abundance. 

So right now, for example, if we’re still in a transactional world, if we’re still in an economy that that needs money to, you know, get into the dynamic, I think there’s a huge movement and shift of understanding in the financial markets that is happening out there.

And right now, I think it’s the conversation of revaluing nature. Unfortunately, some people are only like wanting to put a price on nature so that they can commercialize it and they can, you know, make it go into like the stock exchange. But then there’s, how can I say? There’s like a legitimate force within that movement that really what what they want is that if you don’t put a value to nature, you just value it at zero and then you just, you know, you just burn it down because it’s, it’s worthless in today’s economy that unfortunately equates value with price.

So I think there’s a huge dilemma there, there’s a deep dilemma, a very important one and fundamental one, but I think it’s part of horizon to valuing natural capital or revaluing natural capital, and not only natural capital, but also the economics of care. So in the care economy, you know the mothering, the taking care of our elders, our loved ones, our youngest, our sick.

You know all of that caring economy that right now is undervalued way massively undervalued and really built on a massively unequal system and an cunderfunded system. So I think the revaluing of the care economy and the revaluing of nature, I think, I believe is part of that bridge of horizon two, and how we’re building that into what we are doing in our day-to-day is basically that.

We put the sexy back on nature and we put the sexy back on the people that take care of nature. So for example, in the capitalistic world that I move in, for example, private capital, in the Mexican financial markets, I try to get more and more investors interested in natural capital. Since right now most of their investment theses are focused and centered on technology.

So they’re like, oh, you know, natural capital, you know those farmer cooperatives that’s very messy and super complex and I don’t wanna get into that, and that’s super. So I go and say, okay, let’s do self-liquidating equity. And it’s basically like this fancy term. To say that it’s a cooperative in reverse, because if I say it’s a cooperative in reverse, they are like, oh, that one’s kind of leftish and eh, I don’t know, you know?

But if you say self-liquidating equity, it has this enticing quality that finance, financial people adore. So basically that’s, that’s how you put sexy back, you know into those kind of things that are. Really our best hope, you know, for a more equitable future. And it’s really like we don’t need to reinvent the wheel. There’s so many things that are already beautiful and well done. We just need to put sexy back in them. So that’s what we’ve been doing and we are literally in our day-to-day, we’re translators of two worlds because the financial world is very disconnected from the soil. And the soil is sometimes disconnected from the financial world.

So we’re basically translators. We try to be in a very serving and conciliatory attitude to make collaboration work. And the way we do that is, for example, right now we have a massive project in Mexico, in rural Mexico with Conservation International, and it’s funded by a 9 million donation from the USAID. So basically what we’re doing there, it’s a five year donation to pay for the technical assistance for us and other companies that are helping us with the technical assistance to build the investability into the biodiversity organizations that we find in these landscapes.

So basically these are beautiful landscapes that are really, that have been stewarded for centuries and millennia to becoming this massive abundance. But right now, you know, since they only sell one commodity, then they are, you know, very poor. But what we’re seeing is that many of the, let’s say, a very rich agri forestry system that right now only sells coffee, and that is very poor, can also be selling, let’s say wild vanilla and cocoa and so many other things that could diversify not only the biodiversity of the landscape, but also the wealth and the cycles of income for the farmers. And then if you build on top of that, the layer of the ecosystem services like carbon, biodiversity and water, then you get a beautiful complimentary income that is not like it’s not gonna take the place of the anchor income, but it’s definitely a very good complimentary income for those farmers and it aligns both the farmers and the watershed around it to be aligned with conservation and biodiversity goals.

So that really helps us ensure at least avoided deforestation for some decades ahead. So that is a way that we align it and we’re building a investor community to reconnect with the landscape, to reconnect with the soil. There’s even investor learning journeys that we’re inviting them into and, and really we, we call them manos a la tierra, precisely because it’s like putting your hands back in the soil, because sometimes when you’rr in a desk most of your time and surrounded by concrete walls, you’re absolutely separated and isolated from nature, which isolates you from, from a lot of the conscience around this, you know, biosphere that is our mother and that gives us life. So when we reconnect that, I think it’s a natural impulse to be a systems change, a game changer in the life of anyone that goes to these landscapes and really not just putting our thoughts back into the, our connection to the biosphere and how eco dependent we are, but also how interdependent we are and how this massive inequality that is putting these farmers in misery is really at the expense of everyone’s future.

You know, so we really need farmers to be wealthy again. And right now, you know, many farmers are the vision of health, but many of them are not. Precisely because they’re on the conventional agriculture path that uses a lot of agrichemicals.  There is no, you know, thriving life for humans, if there’s no thriving ecosystems. We need to remember that our health is a reflection of the ecosystem’s health. And if we have a sick environment, we will by default be sick, A sick population. And there’s not enough amount of money anywhere to be affording medicine for all.

Rather, let’s put the conditions back to thriving life in the ecosystems. So our default is healthy and then we can afford, you know, the medicine for those that really need it. So it’s a huge dynamic shift of right now people are like investing in health and really are investing in medicine and they’re looking at it in a social way. And then there’s environmental people looking at climate change in an environmental sense. But we need to address it together. We need to address it holistically. We need to do this indivisibly. And so that’s basically what we’re doing in the day today. And this consortium is called Sustainable Landscape Ventures.

And within that consortium, we’re building our first ever investment fund that is called Reganera Ventures Fund. And this fund is an opportunity for investors to participate in the whole portfolio of regenerative investments that we’re curating through this technical assistance and through this consortium or partnership.

You know, each farmer is very different and each organization is very different. Some organizations that we find on the ground are like, I am amazed about how much they already know. For example, about the carbon markets.

I was super surprised about some organizations that have been demanded so much about their forest carbon, that they are super knowledgeable now and they are very discerning between one type of certification versus the other. And like they have, they have people knocking down their doors from so many Global North countries asking for their carbon, you know, forestry carbon.

And so many things that are going right now in that dynamic that I think is really changing the way the small holder farmers are perceiving. What they’re doing, you know? So I would say there’s a complex dynamic and, and I would never say that there’s one behavior that we get from farmers, but rather we have a different set of responses from farmers.

But sometimes, many of the resistance to outside financing is coming from, of course, past experience that has been very cruel and very adverse. So there are a lot of the older leaders that have, of course, and very reasonably so adverse to outside financing and very wary of it.

You know, they a ask a lot of questions and if they don’t really, really, really need it, they rather say no.  And I think we need to be very understanding of why they are adverse to financing and, and it’s very reasonable to be so, because in Mexico debt is super expensive.

Like right now, just like the government rate is around 12%, so that’s just like the minimum. You know, day-to-day risk-free government rates. So you can imagine how much you build on top of that for the commercial rates to go into 40 or 70% a year. So imagine like how much of a margin you would need to have.

As profit to be able to repay that and not become indebted. So really debt is, is a huge, you know, it can be both the, the remedy and the poison and that really, really depends on the how you do it. And that’s why. For us in the ventures, that’s why we’re looking to bring equity for a longer term period instead of debt because we understand the adversity towards debt in Mexico and we really see that, you know, it’s super expensive.

So we would rather partner in the long term with farmers that are transitioning to regenerative dynamics, practices and outcomes, in the longer term so that we can really have the skin in the game with them. And the reaction from investors, I would say is also diverse and complex. But what I really like is that some investors really have taken the time to go with us to the landscape, and that is super mind blowing for anyone.

Abby Rose: We recommend listening to Episode 128 of the Investing in Regenerative Agriculture podcast to learn more about Laura’s work at SVX Mexico. Our hope is that some of you listening can echo her work on other lands around the globe, and help uncover an economy that serves the human, and more-than-human worlds.

Jo: We’re very grateful to those of you that support us and allow us to bring you these stories every month. Even the smallest contribution makes a big difference to us. So if you’d like to become a supporter, please visit patreon.com/farmerama.

This episode of Farmerama was made by me, Jo Barratt, Abby Rose, and Dora Taylor. A big thanks to the rest of the farmerama team Katie Revell, Olivia Oldham, Fran Bailey, Annie Landless, Eliza Jenkins and Lucy Fisher. Our theme music is by Owen Barratt