Farmland LP's investment model depends on crops that can earn what Wichner estimates to be 50% to 200% premiums above conventional crops due to their status as organic, local and sustainable. It also consists of cost savings derived from circumventing processors, wholesalers and retailers--and instead selling directly.
Wichner's model is intriguing because it attempts to solve a host of problems at once-rising oil prices, people's health, soil restoration and the lack of affordable land for many farmers. At the same time, he's found a way to scale what had traditionally been a small-scale, diversified farm model into something that's potentially attractive to investors. Time will tell if his numbers pan out.
A former investment banker, Ellie Winninghoff is a writer and consultant specializing in impact investment. Her writing about impact investing is linked at DoGoodCapitalist.com, and she can be reached at ellie.winninghoff (at) gmail (dot) com.