Wary Of Wall Street? Invest In A Dairy Farm Organic farmer Dante Hesse needs to raise about $700,000 to upgrade his dairy. When Hesse couldn't get a loan through usual channels, he turned to his customers for help. Though he's got no collateral or co-signers, some say they're ready to invest.
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Wary Of Wall Street? Invest In A Dairy Farm

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Wary Of Wall Street? Invest In A Dairy Farm

Wary Of Wall Street? Invest In A Dairy Farm

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From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.

Michele Norris, Host:

And I'm Michele Norris.

As America's economic crisis grinds on, one of the biggest problems has been getting credit flowing again, especially to small businesses. One dairy farmer in New York has come up with a novel approach. He's asking for a loan from his customers.

NPR's Laura Conaway reports from Brooklyn.

LAURA CONAWAY: Dante Hesse has been up since 2:45 a.m., but he's used to that kind of thing. Hesse is a young dairy farmer. He's wiry and small, and he moves fast in the morning chill. A couple of days each week, he makes the three-hour drive from his Milk Thistle Farm in the Hudson River Valley to the farmers' markets of New York City.

Mr. DANTE HESSE (Milk Thistle Farm): Good morning.

CONAWAY: He's not yet done setting up his stand when the first customers come for his organic milk, at $5 a quart.

Mr. HESSE: Anything else?

CONAWAY: Hesse says he could sell even more milk — plus butter and cheese — if he could just build a processing plant right in his barn. For that, he needs about $700,000. Last fall, a farmer's credit union turned him down for a loan because he didn't have any collateral. But Hesse was determined to grow, so he wrote to his customers and asked them for help.

Mr. HESSE: We feel pretty strongly, at this point, that there's a lot of people out there who are interested in helping. And the way the economy is now, one argument might be it's a bad time to be trying to do something like this, but I think the reverse is true, that it's actually a good time because people are scared of the stock market. And they know that food is a vital part of survival, and local food is going to become very important in the very near future.

CONAWAY: Hesse began his appeal in the depths of the economic crisis. He's offering 6 percent interest for an investment of $1,000. Now, there's not much to back up that investment. He's still got no collateral. He's got no co-signers. The only thing he owns is a herd of cows. Anyone who invests in his farm has to take it on faith.

But one customer at the market seems ready to jump in anyway. Josh Goldstein says he has lost some of his faith in the stock market, but with Hesse, he can put his money literally where his mouth is.

Mr. JOSH GOLDSTEIN: The milk, first of all, it's like no milk you ever had, you know. I mean, it's really - this milk is just - tastes like, it's like incredible. It's really, really flavorful. And, you know, we've been looking to, you know, invest some money, possibly in renewable green companies just out there - you know. It'd be a good opportunity, somebody local, somebody we know, somebody we can trust who we see every week, that sort of thing.

CONAWAY: In their small way, Hesse and Goldstein are part of a new movement in economics. It's called slow money. And it's championed by a guy named Woody Tasch. The idea is to get investment capital to local businesses that are friendly to the environment. Woody Tasch is a venture capitalist with a long list of what's wrong in the world.

For starters, he thinks money is flying around the globe too fast. Tasch says he's tired of traditional economics, which assumes growth is good and the marketplace knows best.

Mr. WOODY TASCH (Venture Capitalist): I've just had it with all of this so-called making-a-killing expertise, which is actually killing the planet. And I think one of the antidotes is daring to move to the other side of our brain and kind of put down all that economic and fiduciary nonsense, and just be willing to act like regular people.

CONAWAY: Tasch is really rolling against the mainstream. When most economists talk about money changing hands and making people better off, they call it velocity. For them, velocity equals growth, and growth is good. Tasch dreams of a world where money still changes hands, but locally and slowly. He's even written a book about it, "Inquiries Into the Nature of Slow Money." His book is part prophecy, part prospectus.

Mr. TASCH: This idea that individual enterprises can just keep growing, and that there's no such thing as company that is too big, seems, on the face of it, rather preposterous to me.

CONAWAY: Which is not to say Tasch is against all growth. He's run a socially responsible investment firm for years. One of his favorite success stories is a yogurt farm with annual sales of a million dollars. His new Slow Money Alliance aims to raise $100 million this year. Modern farming is a business, and you can hear it back at the farmers' market in the way Dante Hesse answers questions from Josh Goldstein.

Mr. GOLDSTEIN: We've been debating whether we wanted to offer stock or offer bonds or, you know, loans. And there are pros and cons to both.

CONAWAY: These days, Hesse is putting the last touches on his plan to borrow money from his customers. He's going with an old-fashioned loan. It's easier than stock and lets him keep control of his farm. He's also hoping he might get funding from someone like Woody Tasch. Hesse describes his five-year plan is simple. Bottle his own milk, reach more customers, find more solid financial footing.

Mr. HESSE: And I think that that's an attainable goal. At least, I hope to believe that it is. And we're just going to keep trying.

CONAWAY: Hesse knows it might take a while to get where he's going. In this economy, he's almost got no choice but the slow road.

Laura Conaway, NPR News, New York.

NORRIS: You can read a chapter from Woody Tasch's book about slow money on our Planet Money blog. That's at npr.org/money.

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