The initiative, backed by the Walton and Rockefeller foundations, aims to deploy multiple capital types to scale up support for regenerative practices in the US agricultural heartland.
The TransCap Initiative, with financial support from the Walton Family Foundation and The Rockefeller Foundation, is developing a new way to finance regenerative agriculture in the US Midwest, which it hopes could also provide a blueprint for similar initiatives elsewhere.
The non-profit is planning a new “capital orchestrator” – a financial platform to align and deploy multiple capital types, such as grants, debt, equity and guarantees, to allow support to be better targeted and scaled up for regenerative agriculture in the Midwest, which is home to the world’s largest soy and corn belt.
TransCap said a capital orchestrator differed from other types of impact-related investing platforms, in that it was centred around a transformational mission, rather than a target return or narrow thematic investing.
“I would argue that most impact funds still work in a very transactional way. This is much more about being a system intelligence engine and a kind of matchmaker for the ecosystem at large,” Ivana Gazibara, director of prototyping at TransCap, told Impact Investor.
The aim would be to build coordinated portfolios of investments that can shift systems – rather than just fund isolated projects – with a focus on overcoming challenges such as dispersed funding, siloed investment decisions, and a lack of coordination between actors with shared goals.
Capital orchestrators have been developed in other sectors in the US – TransCap points to ReFED in food waste and the Groundbreak Coalition on racial justice. But it said its platform was the first to focus on Midwestern regenerative agriculture.
Gazibara said the Midwest is a good location for implement the orchestrator because it is one of the world’s largest and most important agricultural regions. The Midwest contributes more than $152bn (€133m) to the agricultural economy of the US and accounts for 10% of total US agricultural emissions, according to the NGO.
Although the Midwest’s business model have worked very well for a small number of powerful agribusinesses and delivered cheap food to consumers, it has also produced negative impacts that could be addressed by regenerative techniques, according to TransCap. These include increased emissions, depleted soil, polluted waterways with agrochemical runoffs, decimated biodiversity and degraded crop nutrient density.
“If you transition a system like that, then, potentially, it’s also a blueprint for other agricultural transitions and maybe even for other contexts as well,” Gazibara said.
Broad-based consultation
The second stage of a six-month planning phase for the Midwest capital orchestrator has just been launched, bringing in a newly formed “design council” to help develop the platform. The design council comprises 20 organisations with expertise in Midwest agriculture and finance, including asset managers, investors, philanthropists, grassroots farming networks, technical assistance providers and NGOs.
Among them are the Walton Family Foundation, The Rockefeller Foundation, PepsiCo, Potlikker Capital, Zell Family Office, McKnight Foundation, the Environmental Defense Fund, Platform for Agriculture and Climate Transformation, Transformational Investing in Food Systems (TIFS), Practical Farmers of Iowa, and the Minnesota Farmers Union.
The council is tasked with identifying what types of capital should flow through the orchestrator, how it should be structured and governed, and how it could reflect the needs of farmers and frontline actors, while attracting suitable investors.
TransCap said success will be measured by indicators of overall system health and transformation rather than isolated outcomes, with signals including stronger regional coordination, increased capital flow into regenerative agriculture and improved equity in resource access.
Core metrics, intended to guide progress toward a more resilient, connected and just system, will include acres transitioned, increased farmer income, and land access for farmers from BIPOC – Black, Indigenous and People of Colour – backgrounds.
The Walton and Rockefeller foundations are funding the development phase of the project. TransCap said it was in talks with further philanthropic, public, and private investors over support for the implementation of the orchestrator, with a soft launch scheduled for late 2025, if funding is forthcoming.
“Agriculture is not universally a massive moneymaker. There are higher returning spaces, but also some concessionary spaces. Part of the challenge is in matching the right type of capital to the right type of solution. That’s why we think orchestration in the middle is really important,” Gazibara said.
She said that catalytic capital and blended finance are part of the solution, but making the sector more attractive to larger-scale investors is also important.
“For example, there’s a real need for building out supply chain infrastructure. Someone could be seeking, say, $50m to build a new mill, and this could be challenging to find, because infrastructure funds historically operate on a much bigger scale. But if we had 10 deals that we could package into a pooled fund, then you could knock on some doors that you otherwise might not,” she said.
Improving resilience
TransCap said it wants to see thriving, resilient farming communities where more people are inspired to farm and steward the land in line with regenerative agricultural practices. It said this can be achieved by providing easier access to land through financial literacy and patient capital, tailored technical assistance for farmers transitioning from conventional practices, and flexible financing for soil health and crop diversification.
Central to the initiative is the inclusion of a wide range of stakeholders, from investors to farmers themselves in its formulation and execution. Environmental groups have sometimes criticised farmers as being resistant to the introduction of regenerative techniques, but Gazibara said a more positive approach will be more beneficial.
“It does not help to frame farming communities as part of the problem. We need to do a lot more to lift them up as champions of this kind of work and we need to be much more in touch with the realities facing them as well,” she said.
The TransCap Initiative has its origins in 2019, when it was incubated at EIT Climate-KIC, a leading European climate innovation agency, before being spun out as a non-profit in June 2021.
“We got started because of the idea that we use money backwards. Instead of starting with a problem and saying, ‘how do we solve this problem using money’, we often tend to start with capital pools and then say, ‘what can we do with this money?’ So, we’re trying to flip that equation on its head,” Gazibara said.
