SOCIALLY BENEFICIAL AGRICULTURE’S (SBA) INVOLVEMENT IN SAMSØKOLOGISK
Jordbrugsfonden SamsØkologisk became a case in Socially Beneficial Agriculture because of its goal. Together with Organic Denmark, a plan was made to acquire capital to purchase the fund's first organic farm.
We established a crowd funding platform where interested citizens can donate funds. This was supported by initiatives on social media. Adequate funds were not obtained this way.
Therefore, we developed a model for how citizens can invest in a limited-liability company that the agricultural fund establishes and manages through the company’s articles of association.
SBA financed a business plan for the model and for a lawyer to prepare an investor prospectus. Investor meetings were held, and after the subscription period, the agricultural fund could found Samsø Økojord A/S, which bought the organic farm. Subsequently, SBA financed the preparation of lease contracts, initiation of the operation of the agricultural fund, marketing of the agricultural fund to new lessees and a business plan for the next acquisition.
The agricultural fund has influence secured by articles to ap-point the majority of the members in the limited-liability com-pany’s board of directors.
The fund’s and limited-liability company’s articles of associ-ation and capital base must be approved by the Danish Busi-ness Authority. A share prospectus has been prepared in order to ensure that the offer of shares is legal and to foster trust with the citizens. This prospectus establishes the legal relationship between the limited-liability company and the shareholder.
Leasing contracts have been entered into between Samsø Økojord A/S and the lessees of land and buildings. Apart from the general terms, they specify how the land and buildings should be run and maintained with good organic crop rotation and the generation of fertile soil, and how the lessees are ex-pected to cooperate together.
Neither the association nor the fund are for-profit organisa-tions. Samsø Økojord A/S, on the other hand, must generate revenue to cover the costs of administration as well as for im-plementing initiatives that contribute towards fulfilling the objective.
The shareholders can receive dividends, but at least 80% of any profit must be used to consolidate Samsø Økojord A/S. Sales of shares are the foundation for the purchasing of land.
Financing of land and building acquisitions can also take place through loans.
Lease agreements and fees must, as a general rule, be fa-vourable to the lessees.
EXPERIENCE AND LEARNING
It is important to use competent sparing partners/advisers to help develop business plans to resolve legal, operational and tax-financial issues.
Thorough work with regard to the articles of association and objects clauses is necessary in the limited-liability company and commercial funds when the articles of association need to be approved by the Danish Business Authority.
For a non-profit commercial fund that must establish a col-laboration between citizens and farmers, it is a good signal to purchase the farms at an impartially-determined price, so that the transaction is satisfactory for both parties. If the sell-ers would like to help Jordbrugsfonden, this can take place through a purchase-money mortgage, so that the seller becomes a co-financer.
Involvement of lessees should take place concurrently with the preparation of the acquisition of farms so that the fund can avoid having periods without income from leasing.
The interest in Jordbrugsfonden depends on the board be-ing able to identify the farming-related ideas of young farmers.
• SamsØkologisk is a commercial fund founded by Økologisk Samsø (Organic Samsø)
• The association Økologisk Samsø works to spread organic agriculture on Samsø on many levels and to strengthen the collaboration between farmers and consumers.
• The purpose of the fund is to acquire farms and lease them out to young farmers who want to establish themselves as organic farmers on Samsø.
• Samsø Økojord A/S is a subsidiary of Jordbrugsfonden SamsØkologisk.
• The fund owns the A-shares of Samsø Økojord A/S
• Citizens and professional investors can invest in Samsø Økojord A/S.
• The fund also acquires additional capital through gifts, donations, sponsorships and loans.
Learn more: http://oekologisksamsoe.dk/jordbrugsfond/