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Investing in farmland is a great way to diversify your assets. One way to get involved in farmland investing is with the Washington Farmland Trust. This trust focuses on helping farmers and preserving farmland in the state of Washington. To date, they have made an impact with over 3,000 acres preserved.
- Deep focus on preserving farmland
- Open to non-accredited investors
- Diversity of farmland – they only work with farmland in Washington
- Only have worked with a small number of farms to date
Investing in farmland has a number of benefits. To name a few, low correlation to the stock market, consistent returns, and growing demand for crops. While it may be a great investment, it can be difficult to invest in farmland without knowledge of how to run a farm.
So, what options exist for those that are interested in investing in farmland? There are actually a number of farmland investing platforms that help investors take advantage of this unique asset class all without ever stepping foot on a farm.
One of those platforms in the Washington Farmland Trust. In this article, we take a deep dive on the company and provide a complete Washington Farmland Trust review.
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|$8,000+||View Investments||Yes||US Farmland, Timberland, Vineyards|
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What Is Washington Farmland Trust?
With a goal of rescuing farmland threatened by challenges such as new development and lack of money to keep producing crops, Washington Farmland Trust provides a valuable safety net.
To date, Washington Farmland Trust has conserved 30 farm properties, totaling 3,163 acres. Their mission has 4 key pillars:
- Protect the environment
- Provide a livelihood for farmers
- Ensure access to local food
- Support rural economies
The trust has stepped in and made opportunities for investors after realizing the future of farming is threatened. Over the last four decades, some of Washington State's best farms have been irreversibly lost to development. In the next ten years, 70% of the state’s local growers will retire without a successor in place.
New farmers face countless barriers to accessing land, the most alarming of which is the ability to afford necessary equipment and buy more land nearby.
As land prices skyrocket and climate changes the state’s landscape, the trust is working to protect farmland, support farmers, and chart a new path for the future of farming in Washington.
Investing In The Trust
The trust has a few options for those that want to be involved: investments and donations.
At its core, Washington Farmland Trust is a nonprofit 501(c)(3). The company is able to do what it does because of donations from individuals and companies.
With a number of corporate sponsors such as Boeing and Tony's Coffee, the Trust is able to focus its efforts on land conservation.
They also receive donations from individuals looking to preserve farmland in Washington state.
In addition to donations, the Trust also invites investors to get involved. Built on its unique financing model, investors receive annual interest payments over a specific time period and allow more local farmers to access affordable farmland in the state of Washington.
A total of 16 investors and 1 institution eagerly signed up for the trust’s first offering, the Farmland Impact Note. A whopping $2.7 million was raised to enable the purchase and protection of 260 acres of high-quality agricultural land, salmon habitat, forestland, and wetlands near Monroe, Washington.
Currently, the trust does not have an additional investing opportunity, though they are working to find more deals to bring investors.
How The Trust Fund Works
- Impact Investing – This provides flexible capital that can be deployed quickly to protect threatened farmland across the state. Investments are directed right to Washington Farmland Trust to protect local, working farms forever.
- Stewardship – The trust goes to work to remove a farm’s potential for development, and also to buy at-risk farmland with the goal of leasing it or selling it to a local farmer.
How Does The Trust Help Preserve Farmland?
One option is the Buy-Protect-Sell plan.
For certain high-priority, highly threatened farmland properties, the trust may use a Buy-Sell-Protect transaction. They will raise the capital from investors to buy the land and get it off the market quickly. This removes the potential for development.
Then, the trust will lease or sell back the land to a farmer. This funnels money to investors through rental payments or a percentage of the sale price.
Another option is a simultaneous sale. When a farmer plans to sell their land at a cost that is too high for farm buyers, the trust steps in and sets up a conservation easement. This protects the land by permanently removing the rights to use it for development, such as neighborhoods or business use.
A conservation easement ensures the soil, water, and open space on the property is protected permanently.
How The Trust Selects Farms To Work With
In order to protect farmland that has the most potential to benefit the environment, the community, and the local economy, the trust’s team evaluates each property against three core criteria.
1. Physical Characteristics
For a parcel of land to stay in farming forever, they first assess the quality of its natural resources, from soil and water to the land’s history of production or contamination.
The experts comb through public data to consider soil quality, water availability, historical use, and future potential for growth. Farms that are larger than 20 acres, larger than the average farm in their county, zoned for agriculture, or that have existing water rights are typically more eligible for conservation.
2. Location And Threat
Farm businesses are more successful when they are near markets and in close proximity to other farms.
But the location of a property can also be key to potential collaboration and funding opportunities or help determine what outside pressures (such as development, affordability, or climate change) put them at risk. They use sophisticated mapping and outreach processes to identify priority farmland for protection and are aiming to expand their footprint across Washington State in the coming years.
3. Community And Ecological Benefits
Healthy farms benefit everyone. Sustainably managed farms have the potential to promote healthy habitats, restore waterways, mitigate floods, sustain rural economies, and connect us to the natural world.
Successful Farm Projects
Here is a sample of the 30 farms that have been protected by the trust:
- Growing Things Farm – 31 acres in Carnation, WA
- Four Elements Farms – 120 acres in Orting, WA
- Delta Farm- 97 acres in Dungeness, WA
Washington Farmland Trust Review: Final Thoughts
The Washington Farmland Trust is a nonprofit organization dedicated to preserving farmland.
Their mission is specifically focused on protecting the environment in Washington state.
The organization offers individuals a few ways to get involved either through donations or investments.
If you are interested in investing in or conserving farmland, then the Washington Farmland Trust is certainly worth a look.