Fondo Solidario: Supporting Access to Capital for Latina Farmers

What do power, ownership, and choice over the economy look like in practice? To us, it looks like democratized power through transformative long-term solutions led by those most directly impacted by injustice. It means putting capital in the hands of BIPOC-led organizations and communities who need access to flexible, non-extractive capital on their terms. 

Building on our past successful partnerships with Native Women Lead, Mortar, and Connect Up!, we've recognized a pressing demand for lending support to effectively utilize funds and empower communities —Kitchen Table Advisors (KTA) shares this vision, particularly in assisting BIPOC farm owners.

KTA supports small-scale farm and ranch owners who use regenerative agricultural practices, and are leaders for social and environmental change within the food system. In partnership with KTA, Common Future is excited to announce our joint Community Credit Lab (CCL) partnership: Fondo Solidario. 

Kitchen Table Advisors and Common Future’s Partnership: Fondo Solidario 

Fondo Solidario, which initiated its development in December 2021 and disbursed its first loans six months ago, is an innovative three-year revolving character-based lending fund pilot. It aims to advance the economic resilience of Latin female farmers, self-identifying as Latina, with intersecting identities including immigration and documentation status, their role as heads of households and single parents, low-to-moderate wealth, and limited access to capital resources. This fund is reparative at its core and offers a model for future capital projects. For Latina farmers in California, this fund allows us to bypass extractive and historically racist models and instead focus on democratic governance, character-based lending, and capital tailored to the borrower's needs, rather than the lending institution. 

Fondo Solidario launched with a governing body consisting of 14 Latina farmers from the California Central Coast region, where the funds will be distributed, and an advisory board composed of 4 farmers—active governing council members—two KTA staff, Manzanita Capital Collective as the community-based lending advisor, and one community member. Together, they meet regularly to review and bring loan recommendations to the Governance Council for approval, follow up with borrowers regarding their loans, and report financial and pilot updates.

Led by Latina farmers from whom the idea originated, the Fondo Solidario provides quick-turn, zero-interest, character-based loans, designed with the flexibility applicants need. These loans are designed to support applicants as they respond to emergent needs and as they invest in their businesses to prevent future issues, such as cash flow shortages. This allows the capital to be democratically governed with participation from community members with lived experience.

All of this is possible with the back-office services Community Credit Lab will be providing. Traditionally, lending entities would require credit checks, collateral to secure the loan, and considerable time spent on filing paperwork to take out a loan. Even if the loan is granted, it's unlikely to be suitable for relief purposes due to the lag time in being approved for a business loan. With Fondo Solidario, CCL can provide these crucial back-office services—quickly—allowing KTA to distribute their funds to loan recipients without additional costs. What’s more, the pilot offers an opportunity to expand and/or replicate the model's learnings for other similar community-based projects.

Why Food and Farm? Why Now?

As we wrote in 2021, “Since the first slave ships from Africa arrived at U.S. ports, carrying stolen people to work stolen Indigenous land”, food, farming, and the need for racial justice have been intertwined. After all, the expansion of plantation agriculture before the 1860s was fueled by slavery—through agricultural knowledge and manpower. After centuries of relying on human chattel, farming post-1860s relied on sharecropping, further dispossessing Black farmers and Indigenous communities of their land and, eventually, leading to immigrant workers making up the bulk of farmworkers. These days, as much as 70% of farmworkers are foreign-born, and include those from Indigenous communities. In California, for example, 96% of all farmworkers identified as Hispanic (the term used in the U.S. census), 84% were born in Mexico, and about 9% of California farmworkers identified as Indigenous.

And while over 20 million workers—about one-eighth of the US labor force—support the $1.264 trillion U.S. agricultural industry, workers across the food system are more likely to be underpaid, to lack health insurance and other benefits, and to face unsafe, unhealthy, or exploitative working conditions when compared to other industries. According to the 2019-2020 NAWS survey results, 20% of agricultural worker families made income levels below the national poverty guidelines. What’s more, we see not only the laborers being underpaid, but sometimes even experiencing the very conditions that built the system. 

Despite representing the majority of farmworkers, only 5% of all farms in the United States are owned by at least one Latin producer, 1.7% by Indigenous producers, and 1.3% by Black farmers—predominantly as small-scale farms. According to the USDA, 50% of small farms don’t survive their first five years.

To quote my colleague, “beginning with the New Deal, during which the USDA denied loans to Black farmers, the U.S. government began systematically stripping these farmers of their property — not by seizing it, but by making it financially impossible for Black people to hold onto their assets. Racist voting practices allowed for the easy passage of laws that weakened or eliminated Black asset-holding.” This was echoed in similar struggles to access capital for Latin and Indigenous producers.

For years, Common Future has been saying that the people closest to the problems are already leading models to restore community wealth, but that these solutions require additional attention, support, and financial investment. We look forward to reporting on the impact of this fund in the years to come.

For more, visit Kitchen Table Advisors to learn about the history of their organization and their support of small-scale farm and ranch owners across the country, using regenerative agricultural practices, and leading social and environmental change from within the food system, or visit our character-based lending page. Stay tuned for more as we expand on our work in these sectors.

Photo Credit: Inspira Studios.