Dirt Capital is not a cure-all solution to regenerative agriculture scaling or the financing gap in regenerative agriculture, and it is not a fix for the land access problem. Our funds are working models with a track record of backing farmers and ranchers who never needed much incentive to look after the land and their neighbors. That record runs to more than fifty farm projects on over 20,000 acres in sixteen states, with a fifth fund in the works.
The Dirt Capital model rests on two ideas. The first is that regenerative farming can succeed one farm at a time, and that the job of finance is not to create that success but to back it. The second is that treating regenerative agriculture as a vast and nearly intractable system hides the fixes that are actually easy. Here is what the work has shown:
The financial tools already exist. The instruments would not surprise anyone who has closed a real estate deal. Dirt Capital buys land and leases it to a farmer with an option to purchase at a price set on the day the lease is signed. It writes mortgages where a bank will not, or will not on terms that fit a diversified farm. It co-lends with banks, CDFIs and mission lenders when a gap needs closing. The fund that holds all of this is an ordinary private equity structure with typical terms. None of it is a new equity model or a new financing mechanism or radical reinvention of the machinery of capitalism. Dirt Capital simply put impact at the center of the process rather than screen for it at the end: every deal is underwritten towards the goal of farmers and ranchers owning the land, and the work of impact is a question of cataloging rather than invention. Every farmer in the portfolio was generating impact long before Dirt Capital showed up. What secure land does is multiply what they can already do, by giving them more ground to do it on.
Conservation finance also already exists. Conservation easements, purchase options and blended structures have matured over the past few decades into a dependable set of tools for holding land to a purpose while returning capital to the people who put it up. They were built mostly for land trusts and timber, and they work at least as well for farms. Paired with competent farmland real estate management, they can make land affordable and hold to the purpose of an agricultural easement: to keep working lands under management, not as a pastoral scene to view from a distance. A farmer who could never reach the appraised price of unrestricted ground can often reach the price of ground with an easement recorded on it, and the easement is itself an outcome the fund reports.
The risk is operator risk, and it’s mitigated by diligence. Financing regenerative farms looks risky, and in a sense it is, but the risk is not where people tend to look for it. Farmland is one of the safer assets a fund can hold. The NCREIF Farmland Index, which goes back to 1991, has returned about ten percent a year with annualized volatility under seven percent, and it posted its first negative calendar year in 2024, dragged down by permanent crops in California rather than by cropland or pasture. Land holds value. Underwriting farmland is mostly underwriting the operator, and that is the work people mean when they say the financing is hard. It is not intractable, it is just work.
Much of the risk people associate with regenerative agricultural finance comes from framing the work mainly as financing the transition of conventional farms. There’s an important role for that financing and it can be risky. But investing in farmland has always been risky when management isn’t part of the diligence, and assessing regenerative management well requires a clear sense of what regenerative agricultural management looks like.
In most sectors, we’d be cautious about funding a team to do something it hasn’t done before simply because its current work looks similar from the outside. No investor would back a fast-food franchisee to open a farm-to-table restaurant on the theory that both serve food. In the same way, a conventional farmer and a regenerative farmer both work land and run equipment, yet the businesses they run are quite different. A farm is not a farm is not a farm.
Regenerative farms are distinct businesses. Rotations are planned years out, soil biology is managed as an asset with the hard decisions that entails, sales are often built one wholesale account or CSA member at a time. Regenerative farms depend on an appreciation of place and a tolerance for complexity that commodity agriculture spent a century engineering away.
Dirt Capital works with proven regenerative farmers and ranchers: farms that are already regenerative, already selling, and already able to take on more land without compromising the practices that got them there. Very often what these farmers lack is land and the inherited wealth that typically buys it or bestows it. That gap is the long consequence of who has been able to own land and build wealth in this country, and addressing it is at least as urgent as persuading established farm businesses to farm differently.
Economic Architecture podcast episode with Dominick Grant, managing director at Dirt Capital Partners.
Regenerative finance does not always need to be different from conventional finance. It does need to be more flexible. Three farmers exited the Dirt Capital portfolio this year by completing their purchases. In an ordinary banking relationship each of them would have been in default and, in all likelihood, off the land. One deferred payments for two years after COVID took out the restaurant and institutional accounts the business had spent years building; the fund kept the purchase option open and waited. Another expanded faster than cash flow could support, fell behind, and closed with arrears near twenty percent of the purchase price, which were folded into the purchase rather than cleared as a condition of it. In each case the business needed to invest in itself, in a rebuilt customer base or new infrastructure or a labor plan, more than the fund needed a lease payment on schedule, and that is how it was treated.
Pandemics can happen and business plans change, and a partner can absorb that in a way a loan covenant cannot. Dirt Capital’s investors accept a return that reflects that flexibility, because the flexibility is what makes impact possible. Land at a fixed price is still land, so most of the downside sits on the asset while the upside comes from the business. Patience pays off in the plainest way possible as the farmer is able to buy the farm.
The impact belongs to the farmers. Dirt Capital tracks a good deal of what is possible after regenerative farmers get on new land. Improvements in soil health and water retention, increased biodiversity, farmer wealth-building, local jobs, more food moving through regional and local supply chains, and more food reaching institutional buyers and foodbanks. All of it grows out of one intervention, which is long-term, affordable access to land. Soil improves because a farmer put money and years into the soil, not because the land is now financed through a lease-to-purchase. Regenerative farmers don’t need much intervention.
The regenerative field has spent a decade proving the agronomy, modeling the benefits and cataloguing the barriers. That work should be considered done enough. What has not been done enough is acknowledging regenerative farmers already exist and moving proven capital to them fast enough for them to compete for land. When the field talks about its problems, it is nearly always talking about how to get resources to farmers who are not regenerative yet, which by every measure an investor would use is the weaker bet. Regenerative agriculture does not need more scaffolding, more diagnosis or another new idea. It needs the tools that already work, pointed at the farmers who are already making it work, one farm at a time, until the force of that groundswell is unmistakable to the wider financing system. Regenerative agriculture is already here, waiting only for private markets and public policy to catch up.
Article by MartÃn Lemos, Director of Impact and Agriculture at Dirt Capital Partners. MartÃn joined Dirt Capital Partners in 2023 and leads the firm’s impact strategy and farm advisory services.
His deep background in agriculture stems from a decade farming across the U.S., including managing a 50-acre organic farm outside of Chicago. He also coordinated field research programs in support of SME investment in Ghana as senior agronomist at AgDevCo. He later joined BSR where he advised major food and agriculture companies on sustainability strategy, ESG integration, and responsible sourcing.
Prior to joining Dirt Capital, MartÃn served as Co-Executive Director of the National Young Farmers Coalition. During his tenure, the coalition grew significantly and delivered on historic funding for equitable land access, COVID relief benefiting community-scale farmers, and expanded resources for young and BIPOC producers.