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A New Model

A New Model

The New Model

“Tree Bonds” is an innovative financing product designed to address the worldwide demand for the long-term financing of perennial tree crops.  The focus to start this financing product is the Caucasus, where for millenia, farmers and orchardists have been raising apples, peaches, apricots and other stone fruits for tables around the globe.

The idea is to raise capital from local countrymen, diaspora, community groups, pension funds, and others who believe that long-term solutions are needed to increase the capacity of the agricultural sector and the livelihood of dedicated rural farm families. These investors will become bondholders in an orchard crop such as apples, grapes, peaches, or other stone fruits; even nut, or poplar for plywood, will work as well.

How it Works:

We start by selecting dedicated smallholder families who have fallow land and are willing to join forces with investors in a long-term commitment.

  • Smallholders are paid a modest amount and will assign the farming rights of their land to the investors during the orchard development period.
  • An orchard management firm will train farmers on the agronomic and managerial skills needed to run a successful orchard.
  • During development, the trees, fruit, and money collected from the sale of the harvest are the property of the bondholders, until the bondholders are repaid.
  • Bondholders begin to recoup their investment (plus a reasonable rate of return)  between five and seven years, depending on the crop.
  • Once the bondholders are repaid, the land and farming rights are returned to the farmer without cost, and the farm family now has an income-generating orchard for the next 15-20 years.

Orchard Management – Extension Service

A local agricultural management and farm extension service will:

  • Interview, select, and train farmers.
  • Implement an approved work plan for each orchard, including site selection, orchard management, harvesting, and crop sales over the life of the bonds.
  • Oversee, manage, and protect the financial interest of the bondholders.

The Results

In five to seven years, orchardists and farmers in Georgia and Armenia have hands on practical experience with best practices for their crops; bondholders will have recovered a healthy return on their investment; the community and neighbors will have successfully invested in their own country, creating job and economic growth; and, the farm family will own a productive orchard with a useful life of fifteen plus years.