F3Life

Or that red and blue are now soldiers rather than generals.

A lot of these farmers presumably owned their land prior to QE? Maybe it’s the ones who bought land after who are going to the wall.

In the UK, economists say QE has been a success to the point where some say we have learned how to print money without creating Weimar-style inflation. However it looks like the inflation has simply transferred to assets, particularly property including farmland. And we don’t yet know what the impact is. Again in the UK, we might say in the future, increasing property prices resulted in a reduced birth rate, and an increased need for inward migration to plug the gap. Just speculation, but we don’t yet know how this experiment plays out - and with your interesting insight, we might ask whether the end of mid-scale farming was the impact. Given the importance of this group, for many reasons, on American culture and identity, what will be the victim of QE?

Right? It's born a unicorn. But could also be a eunuch.

Lol: you are not Katzenberg. Neither am I.

Good points. Good post.

This was quite frankly astonishing. Given that so much of our pensions and wealth are tied up in the markets, it's astonishing to hear that every Tom, Dick and Pavel is massively invested in destabilising the whole thing. And these are only the guys who got caught! What about the ones who aren't.

And sorry to answer the other question: we work with NGOs, although not necessarily advocacy NGOs.

TBH - climate silos and finance silos are difficult to merge. Different language, KPIs, incentives and concerns. We're trying though to reconcile the two! That said, banks are increasingly paying attention. The two drivers for this are: (1) Ratings agencies including climate factors in their ratings, and (2) G20 Financial Stability Board, Bloomberg Committee calling for voluntary disclosure of climate risk and mitigation steps by company boards.

Re wheat and maize, it's what happens before they're picked that is the concern. Where banks project high rates of loss, they simply withdraw from the sector - understandably.

Re lettuce, I think what we will see is 2 things: firstly highly capitalised vertical farms close to where the lettuce will be consumed. Secondly, smallscale contract farming again close to point of consumption. Imagine a small greenhouse in your back garden. You pay for the infrastructure and have Uber like aggregator linking you directly to buyers. Oh god - I can see the pitch now: it's like Uber for Romain lettuce...

I think you're right, insurance and banks are both looking at a similar problem. In our approach, which is agri-specific, we work with banks to include requirements for climate smart agriculture into loan agreements. Farmers must do x, y and z if they want a loan. From an insurance perspective, this is the equivalent of requiring drivers to wear a seatbelt. We use a remote-sensing system to verify that farmers are in compliance with the system, and if they are we pass a score back to the bank for inclusion in their credit scoring algorithm. Compliant farmers have an improved risk profile and should be able to access credit on improved terms to reflect the improved risk.

By technological fixes in agriculture, I simply mean greenhouses and fertigation systems. Control the environment in which plants grow more closely and thereby mitigate risks associated with weather shock. Works great for things like capsicum, high value lettuce etc. I don't see how this can be replicated for things like wheat and maize, although admittedly GM crops potentially offer some route to solving this problem.

This seems as good a place as any to tell HN about my business:

We provide systems to banks to help them include activities which mitigate climate risk into credit agreements, and evidence of compliance into credit scores. It provides a nudge for bank clients to adopt practices which both mitigate climate change and build resilience to climate-related weather shock.

We're a fintech biz built on the fundamental insight that environmental damage, including climate change, is hardwired into the design of the credit system, because issue of credit is blind to resource overuse/abuse, creating a systemic perverse incentive for environmental degradation.

If you're interested in finance, tech and concerned about climate change, I'd love to hear from you in the comments below.

2 further points:

1. HN was the community that gave me the confidence to launch this business.

2. Through our learning experience, we have discovered that banks are already reducing exposure to agricultural lending due to concerns about weather shock. Where farmers can't get access to credit, their production can drop 75%. Although we are only in the foothills of climate change, our financial system will amplify its impact. There may be technological fixes for high value cash crops grown in controlled environments. Not so sure about staples.