One of these activists was Robert Swann, co-author of The Community Land Trust: A Guide to a New Model for Land Tenure in America. In the book he explained that, “Israel has been one of the few countries in the world to be successful in preventing the process of uprooting the poor tenant farmer from taking place. The leasehold system has brought security of land tenure to the small farmer and his family and has prevented the control of land by absentee landlords, speculation in land, and the exploitation of farmworkers by a landowning class.”

After learning about the mechanics of a system that had demonstrably protected communities against these unwanted outcomes, Swann and other members of this group, such as the Albany Movement and Student Nonviolent Coordinating Committee’s Slater King and Charles Sherrod, put their knowledge into practice. They would go on to form the first Community Land Trust (CLT) in the Southern US state of Georgia.

ABOVE: Robert Swann and Charles Sherrod with members of New Communities, Inc. at planning meeting circa 1970

Less than one year after the trip to Israel, New Communities Inc. was registered as a farming co-operative and CLT. It was created as a direct response to the political disenfranchisement and vicious economic retaliation faced by Black communities, with the understanding that banding together and sharing ownership of the land would enable these communities to be more resilient and secure their land more effectively. In the following years, New Communities acquired 5,735 acres of land – 3,000 of which was cultivated farmland. At the time in the late 1960s this was the largest tract of land held by African Americans.

CLTs are legal models that separate the ownership of the land itself from the ownership of anything built (or growing) on the land. Importantly, CLTs effectively remove land from the market and, by democratising decision making and offering leases, ensure that the land is used for purposes that serve the surrounding community. New Communities did exactly this by offering leases that allowed farmers and homesteaders to use and manage the land communally.

New Communities operated for a decade and a half, but by the 1980s they were facing the impacts of drought, mounting debt, and racial discrimination. This prevented the acquisition of emergency loans from the United States Department of Agriculture (USDA), and New Communities had to reluctantly sell its land and farms.

Although slavery officially ended in the US in the mid-1860s, it persisted for well over a century after. Once sharecropping was phased out, many white landowners often retaliated and did everything in their power to prevent African Americans from acquiring and retaining land, even pressuring federal agencies like the USDA to deny resources to Black farmers. In fact, the USDA had to pay $13M in 2010 to members of New Communities after losing a class action lawsuit, in which is was ascertained that there had been widespread racial discrimination with regard to loans for African American farmers.

Yet New Communities was not a failure, but rather a seminal experiment in community economics – one which has been learned from and replicated in various ways by hundreds of CLTs across the US and around the world. Mtamanika Youngblood, an early member of this movement, explained that New Communities took “civil rights one step further into economic independence and economic rights, using agriculture as an economic base.” What was significant was their understanding of the interplay between land, finance, and agriculture.

For a community to be resilient against external shocks and capable of directing its own development, it must be able to allocate sufficient resources to the efforts it sees as critical. This not only necessitates a stable system of land ownership and egalitarian land usage – such as the CLT model – but it also requires consistency and risk-management around agricultural production, in addition to a mechanism or set of mechanisms that allow a community to self-finance its own projects.

It’s no coincidence that experiments in community finance and local currency are often linked to agricultural production – think of the grain banks of Ancient Egypt. Agricultural activity directly produces commodities of value in the form of food and materials, but it requires the ability to pay in advance for seeds, equipment, land, and labour.

Since crops are subject to unpredictable external factors like weather, agriculture carries inherent risk. For a financial system that perceives each loan or investment as isolated, loans that increase food security and the overall health of a local economy are neglected or seen as high risk.

Jim Golden and his draft horses Spike and Rosie. His SHARE loan was to complete a barn for the team.

This is where community finance can play a role. Just as organisations like Kiva, a peer-to-peer microlending platform, enable businesses to take out low or no-interest loans guaranteed by their peers today, the SHARE (Self-Help Association for a Regional Economy) programme enabled community finance during a time of historically high interest rates. From 1981 to 1992, the SHARE programme enabled residents of the Berkshires region of Western Massachusetts to collateralise loans to local business – businesses which would otherwise be rejected for bank loans. At the time, the US Federal Reserve had dramatically increased interest rates to fight rampant inflation. By the summer of 1981, interest rates on business loans was sometimes as high as 20%, yet the share programme enabled small businesses to take out loans at half that rate from their own community.

SHARE’s innovation in community finance continued to be successful and, among other programmes, advised two farms in the region to issue a scrip currency. One of the local farms needed funds to heat their greenhouses during the winter when cash was short; the other needed to repair and recover from fire damage. These farms sold what were called Berkshire Farm Preserve Notes for $9 during the winter. Once the harvest came, they accepted the notes back for $10, effectively giving a 10% discount to customers who pre-purchased farm produce.

Robin Van En (center) and other Indian Line members by Clemens Kalischer.

Yet viewed from the other side, this can be understood as a safe 10% return on investment – paid in farm produce – to those who invested in local agriculture. Analysing this further, this type of scrip currency can be seen as a grassroots financing scheme, one not dissimilar from the Community Supported Agriculture (CSA) model.

Under the CSA model, all risks and rewards are shared with the community rather than absorbed by the farmers alone. Community members finance the operations of a CSA farm by pre-paying for CSA shares – a claim to a portion of the farm’s produce in the upcoming season. During a good year, community members with CSA shares receive high-quality produce below market prices; during a bad year, the financial impacts of the bad harvest are absorbed by the community. Importantly, the community reaps long-term benefits regardless of what happens. By smoothing out a farm’s income and insulating it from market shocks and external risk, the community ensures its own access to nutritional food.

In the same spirit, local currencies can and have given communities the tools to self-finance in times and places when the existing financial system cannot or will not do so. Local currencies serve multiple purposes and, depending on how individual currency programs are designed, each will serve some purposes better than others. It is important not to think of local currencies only as incentive systems that increase regional spending; local currencies can also be democratic systems of finance, tailored to the specific needs of the communities they exist in. These systems can (and already do) extend community credit to efforts which would otherwise not receive loans or funding.

The problem of accessing large-scale investment becomes less and less an issue as a regional currency achieves greater adoption. The Sardex currency system in Sardinia, Italy has been receiving a lot of press recently, and currently clears over €8 million in mutual credit payments between business each month. Another mutual credit system, the WIR in Switzerland, provides the means of over 1.5 billion Swiss francs per year and has been growing since 1934 when it was started to address a lack of access to credit. In Kenya, the Sarafu-Credit programmes operated by Grassroots Economics are also mutual credit systems, and they provide microfinance zero-interest loans in local currency to businesses and vendors who would otherwise have no access to credit.

Sharing a common thread with crowdfunding, lending circles, and even investment through credit unions and public banks, local currencies tap into the latent potential for communities to finance their own development. Just like these other community finance initiatives, any profits generated by endogenous financing from local currencies continue to enrich in the region.

Unassumingly nestled at the bottom of a sleepy hill in South Egremont (also in the Berkshires region), Indian Line Farm exists as an example of what the intersection of land, finance, and agriculture could look like in the new economy. Not only was it the first CSA farm in the United States, but Indian Line accepts the BerkShares regional currency as payment. BerkShares was started in 2006 by the same community that initiated the share programme and Berkshire Farm Preserve Notes, and still circulates today.

BerkShares local currency.

If that weren’t enough, Indian Line Farm also sits on CLT land and the lease requires that land to always be used for farming – it can never be used for any other purpose. In an innovation rare among existing CLTs, the farmers at Indian Line are not only entitled to equity derived from value they add to buildings on the land, but also from the value of perennial stock and organic soil improvements. By including this in the lease, the CLT ensures that the farmers’ economic incentives will always remain in alignment with the long-term environmental goals of the community.

Most often, when CLTs are mentioned in the media, it is in relation to low-income housing. This is because CLTs dealing with affordable housing or neighbourhood restoration have tax exempt status under US federal law. Yet there is nothing that actually requires a community land trust to be used for low-income housing.
In fact it is possible for all types of land to be held by CLTs, and it is also possible for equity to be given to individuals living and working on any type of CLT land.

Though a tax-exempt CLT cannot offer equity to individuals, it can use a two-tier framework to do so, where a subsidiary holding company manages the land and offers equity to those who live and work on it. This framework -commonly used by churches and educational institutions – was developed and acted upon by the Community Land Trust in the Southern Berkshires that holds Indian Line Farm’s land.

(in photo from left to right: Bob Swann, Ursula Cliff, Susan Witt, Frank Lowenstein, Clemens Kalisher, Elizabeth Keen and Al Thorp celebrate the 1999 partnership formed in order to transfer ownership of Indian Line Farm from the estate of Robyn Van En. Photo by Clemens Kalischer.)

This framework allows all types of land to be donated, including land used for commercial purposes, and business owners or other leaseholders are entitled to equity in improvements made to businesses or anything else built on CLT land. As far as land reform goes, this innovation is truly groundbreaking in the way it enables most types of land to be held securely in common.

These three elements – land, agriculture, and finance – fundamentally influence the wealth flows and power dynamics that permeate society and shape it. By using and improving existing models, communities can build a resilient foundation where decommodified land is held in trust, the risks of agriculture are socialised, and regions maximise their ability to self-finance. With a foundation this solid, a community would be primed and equipped to direct its own development in any way it sees fit.

Aaron Fernando is a community currency consultant who has worked with multiple community currencies across the United States, and is also a writer focusing on local movements, new economy initiatives, and behavioural economics.

Lead image Indian Line Farm, by Jason Houston.

The post Beyond Civil Rights: Economic Democracy appeared first on P2P Foundation.

Aaron Fernando: The concept of ownership is a social contract that allows certain individuals and groups to have rights to certain resources or items while excluding others from that access. Under the mainstream conception of private property, both the ownership of land and anything built on top of it are combined into one. This bundling of land and buildings is often problematic — it puts neighborhoods and residents of cities in an unnecessarily precarious position by making them subject to the whims of land speculators.

This form of land ownership also prices out locals from areas that they historically lived and worked in by increasing costs — catalyzing the process of gentrification. It also privatizes and encloses common spaces and areas that previously benefitted surrounding communities, ultimately leading to a more fragmented society, one required to focus on uownsustainable short-term profits. All this holds true as long as land remains on the market.

Yet what we see today is a resurgence and re-invention of ownership models that allow communities to take care of themselves and steward their own natural resources. The Community Land Trust (CLT) model is one that reduces the socially-destructive effects of market forces by separating the ownership of land with the ownership of any property and equity atop the land itself.

Affordable housing-related CLTs are probably best-known, but this model can be applied for any community goal, including lowering costs for small businesses and ensuring local food production. Though the CLT model has been re-emerging since the late 1960s, it is actually somewhat of a return to indigenous practices around ownership of land and resources.

Winona LaDuke, anti-pipeline activist, water protector, and member of the Ojibwe nation spoke about this during the 1993 Annual E. F. Schumacher Lectures. “Our traditional forms of land use and ownership are similar to those of a community land trust,” LaDuke said. “The land is owned collectively, and we have individual or, more often, family-based usufruct rights: each family has traditional areas where it fishes and hunts.”

Typically, a community land trust works by having a nonprofit (the community land trust’s legal entity) own the land and lease its long-term use to individuals — usually for 98 years. These leaseholders own anything that sits on top of the land, so if they make any improvements to their houses or other buildings, when they sell their buildings they can recover the buildings’ equity.

There is a fitting circularity at the root of LaDuke’s statements, because these lectures are hosted by the Schumacher Center for a New Economics (where I work and where LaDuke will again be speaking), a nonprofit co-founded by Bob Swann, who was also one of the pioneers of the first community land trust in the United States.

The Indian Line Farm. Photo courtesy of Amelia Holmes/Schumacher Center for New Economics

Another CLT started by Bob Swann in the Berkshires region of Western Massachusetts has put in place an additional innovation to ensure sustainable land stewardship. The Indian Line Farm gives farmers equity in not just their buildings, but the soil itself. A soil sample was taken at the start of the lease and another will be taken if farmers decide to move away. The farmers are entitled to the equity generated by any organic improvements to the soil on the land, in addition to improvements on the buildings.

On a deeper level, this leads to the question of whether natural resources can be owned at all. “In our language the words Anishinaabeg akiing describe the concept of land ownership. They translate as ‘the land of the people,’ which doesn’t imply that we own our land but that we belong on it,” LaDuke said.

As LaDuke explained, for the Ojibwe land and resources are managed as a commons.

“We have ‘hunting bosses’ and ‘rice chiefs,’ who make sure that resources are used sustainably in each region,” LaDuke said. “Hunting bosses oversee trap-line rotation, a system by which people trap in an area for two years and then move to a different area to let the land rest. Rice chiefs coordinate wild rice harvesting. The rice on each lake is unique: each has its own taste and ripens at its own time. We also have a ‘tallyman,’ who makes sure there are enough animals for each family in a given area. If a family can’t sustain itself, the tallyman moves them to a new place where animals are more plentiful. These practices are sustainable.”

If this sounds familiar, it may be because Elinor Ostrom won the 2009 Nobel Prize in Economics for analyzing and popularizing these ideas, debunking the belief that a tragedy of the commons was inevitable without government intervention. Ostrom was awarded the prize “for her analysis of economic governance, especially the commons” after she looked into the practices of natural resource management of groups like the Ojibwe, who had been managing their resources sustainably for centuries.

As new economy movements and sharing projects gain traction around the country and globally, it is important and helpful to realize that this models are nothing new; they are a return to centuries-old sustainable practices. As Ostrom, LaDuke, and many others have noted, the main reason why the indigenous resource management and land-use practices were trampled down is because the courts refused to uphold property held in commons. Now, in the nick of time with the CLT models and others, this is slowly changing.

Header image of Winona LaDuke courtesy of Honor The Earth

The post How Indigenous Land-Use Practices relate to Community Land Trusts & The Commons appeared first on P2P Foundation.