A Beef With Ag Financing Leads to an Innovative Alternative

Zach Ducheneaux, the Intertribal Agriculture Council’s new executive director. (Photo by Chris Dickinson)

This Q&A originally appeared in the June 2019 “Tourism, Agriculture & Natural Resources” print edition of Native Business Magazine.

The Intertribal Agriculture Council (IAC) has been advocating for Native American food producers since 1987. “We serve Native American agriculture anywhere across the country in any portion of the food sector — from a soil scientist to a grocer. We help any Native looking to highlight locally sourced, Native-grown food to provide a livelihood for his or her family,” says Zach Ducheneaux, IAC’s new executive director and a member of the Cheyenne River Sioux Tribe.

A third-generation rancher whose family raises quarter horses and beef cattle, Ducheneaux knows first-hand that the greatest challenge to Native food producers “is the lack of affordable capital.” He says the current financing model for agriculture is not working. “Right now, we are using our great-grandfathers’ financial instruments, the same ones that created the farm crisis of the 80s and 90s, and rebranding them with the same terms. As a result, farm debt has increased 4 percent a year since 1994, and that’s not sustainable.”

Under Ducheneaux’s leadership, the IAC has created an alternative to the current ag financing model that has shackled food growers with debt. It is called “sustainability finance.” As Zach Ducheneaux explains, “We want food production in Indian Country to be by Indians as opposed to commodity production for the benefit of corporate agriculture.”

He says while Indian Country grows enough food to feed its people, the food is lost in the commodity market when it leaves the reservation as a raw product. “The finance structures are set up to keep our producers in the cycle of selling a commodity as opposed to owning it further into the value chain.”

But will IAC’s new ag financing model work? “We are betting the farm on it,” says Ducheneaux.

“We treat agribusinesses as investment opportunities.” —Zach Ducheneaux (Photo by Erin Worrell)

NBM: Tell us about your innovative financing model for agriculture.

Ducheneaux: IAC’s solution is “sustainability finance” through our $2.9 million CDFI named Akiptan (Ah-Keep-Tahn), Lakota for “bringing together or sharing in a cooperative manner.” We treat agribusinesses as investment opportunities. Rather than making loans, we invest our capital in Native businesses for a return on investment. Our investment capital is deployed into these communities rather than lent at the expense of these food producers. Currently in ag finance, there is no alternative onramp. It is just one ramp that runs down ag finance’s interstate, and it’s the only way to get to your destination. On our interstate, we are partners. We share in the journey.

NBM: What types of Native food projects has IAC invested in?

Ducheneaux: We’re working with Native agribusiness partners from Oregon and Washington to Montana and South Dakota. Projects are pending in Minnesota and North Dakota. Some investments include a greenhouse, a feed store, a livestock hauler and a cow herd. Pending projects include cattle loans and a butcher shop. Also, we’ve been very successful in helping food partners, such as Red Lake Nation Foods and Tanka Bars, sell their products overseas at a niche market price through our American Indian Foods program.

NBM: Why is the IAC important to Indian Country?

Ducheneaux: When European settlers arrived, they brought agricultural practices that didn’t work in Europe. However, what we were doing here was working ― sustainable agriculture, local food systems, vibrant trade and economic pathways. Unsteady land-use policies that favor European-style agriculture have not included Native producers, so the IAC advocates for them. The IAC hopes to remind us that sustainable agriculture was practiced on this continent long before Columbus stumbled across the ocean blue.

NBM: What do you think of the explosion of cannabis farming in Indian Country?

Ducheneaux: I believe it is a tremendous distraction for Indian Country. Nearly all of our production leaves our communities without any value added in our economy. We suggest Tribes consider value-added agriculture with what is already growing on our lands — meaning we own the crop beyond just producing it. For instance, beef cattle. When a feeder calf left the reservation last year, it was worth $900. In the store this fall, that same animal would fetch around $2,500 and all of that value is added in other economies, not in Indian Country, due to the financing structure that has evolved to benefit those on the ag finance side.

NBM: What is your long-term vision for the Intertribal Agriculture Council?

Ducheneaux: By demonstrating our economic impact in Indian Country, we hope to grow an endowment to fund the IAC for generations to come, so services and resources are always available for Native food producers.