[EXP] Regionalwert AG: citizen capital for a regional organic food economy
Regionalwert Burgeraktiengesellchaft (Citizen Stock Company) in the Freiburg Region
Type: Success story
Date of writing: June 30, 2010
Author(s) of this page: Titus Bahner
Organization(s): RWAG (Regionalwert AG)
Regionalwert AG was founded in 2006 to build up a regional organic food industry based on investment coming from local citizens. It know has a capital of € 1.7 million, owned 450 stockholders. It owns seven businesses and regularly enlarges its network of activities. These businesses include farm businesses as well as processing and distribution businesses. Investment return is twofold. On the one hand, it is calculated according to financial added value, on the other hand, it is also embodied in immaterial socio-ecological values.
Regionalwert AG (AktienGesellschaft) was founded in 2006 by Christian Hiss, in south-western Germany. This qualified gardener “socialized” his 28 ha biodynamic family farm in Eichstätten near Freiburg, by converting it to a shareholding company in order to enable citizens to invest in sustainable development and regain control over their local food system. He constituted the initial capital with his business assets and contributions in kind. His aim was to build up and to strengthen a regional organic food industry, by publicly offering shares to local citizens.
These consumers cum investors thus take part in a local value chain, from the field to their plate. They support: investment in organic agriculture ; investment in sustainable enterprises with fair social standards ; only regional investment ; only investment in small/medium enterprises ; investment in biodiversity and landscape.
RWAG doesn’t run the businesses itself. Instead, it funds them, buys them or rents them. It also buys agricultural land separately. Agricultural businesses have to be in organic production or undergoing conversion to organic agriculture. Currently, RWAG has a capital of € 1.7 million, owned by 450 shareholders. Membership shares or passive company participation can also be allocated.
The partner companies, which are partly or totally financed by RWAG, are : a horticulturist, a dairy farm which includes cheese production, an organic shop located in town, a wholesale organic shop, an orchard, an organic catering and a home delivery service. A gastronomic business and a vineyard have just joined the network. The company’s portfolio is continuously extended.
Once a year, the businesses have to publish a sustainability report. In this way it can be established whether the social-ecological added value amounts to the financial one. This social-ecological added value can be regarded as an immaterial investment.
The legal status of AktienGesellschaft is very demanding in terms of business management. It only makes sense if applied to a regional scale but does not pay off for individual farm businesses. RWAG is active in a perimeter of 150 km around Freiburg.
The company is led by a board of two directors ; its supervisory board, composed of six members, is responsible for following its development.
The creation of Regionalwert AG has gathered considerable public support and interest from the media. So far nine partner enterprises are financed and new contracts are soon to be completed. The type of company chosen (Aktiengesellschaft) is an offensive form which stirs people into action. In only six months the RWAG mobilised more than one million € from regional citizens. Clearly, local citizens are ready to invest money in local food production. They are concerned with the development of their region. It is important that socio-ecological values be well identified and understood : the capital investment of the RWAG is tied to fair payment for employees of the enterprises ; through capital investment and transparent accountancy the citizens obtain an insight into the problems of regional and small-scale agriculture.
So small/ medium enterprises can be founded or preserved. Jobs are created and knowledge about regional ecologic agriculture is preserved and relayed. Landscape and biodiversity is protected from monoculture. This process enables the increased involvement of the citizens in the sustainable shaping of food consumption and regional landscape development.
In the future, Regionalwert AG wants to extend its activities to cover the entire value chain and is also planning to use its capital to fund other businesses. Many other regions have contacted us to learn and get inspiration from RWAG which provides them advice and expertise. Similar economic clusters are thus likely to develop in other German regions. RWAG is also planning to set up a research centre to help develop its strategy and give it a scientific basis.
For the idea of creating the RWAG the founder C. Hiss received an Ashoka fellowship in October 2009. One month later he received the German Government Council for Sustainability Award for ‘social entrepreneur of sustainability’.
German presentation of the experience in the attached document.
Scale of intervention : Regional