The missing middle of food systems investing

TIFS is a thought leader and practitioner in the field of systemic investing. We work to seed and scale regenerative business and financial innovations by unlocking access to integrated and catalytic capital.

An important element of TIFS’ approach is to explore solutions for the Missing Middle of Food Systems Investing. We think of the Missing Middle as the gap between available capital and investable opportunities in Indigenous, agroecological, and regenerative food systems. Narrowing this gap requires thoughtful and coordinated actions between public, private, and philanthropic finance providers. 

The magnitude of the current financing gap to support a widespread regenerative transition is massive. Several studies estimate the global annual need for transition finance to be between USD $200 billion and $450 billion for at least the next decade. Only about USD $45 billion is currently funding these transitions.

The shortfall of financing for regenerative agriculture is not due to a lack of capital. Globally, formal agricultural credit is USD $1.1 trillion, and aggregate capital flowing to agriculture has experienced double digit growth in the past decade. The problem is systemic. Money is not flowing to the food producers who are implementing changes on-the-ground to affect food system transformation at the speed and scale needed.

To overcome the bankability gap and increase capital deployment for regenerative food systems, TIFS prototypes and implements approaches that connect financing needs of producers and businesses with financiers’ risk and reward standards.

TIFS’ focus on the “Missing Middle” emerged from our initial design phase, from 2020-23, as a common theme of both frustration and need among varying players in our ecosystem—investors, producers, and governments. 

Phase 0: Building on Food Systems Dialogues for Investors. TIFS’ Missing Middle dialogues build on  the Food Systems Dialogues for Investors—a series of conversations convened by Dr. David Nabarro and David Bennell in 2020. TIFS co-hosted one of these dialogues. Participants in the series identified the need for improved clarity and cohesion between investors and food and ag businesses, and better approaches to evaluate risk and opportunity in food systems. 

Phase 1: Building Collective Intelligence. TIFS convened several prototyping conversations in 2022, including at ESG for Impact, UN Convention on Biological Diversity COP 15, and TomKat Ranch Educational Foundation. In 2023, TIFS developed a dedicated invitational event series, the Missing Middle of Food Systems Investing, that were held in New York, Chicago, Washington D.C., and Denver. By bringing together people from government, business, finance, and farming - people with a mandate and motivation to take action - TIFS helped to identify collective strategies for unlocking finance as well as potential approaches that need to be prototyped and tested. 

In 2024 TIFS organized three targeted Missing Middle meetings about the “Missing Middle of Blue Foods” (Miami, NYC, and Portland, Maine) to gain a better understanding of the financing needs of and investment gaps in the global Blue Economy. These meetings surfaced similar themes as our previous dialogues. 

Phase 2: Prototyping Place-Based Solutions for the Missing Middle. At the 2023 meeting in Chicago, our stakeholders challenged TIFS to engage with farmers, businesses, and finance providers working on regenerative transitions in specific landscapes. In 2024, TIFS created a three phase strategy - with partner Metabolic and support from the Rockefeller Foundation - to co-create financing mechanisms that meet the needs of these communities. We prototyped our approach in Bellagio, Italy, shared the prototype during events at ClimateWeek NYC and RFSI Forum 2024, and are implementing the strategy in the US Midwest, Kenya, Brazil, Indonesia, and India.

Phase 3: Expanding the Dialogue. In 2025, TIFS intends to expand our Missing Middle strategies in two directions. We will continue to partner with stakeholders in specific landscapes to co-design, implement and fundraise for regenerative financing mechanisms. And, we will create space for global financial institutions to develop collective intelligence and create shared strategies for deploying capital for regenerative and agroecological food systems. For instance, many global financial institutions are expanding their natural capital solutions. However, many challenges need to be addressed to ensure positive outcomes of investments at the intersection of food systems and natural capital. TIFS will work with our partners to create platforms where the necessary pre-competitive conversations can take place.

Our Missing Middle activities have resulted in new investments in regenerative companies and have also surfaced specific needs for scaling finance for regenerative systems. In 2023 TIFS helped networked players secure USD $8 million in direct investments. In 2024 TIFS helped design a USD $1.2 billion lighthouse project involving agroforestry palm oil in Brazil, and informed the finance mechanism for India’s Community Managed Natural Farming lighthouse that helped it secure $120M for its next stage growth.   

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Additional Resources:

Financing for Regenerative Agriculture

Accelerating Market Maturity for Regenerative Food Systems

Seeding the Future of Regenerative Food Supply Systems: An RFSI interview with Tim Crosby and Rex Raimond, TIFS