Citizens finance and engage in peri-urban farm estate – Hofgut Oberfeld

Hofgut Oberfeld is a mixed farm located in the east of Darmstadt in in south-west Germany. The former state domain is managed according to biodynamic guidelines since 2006.

The agricultural enterprise is organised as a shareholder corporation and is now supported by 140 shareholders. On a total area of 155 hectares, arable farming and animal husbandry are carried out following circular economy principle. The products are further processed in the company’s own cheese dairy and bakery, and most of them are also sold directly in the own farm shop and café. In addition, there are housing and workplaces for people with disabilities at the farm location.

The farm         

Hofgut Oberfeld is a farm that operates according to Demeter (bio-dynamic) principles and markets a large part of the products with other organic foods in its own farm shop. In order to add value, the processing of agricultural products in the farm’s own cheese dairy and bakery is also part of the overall concept. The farm cultivates arable land and vegetables and keeps livestock, from which it produces a wide variety of products. The farm has a total of 40 dairy cows, 1,200 laying hens, broilers and geese.

In addition to the farm shop, the café attracts further visitors every day. Public events also take place regularly and inform those interested in the activities and background of the farm.

The farm’s holistic approach means that existing resources can be reused and, for example, fertilizers do not have to be purchased. As an organic demonstration farm, it shows organic farming in practice to visitors. This intentional involvement of visitors (consumers) aims to raise awareness about the origin of the consumed food. The seasonal gardens also fit in well with these objectives, as everyone has the opportunity to cultivate their own vegetable garden.

In addition, the farm also sees itself as an educational institution and works closely with the initiative Lernort Bauernhof (Learning Place Farm), which also tries to bring agriculture closer to the (young) population. The holistic concept realized on the farm Oberfeld is the result of a deep conviction of the founders. They are convinced that there is no alternative to organic farming in the long term. The Hofgut is also aware of its social responsibility and offers housing and jobs for people with disabilities.

Development paths                

Today’s Hofgut Oberfeld has a long agricultural tradition. The area once belonged to the Grand Duke of Darmstadt and later became a state domain. Before the present owners took over the business, only two employees worked on the farm.

The local residents founded a citizens’ initiative to ensure that agriculture was once again practised on the land for the local population and that products were also offered locally. The committed citizens were able to convince the State of Hesse and thus managed to maintain the agricultural business. The State of Hesse handed over the land and the buildings to the citizens’ initiative.

As a result, in 2003 local citizens established the foundation, which was able to buy the farm and lease all the land with a generous donation from a local company. Only after that in 2006, the Hofgut Oberfeld Landwirtschaft AG (shareholder corporation) was founded. The foundation thus paved the way for the Hofgut Oberfeld as it exists today.

Many of the citizens who were active in the citizens’ initiative later joined the shareholder corporation. Thus, the citizens’ initiative has developed further into a civic enterprise. There was a large support from the population and many of the citizens were ready to take responsibility and risk.

The company started small and with time new branches were added or expanded. In the beginning, products were sold with a small sales cart. This made it possible to test for the first time the extent of demand and the wishes and ideas of customers. Only later, the large sales area of the present farm shop was built.

The construction of the cowshed was a very important milestone, because as a result the people noticed the farm even more.

Business model                        

The company is organised as a public limited company. When Hofgut Oberfeld Landwirtschaft AG was founded in 2007, 30 shareholders supported the public limited company with approx. 300,000 euros of capital. In the meantime, it has around 140 shareholders and around 1.5 million euros of equity at its disposal.

The shares are “registered shares with restricted transferability”, meaning that they can only be sold with the approval of the Supervisory Board, and the respective owner is always known. Once a year, the annual financial statements are presented to the shareholders’ general meeting, which decides on amendments to the articles of association and elects a supervisory board every three years. The board in turn appoints the Executive Board for a period of five years. The Executive Board manages the company and coordinates long-term decisions and major investments with the Supervisory Board.

The legal form reflects the self-image of the company well, as in a shareholder corporation the shareholders can also participate in making business decisions. In addition, this organisational structure requires a high degree of transparency, which, according to those responsible, is self-evident and necessary in order to create long-term trust. Many of the shareholders are from the region and are customers themselves. This form of organisation promotes local networking. For example, shareholders were able to support the company with specialist knowledge, especially in the initial phase.

In addition, this legal form means that the company is largely independent. For the farm manager, the advantages of this form of organisation dominate considerably. The only challenge he currently sees is the consumer protection requirements imposed by the BaFin (Federal Financial Supervisory Authority), which are considerably more complex once the company reaches a certain size.

Innovative practices               

Even if the farm appears to be traditional, it is a highly modern farm, which is well-positioned for the future. The most innovative aspect is the way in which the company is financed, which is made possible only by the 140 shareholders.

In addition, the entire value chain of the diverse products is located in at the farm and even living space for employees* has been created directly on the farm. This combination of diverse working and living areas on the farm grounds is a very exciting and innovative concept. The farm combines innovation and tradition in a meaningful way in all areas and stages of the value chain. For example, the chickens live in mobile henhouses, which are moved every week to a different place, ensuring that the chickens always have fresh green fodder and can develop optimally. The cowshed also meets the modern animal husbandry criteria of organic farming, which includes open shed construction and maternal calf rearing.

In 2016, the farm was one of three to win the Federal Organic Farming Competition, where the implementation of innovation in organic farming on the farm was particularly well received. The attractive offer, which is interesting for all age and interest groups, is constantly being changed and adapted to people’s wishes. Social innovation therefore also plays a decisive role in the success of the company.

Future              

In this case, the farm has already gone through a long development path involving the construction and renovation of new production and sales areas. The marketing strategy is very successful and already attracts many visitors and customers. Nevertheless, further projects are already being considered for the future. As a core principle, the farm wants to maintain the diversity concept the old no longer used cowshed, which is under a preservation order, is to be renovated in the long term and thus will offer new space for new developments. In addition, the owner of the farm could imagine to extend the offer of vocational training places in the bakery and to offer vocational training in the cheese dairy in the future as well.

Tips for the learner                 

In order to build a successful business it is important to be open to new developments. And if there are promising opportunities, you have to have the courage to go down unknown paths.

Communication and the exchange with potential customers are indispensable in order to get a better understanding of their needs and ideas. In the next step, this information can be used to develop new products that can enjoy greater demand.

Practical training in agriculture is also recommended. A theoretical university education can certainly also be helpful in some respects, but more importance is attached to practical training because it contributes significantly to gaining experience and being able to better assess new situations in the course of setting up one’s own business.

Authors: Corinna Sass, Simone Sterly