Globalizing Poor Farmers

Stephen DeAngelis

September 26, 2008

Two years ago I wrote a post focused on the announcement that the Bill & Melinda Gates Foundation had teamed with the Rockefeller Foundation to tackle food security in Africa [Gates & Rockefeller Foundations Tackle Food Security in Africa]. Their plan for strengthening African food security was modeled on the Rockefeller-pioneered “green revolution” that transformed farming methods in much of the developing world nearly a half-century ago. The two foundations decided to team up because Africa is the only part of the world where food production has decreased in recent years. Now the Gates Foundation is partnering with the United Nations World Food Program to transform how poor farmers get their crops to market [“Aid Plan Aims to Help Poor Farmers Reach Markets,” by Philip Rucker, Washington Post, 25 September 2008]. Rucker reports:

“In an ambitious move to combat the global food crisis, the Bill and Melinda Gates Foundation on Wednesday unveiled an experimental public-private initiative that could transform rural agriculture in undernourished parts of Africa and Latin America by helping small farmers sell their surplus crops at competitive prices. Rather than only delivering food to hungry nations, this partnership between the world’s richest philanthropy and the U.N. World Food Program promises to help build a sustainable farming infrastructure across the developing world.”

This initiative comes on the heels of the latest collapse of what is known as the Doha Round of trade talks that were supposed to help farmers in poor countries. For more on the reasons behind the failure of the Doha Round, see my posts Doha Trade Talks & Globalization’s Future and The Collapse of the Doha Round. The objective of the Gates/UN initiative is to connect farmers with markets.

“The Purchase for Progress program will give poor farmers, many of them women with little or no access to commercial markets, a chance to move beyond subsistence living with opportunities to sell their milk, grains, produce and other products to reliable buyers. During a five-year pilot period, it hopes to increase the incomes of 350,000 farmers in 21 countries and give them a path out of poverty.”

What I like about the initiative is that it is a private/public partnership, rewards hard work, fosters market economies, improves regional economic connectivity, and keeps farmers on their land. Dealing with famine is a complex issue. The provision of free food can undermine efforts of local farmers. The establishment of feeding stations takes victims from their lands, which means they are unavailable to plant crops went conditions improve and, therefore, prolong the crisis. This new initiative doesn’t solve all of the challenges associated with famine relief, but it is a new and unique approach to food security.

“‘This is not your grandmother’s food aid,’ said Josette Sheeran, executive director of the World Food Program. ‘This is a revolution in food aid, where food aid becomes a productive investment that not only feeds today but produces solutions for tomorrow.’ Funded largely by the Gates Foundation, the program is part of the foundation’s broader $900 million investment in agricultural development, with many of its efforts made in concert with foreign states and public institutions. The initiative is the latest example of how software giant Bill Gates, who stepped down this summer from Microsoft, is committing his time and fortune to trying to create a results-oriented brand of philanthropy focused on taking risks to achieve lasting impact.”

Gates, who has been showing his lighter side thanks to Microsoft’s latest ad campaign aimed at challenging Apple’s very successful campaign knocking the Windows Vista operating system, wants to make sure that the billions he is giving away creates lasting change.

“Gates said he hopes the effort linking poor farmers to commercial markets will be successful enough that it becomes ‘self-sustaining,’ no longer needing private funding. ‘It transforms the way that small holders are able to get to market, whether it’s helping them with guaranteed purchase, helping them with their storage, understanding crop quality,’ Gates said. ‘It will increase the supply of food, and it will increase the well-being of these farmers.'”

From Gates’ brief description, the Purchase for Progress program is taking a holistic look at food security. I’m a big believer in that approach. It doesn’t do any good to increase crop production if the infrastructure doesn’t exist to get the crops out of the field and into markets or warehouses. While the Gates Foundation announcement is welcome news, Rucker indicates that it is not the only good news coming out of New York.

“Purchase for Progress is one of several public-private hunger initiatives expected to be announced this week in New York, as world leaders converge at the U.N. General Assembly to draw attention to the Millennium Development Goals, a series of benchmarks aimed at slashing the poverty levels in the world’s poorest countries by 2015. Former president Bill Clinton will announce at his philanthropy conference on Thursday that Yum! Brands, the parent company of such fast-food chains as KFC, Pizza Hut and Taco Bell, is donating $80 million over five years to purchase 200 million meals for school-age children. This is part of a five-year campaign by the restaurant behemoth to provide hunger relief to the poorest people in the United States and worldwide. The company’s 35,000 restaurants in 111 countries are pledging to donate $200 million worth of prepared foods to community soup kitchens and food banks, Yum! Brands chief executive David Novak said.”

Food security is obviously getting a lot attention this year because the global food crisis. I’ve written several posts about the crisis. For example, in the post entitled Food and Water Shortages in the Middle East I discussed how populations living in arid climates are struggling to raise enough food on which to live and some of the innovations being developed to help. In the post entitled Rising Food Prices take the World’s Stage, I discussed some of the reasons for the rise in prices (e.g., climate change and increased demand of grain for biofuels). In a later post [Cultivating the Right Biofuel], I added another reason pointed out by New York Times columnist Roger Cohen; namely, globalization’s success means that more people can afford to eat better. Rucker reports that world hunger remains a serious problem.

“Hunger around the world is so chronic, scholars say, that it far outstrips the financial resources committed to fight it. The number of hungry people worldwide has ballooned over the past year to 923 million and threatens to grow further, Sheeran said. The problem is growing against the backdrop of a food price shock that is roiling world markets and igniting street riots. Over the past three years, world food prices were estimated to have surged by 80 percent, outpacing the 78 percent jump during the Soviet grain emergency of 1972-75. ‘There’s a need for a much larger international response,” said Jeffrey D. Sachs, an economist and founder of the Millennium Promise Alliance, an anti-poverty nonprofit organization. ‘The Gates Foundation is playing an important role in helping people become aware of this, but in this case no single action is going to be decisive.'”

Rucker concludes his article by returning to the Purchase for Progress program.< /p>

“The Purchase for Progress program, to be administered by the U.N. World Food Program, is being funded by $66 million from the Gates Foundation, $9.1 million from the Howard G. Buffett Foundation and $750,000 from the Belgian government. Program planners said that if the pilot program is successful, it will be expanded. … About 1.1 billion people live on $1 a day or less, and more than seven in 10 people around the world depend on work in agriculture for food and income, said Rajiv Shah, agricultural development director of the Gates Foundation. ‘In order to help farmers and small farmers in part move out of poverty, you need to help them improve productivity,’ Shah said. ‘But you also need to improve access to markets and create the financial and commercial incentives so that farmers are rewarded for their additional efforts.’ In a preliminary test of the program last year in Uganda, poor farmers achieved dramatic results, Shah said. Buffett, an environmentalist and businessman whose father, investor Warren Buffett, has pledged much of his fortune to the Gates Foundation, said the program provides ‘a critical link’ to existing efforts to boost crop production. ‘Agriculture development is the most effective way to combat poverty and pull these people in these populations up into a higher level of food security,’ Buffett said. ‘It’s important to realize that we can all work on the production of the supply side, but without something to pull that through to the market, we’ll never be successful in our efforts.'”

Whenever I discuss Development-in-a-Box™ with the leaders of emerging market countries, I stress the importance of taking a holistic approach to the economy. The movement of goods from point of origin to markets (be they agricultural products or leather jackets) is essential for economic success and sustainability. It’s encouraging to see the broader development community embrace this end-to-end approach. It indicates that they understand that embracing globalization has a much better chance of improving the lives of people than efforts to resist it.