The global economy might be reeling from the shakeout on Wall Street, but two of the world's richest businessmen are vowing to spend tens of millions of dollars more not on bolstering their own companies, but in helping the world's poorest. With Congress locked in talks over a mammoth bailout package, Bill Gates and Howard Buffett (Warren's oldest son) announced at the United Nations on Wednesday that their private foundations will plow more than $75 million into helping small farmers in Africa and Latin America to sell their crops as food aid a move which could potentially overhaul the decades-old and often criticized global food aid system.
Under a five-year pilot project called Purchase for Progress, the foundations will help 350,000 or so small farmers in 21 countries, most of them in Africa, to grow food for the U.N.'s World Food Program, the biggest food aid distributor in Africa. Rather than simply buying the farmers' crops outright, much of the money will go to teaching better farming methods, and to helping them store their crops in warehouses, plant higher-yield seeds, and transport their produce to customers. Those are all serious obstacles for poor farmers, many of whom find it almost impossible to eke out more than a bare-bones existence from their plots.
With WFP as a guaranteed client, many poor farmers will be eligible for credit with which to buy seeds and fertilizer, and perhaps employ people to help harvest the crops. "Once a farmer's group wins a contract they can take it to a local bank," says Rajiv Shah, director of agricultural programs for the Bill and Melinda Gates Foundation. "They can show that not only do they have the means to produce but a market to sell it." Gates told reporters on Wednesday that he aimed to "transform the way small holders are able to get to market." And WFP executive director Josette Sheeran called it "a revolution in food aid."
The revolution is long overdue, say advocacy groups. Organizations such as Oxfam and the London-based think tank Overseas Development Institute are critical of traditional food aid programs because they depend so heavily on western agricultural producers, such as the U.S. and Europe, and fail to help farmers in poor countries. When a crisis hits, as it did in Ethiopia this summer, the WFP typically asks governments to donate millions in emergency funds to feed people. That help comes either in food supplies or in cash, which the organization then uses to buy huge quantities of rice, maize and other staples from large-scale distributors. Aside from disasters like famines or earthquakes, the WFP also regularly feeds many poor people, including millions of children in school feeding programs; it estimates it will feed about 90 million people in some 80 countries this year. Yet despite its giant mandate and global scope, it buys "only a small percentage from small farmers," says WFP spokeswoman Laura Melo. "We have not targeted small farmers."
The injection of western food aid into a poor economy hurts local farmers by depressing prices, even in an emergency. That makes it even harder for millions of small farmers to buy the high-priced fertilizer or fuel they need to compete. "The backbone of world agriculture is small farmers," says Joaquim von Braun, director general of the International Food Policy Research Institute in Washington. "We will only grow out of the food crisis if these people have access to markets."
Politics is partly to blame. U.S. laws state that the $1.5 billion or so in food donated yearly by the United States the world's biggest food donor must be grown by American farmers and shipped on U.S.-flagged vessels, despite costing billions of dollars. "Congress has been very protectionist about its food-aid program," says Gawain Kripke, policy director of Oxfam America, which has pushed hard for changes in the U.S. laws. "The U.S. is a massive contributor of food aid, but a very inefficient one."
While the U.S. government has long dominated American aid, organizations like the Gates Foundation, which has nearly $36 billion in endowments, have become serious players in international programs. It will provide $66 million to the project, while the Howard G. Buffett Foundation will give $9 million; another $750,000 will come from the Belgian government for aid programs only in the Democratic Republic of Congo. "It sets a very important example," says von Braun. It could also change the WFP itself from a purely humanitarian organization into one which helps poor farmers and so ultimately weans millions off food aid. Says Shah of the Gates Foundation: "This is a market-based initiative." Open markets may be out of favor right now. But this is one we should be cheering for.