Bill Gates: If you can help farmers grow a
lot more, that's a fantastic thing.
Most of these farmers don't have very good
seeds, and they can't afford fertilizer, and
they don't get much advice about what to grow
and how to grow it.
So the upside for African agriculture is it's
possible to triple productivity.
So figuring out how a foundation can come
in with pretty modest amounts of money and
get that productivity up, that's our dream.
One thing we do is we help crop research.
We help them create better seeds.
But then, trying to get it to these farmers,
particularly the very poorest farmers.
If you're not careful, if you improve things,
the wealthy farmers near the cities will be
the primary beneficiaries.
So asking people how much of your output they
have to consume themselves, and understanding
as the years are good and bad, do you have
years where you have to eat 100%, or where
you're actually not even getting enough?
John: Agriculture is weird because it is a
market, it is a capitalist market, but it's
also one that, you know, in the US, we provide
what amounts to direct assistance with crop
insurance.
It's a weird market.
It's different from other markets.
In that way, it's a little bit like health,
which is also kind of a market, but also kind
of not.
Bill: Because you want people to get enough
food, because farmers are politically influential,
you're right.
Even in rich countries, where it's only employing
2% of people, the prices are very distorted.
In poor countries, even more so, because there
are some true market failures, like who's
gonna build storage, or who's gonna provide
credit.
John: If A) you didn't make enough money last
year, or B) you spent all of it, then that
becomes impossible.
So is one of the ideas of this cooperative
to try to even that out, so that that capital--you
have that capital going into each season?
Bill: Yeah, that's a huge market failure,
is that typically, banks won't take the credit
risk that they should, because they're going
to have a problem if, let's say, there's a
drought that year.
That bank could literally go bankrupt.
So it's not uncorrelated risk, it's correlated
risk that all your borrowers, their credit
is what they grow, and bad weather could make
every single one of them unable to repay that.
Teaching people what seeds to use, the idea
that if you buy hybrid seed instead of using
your leftover seed, that that's a huge payoff.
It takes a while for people to be used to
that.
If you happen to do that the year when the
rain doesn't come, you're gonna be very sorry.
John: Right.
Bill: ...because you're gonna have this debt
that you may never be able to pay off.
John: Can foundations, can we really insulate
against that risk?
Bill: Well, the Mexican government has done
cash support, and they can adjust that based
on whether the weather's been bad or good.
If the government does these things well,
it essentially can come in and play an appropriate
type of crop insurance type role.
There is this idea of micro-insurance, you
know, on your cell phone, learning what price
you should get, getting more advice, even
being able to take a photo of something and
having somebody say, you know, what's going
wrong with your plants.
The only thing working against these farmers
is climate change.
Every factor is working in favor of farmer
output, self-sufficiency, better storage,
you know, amazing seeds, particularly if we
can use advanced techniques, but climate change
is working against them.
So mostly, it's a positive story.
