Gates / Africa /$306 Million Commitment to Agricultural Development

January 25, 2008

$306 Million Commitment to Agricultural Development

Investment intended to help millions of small farmers lift themselves out of hunger and poverty

DAVOS, Switzerland — The Bill & Melinda Gates Foundation today announced a $306 million package of agricultural development grants designed to boost the yields and incomes of millions of small farmers in Africa and other parts of the developing world so they can lift themselves and their families out of hunger and poverty.

Announcing the grants at the World Economic Forum in Davos, Switzerland, Bill Gates, co-chair of the foundation, said that support for agriculture in the developing world had been relatively neglected in recent decades, but was a critical tool to drive development in rural areas, where the vast majority of the world’s poorest people still live. Gates was joined by Dr. A. Namanga Ngongi, President of the Alliance for a Green Revolution in Africa (AGRA) and World Bank President Robert B. Zoellick.

“If we are serious about ending extreme hunger and poverty around the world, we must be serious about transforming agriculture for small farmers—most of whom are women,” said Gates. “These investments—from improving the quality of seeds, to developing healthier soil, to creating new markets—will pay off not only in children fed and lives saved. They can have a dramatic impact on poverty reduction as families generate additional income and improve their lives.”

The grants nearly double the foundation’s investments in agriculture since the launch of its Agricultural Development initiative, part of the foundation’s Global Development Program, in mid-2006. The foundation believes that with strong partnerships and a redoubled commitment to agricultural development by donor and developing country governments, philanthropy, and the private sector, hundreds of millions of small farmers will be able to boost their yields and incomes and lift themselves out of hunger and poverty. To that end, the foundation plans to invest a total of $900 million through 2008.

The largest grant in the package is $164.5 million to AGRA to establish a Soil Health Program that will complement its existing Seeds Program and help small-scale farmers make full use of new high-yielding varieties of Africa’s staple food crops. The Rockefeller Foundation will contribute an additional $15 million.

The Alliance for a Green Revolution in Africa, an Africa-based and African-led partnership, is focused on helping small farmers increase their productivity and incomes through a comprehensive approach that addresses issues from seeds, soil and water to markets, agricultural education and policy. AGRA announced the Soil Health Program earlier today at its offices in Nairobi, Kenya. AGRA was established in 2006 with an initial $150 million investment from the Gates and Rockefeller foundations.

“Africa’s soils are among the poorest in the world, and poor soils produce poor crops,” said Kofi A. Annan, Chairman of the Board of AGRA. “This program aims to revitalize Africa’s severely depleted soils in order to increase the fertility and sustainability of small-scale farms while safeguarding the environment.”

The other five grants—to CARE, Heifer International, International Development Enterprises, International Rice Research Institute, and TechnoServe—total $141.5 million. The grants will primarily support work in country, including the development of local science, technology, farmer extension services, and market systems. Gates said the grants illustrated the range of intervention needed to ensure small farmers in Africa and around the world have the tools and opportunities to improve their lives: rice that can tolerate extreme weather conditions, more fertile soil, affordable microirrigation systems, improved farmer training, and enhanced connections to local and global markets in areas such as dairy and premium coffee.

“It is of little use if a farmer, through access to better seeds or soil or irrigation, boosts production but doesn’t have a market to sell the surplus,” said Gates. “Our approach focuses on the entire agricultural value chain—from seeds and soil to farm management and market access. We believe that is the only way to get long-term, sustainable results.”

According to the World Bank, three-quarters of the 1.1 billion people who live on less than $1 a day live in rural areas and depend on agriculture for a living. More than 820 million people suffer from chronic hunger in the developing world, and the number is rising. In the world’s poorest areas, small farmers frequently labor in harsh conditions. They face depleted soils, pests, drought, diseases, and lack of water. Even if they manage to grow a surplus, they lack access to reliable markets to sell their crops.

Despite the urgent need, the percentage of official development assistance that went to agriculture fell from over 16 percent in 1980, to under 4 percent in 2004; in addition, agriculture accounts for only 4 percent of public spending in agriculture-based developing countries.

But there is reason for optimism. For the first time in 25 years, the World Bank focused its World Development Report on agricultural development. The report shows that agriculture can drive massive poverty reduction and overall development. Almost no country has managed a rapid rise from poverty without increasing its agricultural productivity. Advances during the Green Revolution in Latin America and Asia doubled the amount of food produced and saved hundreds of millions of lives.

“We need a 21st Century Green Revolution designed for the special and diverse needs of Africa,” said World Bank President Robert B. Zoellick. “It must be driven by greater investments in technological research and dissemination, sustainable land management, agricultural supply chains, irrigation, rural microcredit, and policies that strengthen market opportunities while assisting with rural vulnerabilities and insecurities.”

African heads of state recently endorsed a plan, the Comprehensive African Agricultural Development Program (CAADP), which aims to increase government budget allocations for agriculture to 10 percent of national spending.

Cecilia Kapinga, a small farmer who lives in Mbinga, Tanzania with her husband and six children, has already experienced the powerful impact of agricultural development. TechnoServe, one of the partners in today’s announcement, has helped Cecilia and her family grow and process their coffee in a way that will fetch higher prices. The project has also connected them to buyers of high-quality coffee. The extra income has helped pay for food and running water and supported new business opportunities for Cecilia and her family.

“The biggest difference is the confidence we have in our future and in our children’s future,” she said. “We know the road we’re on and where it leads.”

Today’s announcement includes the following grants:

Alliance for a Green Revolution in Africa (AGRA)
African Soil Health Program: $164.5 million
To revitalize Africa’s severely depleted soils in order to increase the fertility and sustainability of small-scale farms and raise the yield and income of farmers, thus alleviating hunger and poverty. The project aims to boost the incomes and improve the well-being of more than 4.1 million smallholder farmers through 50 to 100 percent increases in their crop yields.

International Rice Research Institute (IRRI)
Stress-Tolerant Rice for Poor Farmers in Africa and South Asia: $19.8 million
To reduce poverty and hunger and increase food and income security of resource-poor farm families and rice consumers in South Asia and Sub-Saharan Africa through the development and dissemination of stress tolerant rice. Within three years, the project expects that 300,000 farmers in South Asia and 100,000 farmers in Sub-Saharan Africa will have adopted the initial set of improved varieties.

TechnoServe
Doubling Coffee Incomes in East Africa: $46.9 million
To help small farmers in East Africa increase their coffee prices by improving coffee quality, and increasing high-quality coffee production and training to link them to premium coffee buyers. Over four years, the project aims to double the coffee incomes of 182,000 smallholder coffee farmers.

Heifer International
East Africa Dairy Development: $42.8 million
To help small dairy farmers in Kenya, Rwanda, and Uganda double their income by developing stronger links to the formal sector, while at the same time increasing the quality of their milk to sell into the traditional sector. Within four years, Heifer International and its partners expect to double the dairy incomes of 179,000 smallholder dairy farmers.

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Bill & Melinda Gates Foundation
Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, the foundation is led by CEO Patty Stonesifer and co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.