Lifting Farmers Out of Poverty

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Overview

Challenge Statement

Lifehack quote from Bill Gates on Ag

Design a potential XPRIZE focused on exponentially increasing the income for millions of smallholder farmers living on less than two dollars a day

Select Grand Challenge Focus Areas

An amazing competition design will focus on the smallest set of breakthrough innovations that can unlock the largest possible positive impact. After considering many different possibilities and consulting both internal and external experts in the field, the team has prioritized three “Grand Challenge Focus Areas” to be solved in this space: Access to Markets, Affordable Technology and Asymmetric Information. “Grand Challenge Focus Areas” are topics in which a breakthrough could lead to massive transformational change in creating a world of abundant incomes for smallholder famers. XPRIZE is seeking amazing prize designs in these areas.

Access to Markets

One key Grand Challenge that will be crucial for exponentially lifting the income of farmers is access to markets. Smallholder farmers around the world need access to products, services, and markets to become more productive and profitable. Prize Designers targeting this Grand Challenge could think through “access” in a literal meaning of the word access—are there breakthroughs related to the logistics of moving crops to different sorts of buyers—or the more symbolic meaning. Can you design a prize that incents the creation of new solutions that allow smallholder farmers to connect with the same buyers and fetch the same prices that their larger industrial kin do? We expect prizes in this grand challenge to target the creation of new technologies as well as new business models and supply chains.

Affordable Technology

Another crucial Grand Challenge is the creation and distribution of affordable technology to smallholder farmers that currently don’t have access to the latest tech that industrial farms have access to in order do everything from planting to getting access to credit and financial markets. Prize designs in this area could focus both on trying to create technological breakthroughs that dramatically decrease the cost of key technology that smallholder farmers need to thrive or focus on prize designs that lead to supporting business models or other innovations that can make existing technology more affordable and accessible to smallholder farmers.

Most small farmers lack access to GMO's, with a majority of them not even knowing what GMO's are. It would be useful if people could explain the advantages of GMO's and also make them more affordable to the majority of farmers.

Asymmetric Information

Another key Grand Challenge that needs to be addressed is the asymmetric information situation that afflicts smallholder farmers. Specifically, they are plagued by the lack of information about everything from global market demand and prices for certain crops, to knowledge of the futures markets for different commodities, to long-term climate patterns and implications. Prize designs targeting these areas could include technological breakthroughs to allow smallholder farmers to get access to such crucial information or new forms of information distribution that are more inclusive for smallholder farmers.

Access to long term storage

Most farmers in Asia and Africa lack the resources to store their goods for long intervals, and hence sell their stock at dirt cheep prices because they have no other choice. Access to large storage units will allow many small farmers to store their goods for longer duration of time, and may allow them to sell their goods for the price the goods deserve, rather than the price they are forced to pay.

Interactions with the customers directly

Most farmers, in India at least, sell their goods into the market through middle men, who take the lion's share out of the earnings. While the prices of crops are exorbitant in the common men's market, the farmers are not paid a proportional amount for their hard work. Instead, the government, or any large private company can set standard prices, while this time the farmer gets the lion's share, and the middle men are done away with. This will help increase the income of the farmers substantially, and is being pushed by the Indian government.

(https://economictimes.indiatimes.com/news/economy/agriculture/modi-government-is-almost-ready-with-it-plan-to-create-an-amazon-for-agri-products/articleshow/62786252.cms.)

Root Causes

Definition

In this section we’re seeking your research on what the underlying reasons are that so many smallholder farmers continue to struggle with terribly low incomes? What are the natural, technological, social, environmental, political, and economic reasons these smallholder farmers haven’t been able to earn exponentially more?

Content

The Economist Paul Zane Pilzer presents that "The central equation of Economic Alchemy is W = P x Tn : Wealth = Physical Resources times Technology, and T (Technology) has an exponential multiplier effect on itself." This is a primary limiting factor for smallholder farmers working without technology; they have no multiplier potential. This is perpetuated in several ways, all listed above.

While not without it's critics, I found Clash of Civilizations and the Remaking of World Order a useful tool as I considered the impact of cultures, ideologies and traditions on solutions to the global grand challenge of food security.

There is an information packed story on the website ONE[1] titled "Food. Farming. Future: Breaking the Cycle of Malnutrition and Poverty". This story and data are from 2012, which again points to the longstanding attention, and inability to conquer this threat so far. We have made progress, but still, so many suffer!

Barriers to Progress

Definition

A barrier to progress is a systemic reason why a problem can’t be solved with current efforts or within current systems. In other words, this is about something larger than any one particular technology or approach succeeding or failing. What are the larger systems or forces that will prevent any approach from succeeding or which are dis-incentivizing solutions from even being created?

Content

One aspect of farming that traps it to linear advancement is that work in this field is usually passed from generation to generation. There have been a few massive advances (irrigation, fertilizers, etc), but even these brought a stp up, then a long flat road again.

For farmers working without technology, they are limited by their own physical abilities and hours in the day. The difference in ability to leverage between this farmer working with rudimentary tools and his hands, another farmer running a harvester like this is massive, and for both, the other is unthinkable.

From the 2012 One.org story, "Food. Farming. Future: Breaking the Cycle of Malnutrition and Poverty"

An additional layer of complexity for Lifting Farmers Out of Poverty is armed conflict and military actions. A paper available on Research Gate is titled Armed conflict distribution in global drylands through the lens of a typology of socio-ecological vulnerability includes statistics and information. This paper is dated (2014) but I think still useful to gain understanding. It has been said that the next wars will be fought over water and food, and I believe that to be true.

In the website Resources For The Future is another interesting paper published in 2017 that looked specifically at Risk Preferences and the Poverty Trap: A Look at Farm Technology Uptake amongst Smallholder Farmers in the Matzikama Municipality It lists several barriers to solution around risk aversion/resistance, and the need for a "minimum package of assets" to break through.

Some of the most abject poverty in the world is concentrated in farming communities. Many farm women, children and men depend on a precarious balance of multiple livelihoods, in which hunger is a daily fact of life and where access to basic services, education, health and water supplies is even more difficult than for the urban poor. Contrary to conventional wisdom, a majority of poor farm families live in areas with medium to high rainfall and significant agricultural development potential. Although there is also considerable poverty in dry and remote areas with low agricultural development potential, they support many fewer people than the more intensively farmed areas. Most commonly, the world's rural poor are concentrated in areas where population density is high and farms are small, growing food crops at a low-to-medium level of intensity. Often, off-farm income represents an important source of household livelihood. Rural poverty is often a product of poor infrastructure that hinders development and mobility. Rural areas tend to lack sufficient roads that would increase access to agricultural inputs and markets. Without roads, the rural poor are cut off from technological development and emerging markets in more urban areas. Poor infrastructure hinders communication, resulting in social isolation among the rural poor, many of whom have limited access to media and news outlets. Such isolation hinders integration with urban society and established markets, which could result in greater development and economic security. Moreover, poor or nonexistent irrigation systems threaten agricultural yields because of uncertainty in the supply of water for crop production. Many poor rural areas lack any irrigation to store or pump water, resulting in fewer crops, fewer days of employment and less productivity. Both a lack of roads and insufficient irrigation systems result in greater Work Intensity in many rural communities. Farmers and their families are members of the society in which they live. In any society there are strong pressures on its members to behave in certain ways. For the farmers, some of these pressures will come from within. In all societies there are accepted ways of doing things and these ways are directly related to the culture of the society. Farmers' attitudes and desires are influenced by their society's culture. If it is customary in a certain community for farmers to scatter seed and plough it into the soil, people will grow up to believe that that is the only correct way of planting. Even if the benefits of other methods are explained to them, their strongly held attitudes may make it difficult for to them change.

Yet not all of these pressures will come from the farmers' own attitudes and beliefs; some will come from other people. Any society expects its members to behave in certain ways. No one is seen by others as an isolated individual. Each person is seen as occupying a position in society, and each position carries expectations with it. In some communities, an unmarried man is expected to work on his father's farm; only when he marries will people expect him to start farming his own plot. A successful farmer may be expected to give food, money and shelter to relatives who have not been so successful, or to pay for his relatives' children to go to school. If a person resists these expectations, those around him will show their disapproval. Because most people like to feel acceptance and approval from those around them, they tend to behave in accordance with such expectations.

Existing Efforts to Address the Problem

Definition

The goal of this section is to understand what other efforts are already underway to address the exponentially increasing incomes for smallholder farmers. Please be sure to focus on the who, what, when, and why.

Who is developing solutions to a similar problem (which innovators, academics, corporations)? What solutions are they developing? When were these solutions tried or when might they be ready by? Why did the people pursuing them take this particular tack? The hope is that by understanding existing efforts, we can see where there are gaps, or holes, in current efforts that might be targeted with a prize. 

Content

Access to Markets

There are several organizations offering microloans or microcredit, which get access to loans, savings, and insurance to individuals that do not have access to traditional sources like banks. Tala offers solutions for credit to customers with no credit history in countries like Mexico, Philippines, Kenya, and Tanzania. Rang De is a non-profit organization working in India that offers an online crowd funding platform for under-served people and communities. In 2016 there were 123 million customers at microfinance institutions worldwide with a loan portfolio of $102 billion[2]. Approximately 60% of borrowers were from rural areas, and 84% were women[2].

Affordable Technology

The market for used smartphones is expanding in developing countries, with one study projecting global revenue to reach $38.9 billion, up from $19.7 billion in 2017[3]. India has a massive demand for used smartphones, with an estimated 20 million used devices currently in circulation[4]. Consumers that place higher value on price and brand than on the age of the device can pay between $138 - $153 USD for a smartphone that is 2 to 3 years old[5].

A key point about technology adoption was made in a study out of India regarding rice farmers, and it found, among many discoveries, the following:"With awareness and aspiration in place, what are the factors that inhibit technology adoption? We compiled a list of possible inhibitors in this context. The set of constraints are given below in Table 18.5, any number of which could be working in combination. Results on the farmers’ responses regarding the bind of different constraints in adoption of technologies in rice are presented below."[6]

Constraints in technology adoption in rice.

A recent article by HBR revealed a few potential solutions currently being deployed in Africa to solve issues related to farming, especially with regards to increasing productivity in the face of climate change. HBR defines the current situation as so: "Those that do look to leverage new technologies run into financial issues. Foreign-made farm technologies remain unappealing to farmers in Africa because they are cumbersome for those who control, on average, 1.6 hectares of farmland. What’s more, less than 1% of commercial lending goes into agriculture (usually to the few large-scale farmers), so smaller farms cannot acquire such expensive tools.

But this is about to change. African entrepreneurs are now interested in how farmers work and how they can help improve yields. The barrier of entry into farming technology has dropped, as cloud computing, computing systems, connectivity, open-source software, and other digital tools have become increasingly affordable and accessible. Entrepreneurs can now deliver solutions to small-size African farms at cost models that farmers can afford."[7]

Furthermore, the article goes on to list a few companies bringing new and creative solutions to the market to help make typically expensive solutions more accessible and affordable for farmers. A few of these include:

  • Zenvus is a Nigerian precision farming startup, measures and analyzes soil data like temperature, nutrients, and vegetative health to help farmers apply the right fertilizer and optimally irrigate their farms. The process improves farm productivity and reduces input waste by using analytics to facilitate data-driven farming practices for small-scale farmers. [7]
  • UjuziKilimo, a Kenyan startup, uses big data and analytic capabilities to transform farmers into a knowledge-based community, with the goal of improving productivity through precision insights. This helps to adjust irrigation and determine the needs of individual plants.[7]
  • SunCulture, which sells drip irrigation kits that use solar energy to pump water from any source, has made irrigation affordable.[7]
  • FarmDrive, a Kenyan enterprise, connects unbanked and underserved smallholder farmers to credit, while helping financial institutions cost-effectively increase their agricultural loan portfolios. [7]
  • Kenyan startup M-Farm and Cameroon’s AgroSpaces provide pricing data to remove price asymmetry between farmers and buyers, making it possible for farmers to earn more.[7]
  • Ghana-based Farmerline and AgroCenta deploy mobile and web technologies that bring farming advice, weather forecasts, market information, and financial tips to farmers, who are traditionally out of reach, due to barriers in connectivity, literacy, or language. [7]
  • Sokopepe uses SMS and web tools to offer market information and farm record management services to farmers.[7]

Asymmetric Information

More than half of the world's population still does not have access to the internet[8], and so expanding the availability of online connectivity is important for democratizing information. Some of the largest technology companies in the world are all working to deliver solutions for a global satellite internet, including SpaceX, Google, Boeing, Samsung, OneWeb, and Facebook. SpaceX has proceeded with a plan known as Starlink to build a constellation of 12,000 satellites that use microwaves to bring internet connectivity to everywhere on the planet. OneWeb has a similar approach to global connectivity by using a constellation of satellites, although with their equipment in lower orbit which would translate to higher internet speeds. Google has a plan known as Project Loon to use high-altitude, solar powered hot air balloons to transmit signals across the globe. The plan from Facebook is to use solar powered, unmanned drones that beam wifi to the ground underneath and can fly for three months at a time.

Integrated agriculture programs to address malnutrition in northern Malawi, a case study. The abstract from this paper says "In countries where the majority of undernourished people are smallholder farmers, there has been interest in agricultural interventions to improve nutritional outcomes. Addressing gender inequality, however, is a key mechanism by which agriculture can improve nutrition, since women often play a crucial role in farming, food processing and child care, but have limited decision-making and control over agricultural resources. This study examines the approaches by which gender equity in agrarian, resource-poor settings can be improved using a case study in Malawi." An excellent XPRIZE to Lift Farmers Out of Poverty will insure that barriers to entry are set as low as possible to allow those most marginalized access. Leveraging other programs advancing the UN Sustainable Development Goals will be a pathway to build a diverse competition base, and insure maximized impact independent of a winner.

World Health Organization work has been done on Developing effective food and nutrition policies and programmes Again, there will be useful tools and guidance found here when designing an excellent XPRIZE competition.

Community Health and Nutrition Programs are reviewed in this paper published by the The National Center for Biotechnology Information (NCBI). Alleviation of the burden of disease, including reduced healthcare costs can be a potential pathway to lift farmers out of poverty in the developing world by showing that investments to support primary production (economic and educationally) can pay tremendous indirect dividends. Generally for the whole world, understanding the food/health correlations honestly (objectively through sensors and machine learning will best break through) will allow all people everywhere to make better decisions. Technology is exposing more and more that the wrong food, even if it is cheap to buy, can be tragically expensive!

The Food and Agriculture Organization of the United Nations (FAO) has a posting on their website, Agricultural Development Economics - Smallholder family farms that highlights the FAO’s role in small family farms. There are several resource papers linked on this page. Of particular interest for this competition design is The economic lives of smallholder farmers An analysis based on household data from nine countries Still with FAO, the headline story on the web page today is Transforming food systems How partnerships are the way forward in tackling global challenges. This is applicable to both Lifting Farmers and Feeding the Next Billion.

Slide deck from discussion at Carnegie Endowment for International Peace April 8, 2009, called "How Can We Best Support Smallholder Farmers for Poverty Reduction?" posted on Slideshare. Being able to look back will help us move forward, and we can see what was said, and was done.

Another presentation on Slideshare titled "The contribution of smallholder farmers to the Agenda 2030" This presentation touches on and provides statistics on many aspects that must be addresses in solutions for Lifting Farmers out of Poverty. Full presentation title is "The contribution of smallholder farmers to the Agenda 2030 Wafaa El Khoury Lead Technical Specialist, Policy and Technical Advisory Division, IFAD Soils and pulses: symbiosis for life - A contribution to the 2030 Agenda 19 April 2016 – Rome, FAO"

Posted on the Sustainable Food Lab website is a paper titled "Enabling Smallholder Farmers to Improve Their Incomes" will be showcased at the Business Fights Poverty events during the UN General Assembly week in New York, Sep 18-21. It is the lead-up to the launch of the Business Fights PovertyIncome Challenge[9].

Ecosystem

Other prizes in the area

What prizes have already been launched in this space? Please clearly state who is who is sponsoring the prize, what it’s goals and timeline are, and the size of the prize purse.

In process of launching now, part of The Global Climate Action Summit is the The 30X30 Forests, Food and Land Challenge. This may be overall more applicable to the Feeding the Next Billion Challenge design, but has touchpoints of value for this one also.

Also about to launch is the joint effort from Sustainable Food Lab and Business Fights Poverty Income Challenge. Anyone can sign up for information as it comes available; that is the current stage.

A few years back, Howard Buffett launched a book and incentive prize competition around the concept of "40 chances," alluding to the idea farmers have about 40 different seasons in their life to grow a crop, which is similar to us as individuals to make a difference. The prize was called 40 Chances and has since been turned into an opportunity to provide seed grants to university students.

The Thought For Food Foundation launches a yearly $10k+ incentive prize competition seeking solutions to help feed 9 billion people by 2050. Originally intended for university students, it has since grown.

Foundations and organizations already active in these spaces

Who are the major players that are already active in these spaces?

To my knowledge, the best source of solutions in play today would be the Consultative Group on International Agricultural Research (CGIAR) From their website they have 15 Research Centres, 3000+ partners in 70 countries, and 50 years of experience.

Another is the Global Forum for Innovations in Agriculture (GFIA) Groups like CGIAR and many others have a presence at GFIA.

The University of California, Davis and Wagieningen University (Netherlands) are the top agricultural universities in the world, with leading research arms in both emerging and developed countries.

Potential Funders

What are the groups or individuals that are already funding, or might be willing to fund efforts in this space?

I would suggest looking at the Funders page for CGIAR as a place to start. Bill Gates had this to say about CGIAR. Investing in Agriculture: Bill Gates Highlights Value of CGIAR

The United Nations would be, in my opinion, the place to go to find the sponsors for this challenge. This 2013 story in UN News titled Investing in small-scale farmers can help lift over 1 billion people out of poverty – UN report shows their level of awareness, and that this is an ongoing threat that will only intensify with the current global trends.

World Wildlife Fund is another option as they have several programs in motion around food, and clearly see the threat of food production on environmental conservation. See Project X Global, The Markets Institute and The 30X30 Forests, Food and Land Challenge

Large agribusiness has some stake in seeing small holder farmers lifted out of poverty, and may be a potential funder. Examples of industry activity include Syngenta with the Good Growth Plan, Bayer Crop Sciences, and Cargill.

The Howard G. Buffett Foundation, which is run by Howard Buffett--the agriculturalist son of wealthy investor Warren Buffett, is heavily involved in agriculture and could serve as a potential funder for this prize.

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