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Growing Businesses in African Soil

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This is the first in a series of comments I will make about agricultural development in the developing world.

The buzz these days about sub-Saharan Africa is that it's becoming cool to care what happens there. Out of a hodgepodge of dictators, civil wars, droughts, and corruption, is emerging one democratically elected government after the other. Peace treaties, sometimes tenuous, are breaking out all over. Trade missions abound from western countries, each holding the promise of new capital investments. And, to cap off this new cache, we now have an American president using his bully pulpit to inject life into a dramatic policy shift that could infuse the continent with billions of US dollars for training, equipment, guidance, seeds, fertilizer, and access to markets: Agricultural development.

The importance of agriculture in the evolution of Africa's economy cannot be overstated. With so much energy expended by Africans simply trying to feed themselves to keep from starving there is precious little time or energy for economic development. When you sap the strength of a people struggling to stay alive it's difficult to think in terms of economic expansion.

Obama's Dramatic Announcement
At the G-8 meeting in July at L'Aquila, Italy President Obama committed $3.5 billion over three years -- subject to Congressional approval -- to renew American leadership in the effort to end global hunger and poverty. Here is a link to his statement: http://www.whitehouse.gov/the_press_office/Food-Security-Investing-in-Agricultural-Development-to-Reduce-Hunger-and-Poverty/. It shook up aid organizations worldwide because this marked a shift from public policy that had existed since the 1980s when western governments decided it would be better to create jobs in urban areas and let people buy food than to keep spending money to help them grow their own food. This policy proved disastrously misguided. The effect was people starving in the cities without either jobs or food exacerbated by people starving in the countryside because of the collapse in developmental agricultural aid.

Clearly there's a lot of news these days and this policy change only adds to the clutter. But so little attention has been paid to it that the risk is high of the moment passing into history without creating the political will necessary to insure its funding. The implications are mind boggling. Failure to execute Obama's $3.5 billion pledge will jeopardize the lives of hundreds of millions of Africans.

Emergency Aid versus Developmental Aid
On the socially responsible side is concern for the lives of these people who exist at "the base of the pyramid" (BOP). There are agencies and NGOs which deal with that problem every minute of every day. The UN World Food Programme, for instance, delivers 90% of its food to people who will die by tomorrow if they aren't fed today. But that is emergency aid and what the president's initiative addresses is developmental aid. Emergency aid takes on a life of its own in the minds of well-meaning people who contribute to disaster relief out a sense of humanity. Developmental aid depends on completely different impulses and exists as the result of a dramatically different skill set.

Emergency aid is simple: Victims of a tsunami need food, clothing and medical supplies now, so well meaning people reach deep and feel good when they see aid workers rushing pallets of relief supplies to the disaster site. Developmental aid has to work its way through Congressional committees and then, with the dollars that survive in competition with every other worthy cause that passes through Congress, it takes years to build out the programs before measuring results. Developmental aid requires political will that has to transcend election cycles; emergency aid funded today can be delivered tomorrow.

Who says we're all connected to the poor?
But, there is a dirty little secret about developmental aid that is considered unseemly to discuss in polite society. We can make money off these people. We can prosper by making them self-sufficient. If we only elevate the BOP to a level of self-sufficiency by providing them with better seeds and training that produce greater yields, we can re-allocate that next $3.5 billion to our own infrastructure, schools and hospitals. But, even better than that, if we can just get them and their countrymen a bit higher on the socio-economic ladder we can sell them our stuff.

People who don't have to spend all of their time making food to stay alive become more productive in other ways that create disposable income. They start to demand things like education, health care, shoes, and more sophisticated farm equipment. We can supply all those needs. Certainly we will have to compete with every other country in the world but, who is better at Yankee ingenuity than Yankees?

Looking out for Number One
Entrepreneurship is as American as Alexander Hamilton. We love nothing better in business than to shift paradigms, to embrace risk as though it were the palm of Adam Smith's invisible hand. It's in our own self-interest to jump start agricultural development with the goal of creating markets for ourselves. Public/private partnerships should be crawling all over this opportunity, but barely a word has been written outside of the trade papers.

I'm going to change that.