Bill Gates recently announced his foundation will give $66 million to a UN program that takes a new approach to fighting hunger. Under this program — which also drew a $9.1 million gift from Warren Buffett’s son, Howard — the countries that typically receive food aid will now become the suppliers of that food.
Here’s how the program, called Purchase for Progress, works: The World Food Programme uses its sizable buying power to guarantee purchase of crops from the local farmers of countries that typically receive food aid. In addition to these purchase guarantees, farmers receive better farming methods, higher-yield seeds, storage for crops, and help to transport produce to markets. Farmers can then use this guarantee as collateral to borrow from local banks. With these loans, farmers can buy better equipment, hire employees, and use more advanced technology to improve what they grow. The produce is supplied to the hungry within the same region the food is grown, which allows for the capital to remain in the local economy.
WFP recently signed the program’s first contract with a cooperative of 9,500 farmers in northern Mozambique. It guarantees purchase of cowpeas from local farms — cowpeas that in previous harvests had gone unsold. The arrangement gives farmers an incentive to invest in their operations, because they’re assured of a buyer for their harvest.
The WFP’s website tells the story of one farmer who made about US$50 by selling his cowpea surplus to the agency: “I used the money to buy school things for my children, dishes and clothes for my family and even some tools to improve my house,” said the farmer, Alfredo Muarapaz.
The Government of Mozambique’s support of this project has played an important role in its success, according to WFP spokesperson Jennifer Parmelee. Getting this same level of government support may be a challenge in the 20 other countries the program will operate in.
This new approach to curbing hunger comes at a good time. With the rising cost of fuel, a main component of fertilizer, the resources that farmers need are becoming increasingly expensive and scarce.
Let’s hope that the program’s success continues — and that Howard and Bill get their friends to donate, too.