Our emerging approach to agricultural development October 18, 2006 Rajiv Shah, MD Director, Agricultural Development Bill and Melinda Gates Foundation

Who We Are Bill and Melinda Gates believe every life has equal value. In 2000, they created the Bill & Melinda Gates Foundation to help reduce inequities in the United States and around the world. - All lives—no matter where they are being led—have equal value. - To whom much has been given, much is expected. Two values lie at the core of the foundation’s work:

Foundation History, Results, and Learning 1 million children's lives saved by GAVI immunization effort 12,911 scholarships supported to date 48,000 HIV+ patients in Botswana receiving treatment through ACHAP 4.2 million condoms distributed by Avahan in India 1,123 new, affordable housing units due to Sound Families Initiative Select Results: Grant making To Date: Core Challenges: Strategic risk taking Role of partnerships Learning through successes and through failures

Our Approach to Agricultural Development Our strategy: - Focus on a target market - Strategic initiatives - Data, policy and advocacy - Market access - Input utilization - Science and technology - Build partnerships for scale and success - Invest, measure, learn and recalibrate - Share results and listen to outside voices - Initial observations - Development - Inequity - Lessons learned - Science and technology - Perspective of the small farmer - Rural development - Our approach - The problem - Initial strategy - Vision of success

Target Market: The state of undernourishment today Undernourishment: Defined as “consuming too little food to maintain normal levels of activity” (WDI 2006). According to FAO undernourishment occurs at calorie consumption below 1,900 calories a day. Map is based on WDI 2006 and United Nations Populations Prospects Database (2004 Revision) Underlying population data represents 2005; undernourishment data represents Approximate number of undernourished in developing world: 0.83 billion

Target Market: Many key trends are not moving in the right direction Maize yield (Hg/Ha) World South Asia Sub-Saharan North America CAGR = 2.13% CAGR = 2.15% CAGR = 1.60% CAGR = 0.7% - Over the last 15 years the number of Africans living below the poverty line ($1/day) has increased by 50% - It is estimated that almost 200 million people in Africa, or over one-third of the population, suffers from hunger - In the past five years alone, the number of underweight children in Africa has risen by approximately 12% (IFPRI, 2005) Crop yields and agricultural output in SSA is not keeping up with population growth or productivity in other parts of the world.

Example: Promoting Access to Markets Goal: Demonstrate scaleable models of improving small holder farmer access to markets in order to double 2005 adoption rates of improved technologies and improve farm income and household welfare Early activities: - RFP issued concept notes reviewed Early thinking on strategy: - Both demand and supply- driven strategies are needed - Farmers need access to relevant information and local exchanges - Unique approach at each market level: local, province, nation, region, OECD - Must be responsive to each unique environment

Example: Develop and improve the utilization of new input technologies Crop improvement Create improved crop varieties suitable for the drought, disease, insect and soil fertility stresses of Africa and Asia in order to double attainable yield in selected key crops Distribution channels Invest in seed multiplication and distribution strategies

Example: Program for Africa’s Seed Systems ActivityExpected Results Breeding crops for Africa improved crop varieties in 5 years - Variety gap closed in 15 years Training breeders - Training 50 PhD and 179 MSc crop scientists Improving seed production and distribution - Small-medium sized seed companies distributing improved seed to farmers through 20,000 trained and certified agro-dealers - Improved seed planted on more than 1 million hectares, roughly 80% of produced by small-medium seed companies - Supporting public extension as appropriate Improving seed system policies - Alleviating bottlenecks such as licensing and regulatory approval - Advocating for change Monitoring and evaluating impact - 50% increase in land area cultivated with improved seed, leading to lower risk and 30% higher yields - Quantify impact on poverty and hunger Genomics Gene Banks Global Breeding Local Variety Breeding Foundation Seed Public Channels Private Channels Planting Harvest Public Sector/ NGA Distribution Bulk-up Quality Control Packaging Government Registration Multiplication Private Sector Registration Multiplication SME Bulk-up Quality Control Packaging SME Marketing Distribution

Building an integrated approach for Africa AFRICAN GREEN REVOLUTION ALLIANCE (AGRA) Major Initiatives Develop effective seed system (PASS) Improve use of other inputs: fertilizer and irrigation Agricultural education & training Link farmers to improved and equitable output markets (at scale) Policy and political advocacy/support (ongoing) Build capacity to be results-oriented, and begin to show impact Build key political and operational stakeholder support Attract major public and private financing to scale and sustain renewed African Green Revolution Major initiatives Advocacy Strategy

Early Learnings and Key Questions Early LearningsKey Questions Strategic focus and willingness to take risks will be key to our learning and impact Correct strategic focus? Who are the best strategic partners? Strong advocacy is necessary so others play the roles required for success What is the appropriate role for others (business, governments, donors, etc)? An input strategy must be led by a market demand strategy What are the best ways to link farmers to markets without increasing their risk? Complimentary inputs (seed, water, fertilizer) are critical What is the appropriate business model for developing and delivering key inputs? Crop science offers great promiseWhat are the most effective ways to invest in product development?