Gates Foundation backs U.N. program linking big buyer, small farmers

Using new market mechanisms to address poverty, the Bill & Melinda Gates Foundation is supporting an effort to link one of the world's largest food buyers with the world's smallest farmers.

The plan was unveiled Wednesday in New York during the United Nations General Assembly, where the global food crisis is taking center stage. Bill Gates, co-chairman of the Gates Foundation, joined U.N. World Food Program (WFP) Executive Director Josette Sheeran and leaders of three African nations to launch the plan, called Purchase for Progress (P4P). Gates is also expected to give an address at the U.N. today on the Millennium Development Goals to reduce poverty and disease by 2015.

The Gates Foundation and the Howard G. Buffett Foundation are working with the U.N. food program to transform the way the world's largest humanitarian organization purchases food in developing countries.

The idea is to bring hundreds of thousands of small farmers in Africa and Latin America into the market as suppliers to the U.N.'s food program. The WFP provides food for 90 million people in 80 countries and has a budget of nearly $3 billion this year. The United States is its largest donor.

The WFP "is the only agency in the world that has trucks and planes and people on the ground that can buy such large amounts of food locally and deliver somewhere else," said Howard Buffett, eldest son of billionaire investor Warren Buffett.

Last year WPF spent $612 million purchasing food from developing countries, about 80 percent of its total purchases. But not enough of that has come from small farmers, Buffett said.

Many small farmers must sell surplus food after harvest at the first opportunity, often for low prices because they lack market information. The P4P program will guarantee a market for one to three years, removing some of that risk. Buying will be closer to farm production, removing logistics costs and markups passed on by middlemen.

"The closer farm production is to the commercial market, the higher price buyers will pay for that food," said David Stevenson, WFP's director of policy, planning and strategy. "We're going to be buying closer to distribution points."

The two foundations, together with the government of Belgium, have committed $76 million to the new program. It will be launched in 21 pilot countries over the next five years, and expects to significantly increase the income of at least 350,000 farmers in those nations.

The Gates Foundation contributed $66 million for pilot projects in 10 countries in Africa, and the Buffett Foundation committed $9.1 million for pilot projects in seven countries. Belgium contributed $750,000 for the project in the Democratic Republic of Congo, its former colony.

"Developing new ways for WFP to purchase food locally represents a major step toward sustainable change that could eventually benefit millions of poor rural households in sub-Saharan Africa and other regions," Gates said.

The Gates Foundation has spent $900 million on agricultural-development efforts, focusing on small farmers in Africa and South Asia. The foundation helped launch the Alliance for a Green Revolution in Africa, aimed at increasing agricultural productivity by introducing improved fertilizer, seeds, training and other support.

The P4P food-purchasing program addresses the other side of the equation.

"We can all work on the production or supply side, but without something to pull that through to the market, we'll never be successful," Buffett said.

Most of the poorest people in the world live in rural areas and rely on farming to feed themselves and earn income. Skyrocketing food and fuel prices, climate change, natural disasters and war have pushed many who already were in a fragile situation to the breaking point, said Sheeran, WFP executive director.

"The world's poor are reeling under the impact of high food and fuel prices, and buying food assistance from developing world farmers is the right solution at the right time," she said.

Kristi Heim: 206-464-2718