Time moves in an eye blink. It was only 30 years ago that the Hubble Telescope was launched, the US and allies went to war with Iraq in Desert Storm and the world wide web was launched. In the next three decades, experts predict the world population explosion will have reached nine plus billion people, with only sufficient year-around, usable water for a third of that number. This is what keeps Dr. Ku McMahan awake at night, the USAID lead on the Securing Water for Food (SWFF) program, a project also backed by the Dutch, South Africa and Sweden.
Over the last five years, it has been SWFF’s mission to produce more food with less water through unique program funding and by giving technical assistance to agriculture innovators around the world. The innovators, who were chosen after an extremely competitive contest, have developed advances in irrigation techniques, region specific weather forecasting, saline resistant seeds, and co-composting, among other strides.
“Innovators are working day and night to solve these problems, and we are offering strategic direction seeking outside investment,” said McMahan. He became involved in SWFF as a co-founder seven years ago.
What it boils down to is this: They are already convinced about the need. We just have to bring them qualified, verified, and dependable enterprises who have clear plans for growth…
“My job, along with my colleagues, is to find solutions to problems that often perplex us,but do not confound or discourage us,” added McMahan, who works in USAID’s Washington, DC office but is often on the road to far-flung areas meeting with innovators and partners.
The SWFF program has had an impressive track record of success for increasing agricultural yields using less water while also emphasizing gender equality and providing hope for farmers at the base of the economic pyramid. However, said McMahan, as successful as the program was, it didn’t go far enough.
“We found a crucial investment component was missing, as well as the need to create regional hubs in frontier markets to deal with issues at the source,” he said. Hence, a new program, Water and Energy for Food (WE4F) was born.
“A US politician, the late House Speaker Tip O’Neill, was noted for saying: “All politics is local.” The same is largely true for development work in frontier markets such as sub-Saharan Africa, India, Southeast Asia, and elsewhere,” said McMahan.
The primary question, however, is how does one persuade investors to gamble in far-flung rural markets where margins might be thin? “Sustainability in these markets is one thing, but scalability for enterprises is a somewhat higher hurdle, sometimes requiring substantial investment from non-government institutions,” explained the USAID official. “It is not simply a case of ‘Field of Dreams’ where if you ‘build it, they will come’” However, McMahan and his colleagues have found it is also not a difficult sell to the socially aware investor as long as the case is made by a viable enterprise which is backed by a solid business plan and due diligence.
It is the assignment of WE4F to search out and find the right investor match. At the same time, the program’s regional hubs are technically aiding and readying the companies for investment. “There are a lot of opportunities out there, both for the enterprises and for investors. They can make a significant contribution to the food value chain from production, processing, and distribution to expanding access to quality food,” said McMahan.
McMahan believes that if the new program can motivate new investors and, at the same time, bring in new actors from different angles, a valuable contribution can be made toward its goal of actually having the program sustain itself with a little help. The UN predicts that the world’s population will reach nearly 10 billion people by the year 2050, which means it will virtually have doubled since 1990. By stressing regional hubs and outside financing, WE4F is taking a calculated risk. However, McMahan said these were vital components missing from the earlier program.
“We found that our innovators didn’t have the working capital to grow and expand because their capital was locked up, having to wait until after harvesting so farmers could pay for services. It was important that we discover a way to offload that credit from innovators to third parties,” said McMahan. Many global businesses today recognize the need for investment in agriculture and investment in renewables and sustainable energy and water efficiency. The amount of water on the planet isn’t changing, but the amount of usable water is.
As a result, these global investors are looking for new places to put their money. They all recognize that their business models depend on having a clear-sighted vision of the future that includes frontier markets. “The challenge for enterprises is searching out the investors, and that is where WE4F comes in. At this time, most socially-minded investors are in larger, industrial markets and not based in emerging economy markets,” added McMahan. “Investors have to be careful in working in unfamiliar markets and need local partners who understand the local economic, political, and social environment. They have to be aware of gyration in currency and possible civic turmoil issues. All of these things make them hesitant and more diligent.”
However, McMahan said he has been encouraged.
In recent months he noted that he had met with at least 15 investors. “They have told me they would love to work in these markets if the funding agencies can provide first loss capital to mitigate some of the risks. “What it boils down to is this: They are already convinced about the need. We just have to bring them qualified, verified, and dependable enterprises who have clear plans for growth,” he added.
The clock is clicking toward 2050.
USAID, Sweden through the Swedish International Development Cooperation Agency (Sida), and the Governments of The Netherlands and South Africa invested $34 million in Securing Water for Food (SWFF) to promote science and technology solutions that enable the production of more food with less water and/or make more water available for food production, processing, and distribution.
This story was developed through the SWFF Social Impact Storytelling Initiative which was established to document innovator journeys and social impact as they work to improve the way water is being used for agriculture. #socialimpact #innovation #agriculture #water