Advancing Sustainable Agriculture in Africa - Donnie Smith, Tyson Foods Former CEO

 

"I will spend the rest of my life dealing with Sustainable Agriculture in Africa..." Donnie Smith, Former Tyson Foods CEO

Over the years I have had many incredible global thinkers speak about their impact projects on the Trade with Africa Business Summit Platform. One of such speakers is Donnie Smith, Former Tyson Foods CEO and Founder of the Africa Sustainable Agriculture Project (ASAP)

As we are now only days away from the 4th edition of this great Summit I wanted to share with you his presentation on the Why and How of Advancing Sustainable Agriculture in Africa from a previous edition.

The knowledge he shared with those who attended remains evergreen. Watch it below with transcript and also register today to join for the next edition here www.twasummit.com. (2021 Confirmed Speaker information and Agenda continue to be updated daily on the site. Check it out today)

TRANSCRIPT

Toyin Umesiri: The next speaker within this community requires no introduction. But for the traveling delegates people around the world, Donnie is the former CEO for Tyson Foods. Donnie worked with Tyson for 36 years and he rose through the ranks as CEO. But beyond just your leadership at Tyson Foods I actually want to say within the community you are absolutely loved. You're connected to the community. You are well respected and even in my own personal interaction you're so gracious. You're absolutely gracious and please (clapping) - I have stories real stories of me almost - actually I got late super late to a meeting with Donnie like 15 minutes past late there's another story there - but I mean thank you - I want to be a leader like you Donnie. Thank you so much for your humility. Your servant leadership being an example in faith, in action. Thank you and with that please join me in welcoming Donnie Smith to the stage.

Donnie Smith: Thank you! So I'm going to spend about the next 30 minutes or so talking about the work we're doing in Africa. I want to talk a little bit about the "Why?" first. Then I want to talk about the "What". So, here's the "why?". In 1980 – let’s just call this 1980 I graduated from the University of Tennessee with the BS in Animal Science. In that year there were about 5 billion people on this planet and according to FAO data we produced about 2.4 trillion metric tons of food on this planet. Okay? So now let's fast-forward through a 36-year career in the food business; It's 2017-18. Today there's about 7 billion people on this planet and we produce about 4.5-ish trillion metric tons of food.

So, in my working career, call that this generation, we've added 2 billion people to the planet and we've doubled the amount of food production on the planet to feed those two billion people. Ok. But let's think forward. Let's go from now to 2050. So in 2050 there will be somewhere around 9 billion people on this planet, And so if we had to add about 2.1 to 2.2 trillion metric tons of food production to feed 2 billion people from 1980 to present day - what will we have to do from present day to 2050? Another 2.2? No.

Of the two billion people that will populate this planet between present day and 2050 half of that will be on the continent of Africa.

It has already been mentioned so far today Rwanda's infant mortality rate is equal to the US. Infant mortality rates in Africa and in other parts of the world are improving dramatically and during this period of time infant mortality rates were dismal. So, the calories per person #1 people didn't live this long and #2 the calories per person were much lower. So, to double - to add 2 billion more people on this planet we're going to have to practically double food production from 4.5 trillion metric tons to 9. Same water, same air, same landmass. Huge problem. 

Of the two billion people that will populate this planet between present day and 2050 half of that will be on the continent of Africa. Incomes will continue to improve, infant mortality rates will continue to improve and we've got a huge need for Agricultural Development and Research in Africa.

You know as Scott was talking it's just amazing the amount of progress that's been made in household incomes in the coffee business with small holder farmers and millions of them around East Africa and other parts of Africa. And that story can be true in a lot of verticals. Think about this; today here in the US, we spend probably less than 7% certainly less than 10% of our disposable income on food. Think about what think about the economic development that that frees up in terms of oh I don't know National Security? But now let's get to Africa where it is not at all uncommon for many African countries to have an average population spending 40 maybe 50% of their income on food and that's the average population. Think about the base of the economic pyramid.

We deal with farmers that are subsistence farmers that spend 60, 70, 80 plus percent of any money they make just to be able to feed themselves. What if what if they could be positioned to where they would spend less than 20% of their household income on food? How much Economic Development would that spur? Wow! Now that's a lofty effort I've spent 36 years in the food business I will spend the rest of my life dealing with sustainable agriculture in Africa, because it's critical to what will happen in the next 35 or 40 years.

Let me tell you a little bit about what we do. So back in about 2012 Dale Dawson and I had lunch and Jenise Huffman who's sitting right back here had begun to work in Africa to support sustainable agriculture particularly table eggs to support an organization called oneegg.org.

I don’t know if you know one egg org. But the mission of one egg is to get one egg a day in the mouths of preschool kids and you would be amazed at what just that much protein - 7 grams may be in an egg - what that much protein will do to the cognitive and physical development of these children as they enter their school years. And so with the support of Tyson and CobbVantress we began this work in in Africa to support a farm that would become sustainable over time that would that would grow these chickens have these eggs and provide them to oneegg.org. That farm is now a part of Zamora which is a business that we operate in Rwanda.

Now back to the conversation with Dale so I'm having this conversation with Dale and I want to do some demonstration farms and help farmers to understand better agronomic practices and that kind of thing and he said well we you know I'm involved with the group of folks that have a agriculture business and I want to tell you Donnie a big problem is feed. And it by the way it was mentioned earlier today right and he said don't you have some feed in your background? So yeah I ran a couple feed mills for the company back in the early days. He said who knows what God might be doing.

So I took a trip with him sat down with the Minister of Agriculture told her about my dream of having demonstration farms and frankly she kind of rolled her eyes and said I got demonstration farms all over this country. So what do you need? I need a feed mill. Ok I'll build you a feed mill. So before I left we're having dinner at this big table and I get back home and Gary Michaelson in our Communications Group comes to see me and he says Donnie I want you to read this blog. And there was some guy in the restaurant called heaven there's some guy at heaven overhearing our conversation who basically said “can you believe that not only does this greedy guy he can't make enough money now he's going to go to Africa and make money off the backs of poor Rwandan.”

So that's encouraging when you're trying to do good for the world right? So Terry and I talked and we said you know what we'll start a foundation and we'll put all of our businesses in Rwanda in this foundation and nobody will ever say I'm trying to get rich off poor Rwandan, because I won't we won't we won't get a dime of economic benefit for what we do. So that's what we did we formed the African sustainable Agriculture Project (ASAP). And you know as the at the time I was a CEO of Tyson and I really didn't want people thinking that you know number one I'm spreading the wings of Tyson's into Rwanda. I just want to help people and the Rwandans they you know like many other African countries great people, good resources, need opportunity.

So, we formed African sustainable agriculture project ASAP foundation and off we went. And in 2014 I think it was about October we opened the first commercial feed mill in the nation of Rwanda. Now to get a picture Rwanda is about the size of Northwest Arkansas with about 12 million people. Now those of us who kind of grew up in the country and know what it's like to go to the co-op and buy a bag of feed imagine no co-op, no commercial feed. And you know it's interesting God puts this great potential into the genetics of these animals but the you know it's sort of like you know a Formula One race car if you're if you're pouring kerosene it's not going to run very well right. And so you need well mixed well formulated feed in order for that animal in which God puts all this genetic potential to be able to fulfill its potential and to do what God created it to do. And so as we looked at the poultry value chain the first limiting factor in the process was feed mill. So we okay solved that problem.

Now Rwanda has plenty of feeding capacity. So not long after that we absorbed what was then called ____ farms now it's the ____ farms so we have an egg farm. But we always had this idea that you know we could help reach a lot of farmers at the very base of the pyramid with broiler chickens the chickens that we eat. So with the help of USAID and by the way Americans thank you very much for your help. So with the help of USAID we began a project ___which in Rwanda means let's raise chickens for profit.

So, we started this project. And as simple as it is - on about the area of this stage we will go on to a small holders farm - by the way a lot of the smallholder farmers that we work with this is about the size of the yard that they have to work with. Very very small plot of land. So you need to concentrate the agriculture on that land right. So with a very small plot of land we put about a 100 chickens in this area and we grow them about 6 weeks.

Now what we do is we supply the capital to build the coop to keep them safe. Right and we provide them the equipment they need to feed their chickens. And in about 6 weeks we've got a broiler ready for market; we help them market their Broilers and they get about 3 years to pay the coop back. And then we help them with microfinance so that they can they can take care of the reoccurring cost the charcoal to heat the chickens, the feed, the chicks themselves - that sort of thing.

And still how are we doing? We have about a hundred and twenty growers in the program now. We bring them in to a demonstration farm where basically we have 10 of these coops in a u-shape and we can walk them through - here's what it needs to look like the day before you get chickens. And then here's what a here's what a coop full of day-old chicks looks like. And here's what a coop of chickens that are one week old, two week old, three, four, five, six, clean-out, get ready again. And so in about three or four days we can bring growers in and teach them everything they need to know about how to be successful.

Now to get a picture of some of the growers that we're working with, the average grower in the rural areas in Rwanda - the average person in rural Rwanda the household size is about 5.2. The average household income household income 27 dollars a month. You stopped by the convenience store and get a coke on the way into the conference this morning? I spent about a buck and a half doing that right? That's a day and a half maybe almost two days’ worth of income for the growers that we work with. But with the little help on the capital side, a lot of help on understanding how to create a new business, we've been able to see growers like Frosene - I go up to see her coop scoop - she's so proud of it and by the way I look in and it's perfect it looks just like the training coops that we see at our demonstration farm. She does a great job.

Two of her children real small children are there with her. When she goes into the coop she does the biosecurity measures - just like we teach her to - everything's perfect. So I talked to Frosene, her household income about 40 thousand Rwanda francs, which is a little better than the than the average that I mentioned before but not by much. Maybe a dollar $1.10 - $1.15 cents a day. So I asked for Frosene - I said how'd you do on your last grow out? Well in six weeks and we have two weeks to clean out and in that eight week period she made 84 thousand Rwandan francs which is double her household income.

So I said Frosene what you do the money? Well first thing she did like Scott said she upgraded her diet. They did eat one chicken but she said her children's didn't like chicken. I just don't understand that. But she bought beans which is an important protein source for her young children. The second thing she did she went and bought a cow and from the government you can you can get there's a subsidy to buy a pregnant cow. So she brought a pregnant cow and she took it to her sister's house and her sister is going to is going to feed the cow until it calves. And the compensation for doing will be the calf. So her sister will get the calf she'll bring the cow back home and have a second source of nutrients for her family; fresh milk. She can get the cow artificially inseminated every time once a year and she'll get a calf a year.

So think about the economic development that a 625 dollar investment in a little chicken coop about this size has created for her family. That's just the first grow out. The second grow out she was going to do some improvements on her home. She has some much-needed things that need to happen. Then the next she was going to create another business. Think about that think about the economic development that's possible with just a little bit of capital and a little bit of knowledge about how to do something that they don't know how to do.

I was in a conversation not long ago with a with a group Consulting Group out of Europe who's actually working in Rwanda to kind of accelerate economic development. And one of the things they were focusing on was job creation, which is absolutely important. Right? But they were filtering their projects based on how many jobs it created. Now by the way everything we do in Rwanda is run by Rwandan you'll hear about Dale talk about the Bridge2Rwanda later. I have to Rwandans that were educated here in the US; Matthew and Rita that are at home running what we do in Rwanda. Any other businesses and I'll tell you about a couple here in a second that we're about to start - those businesses will be.

Now all of this is held inside of a 501C3 but these are all registered businesses in Rwanda and we treat them as such. I just don't want to get any economic benefit from what we're doing in ASAP. So anyways in this conversation I said wait a minute I want to create more jobs but if we could create a business that didn't necessarily create a bunch of jobs but that would open up another process limiting factor for economic development wouldn't that be just as beneficial to the country? Well tell me more. Well in animal agriculture 65% of the cost of producing that chicken is your fee the overwhelming majority of that is corn and soybeans.

Now in Rwanda you can get to crops a year. But in Rwanda they are plagued with the problem of importing very poor-quality seeds and they always get their seeds to their farmers late. So you can't plan on time and in agriculture you got to do stuff on time. But they can't do that on time. And when they do, they have horrible germination rates. And so a key to being able to help farmers be able to produce enough corn and soybeans - to be able to help the animal agriculture; eggs, maybe even you know swine, dairy, chickens, you name it. To be able to thrive and provide affordable food remember that key statistic about how much of their money is spent on food versus how much of your money is spent on food? That could get poor be poured into economic development if we can solve this affordable food problem. But yet we don't want so we want lower feed grain prices but we don't want the farmer to be hurt. We don't want the corn farmer, soybean farmer to be hurt to help the animal farmer. We want everybody to win. Well how do you do that? Great quality seeds that will actually germinate that get to the farmer on time coupled with them training and agronomic practices just like we've proven we can do in poultry - so that they will get much much higher yields and they will be then able to sell corn at a cheaper price and make more money and make the whole supply chain more sustainable.

That's what we're working on another problem another limiting factor? Chick quality; working on a hatchery. Again all these businesses will be run by Rwandans, in Rwanda. All they need is some capital investment. One last thing before I stop because I really want you to hear Dale’s story because Dale's story of capacity building is critical to helping the continent of Africa Africa succeed and to be very successful 50 years from now or 36 years from now. But I'm also commercially involved because again I have this passion for affordable food in Africa.

So after I left Tyson I'm now invested in a day-old chicken feed business that with operations in Tanzania, Botswana, Mozambique, we sell day-old chicks all over Africa. And again I'm going to spend the rest of my life involved in affordable food on this continent, because this continent needs it. I'm called to do it. And the resources are there if they just get a little help with a little know-how, a little technical expertise and a little bit of capital and that's a great great investment. Thank you

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