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The Sustainable MBA

Heifer International’s Pierre Ferrari on sustaining small farms

If you give a man a fish, he’ll eat for a day. If you teach a man to fish, he’ll eat for life — or so the adage goes.

This is the philosophy out of which the poverty and hunger-focused nonprofit Heifer International got its start in the 1940s. Heifer International connects low-income communities in impoverished regions around the globe to individual donors, whose aid comes in the form of livestock and training.

Bard MBA spoke to Heifer International President and CEO Pierre Ferrari about Heifer’s work to increase community capacity, partner with local governments and diversify its value chains.

Ferrari, born in the Belgian Congo (today the Democratic Republic of Congo), received a master’s degree in economics from the University of Cambridge and an MBA from Harvard Business School. He joined Heifer with more than 40 years of business experience at companies such as Coca-Cola USA, CARE and the Small Enterprise Assistance Fund.

The following is an edited excerpt from a Sustainable Business Fridays conversation Feb. 26 by the Bard MBA in Sustainability program based in New York City. This twice-monthly dial-in conversation features sustainability leaders from across the globe. 

The conversation was led by Antonio Nogales, a current MBA student and associate professor of culinary arts at the Culinary Institute of America, who is interested in raising awareness of sustainability metrics in our food systems.

Bard MBA: Since starting at Heifer about five years ago, how have you seen the organization grow in that time? Where do you see the company going?

Pierre Ferrari: The organization had just gone through a very fast growth period until the 2008 financial meltdown. It was a hard time in the nonprofit world. I came in with the intent of creating an organization that has systems and efficiency to use the resources it has in preparation for training and incorporating smallholder farmers into value chains.

That work has basically been completed. Now we can move much more aggressively into impact venturing and increasing community capacity to form co-ops and farmer organizations so that they can capture the value in value chains.

If you are a smallholder farmer with three cows, there’s no leverage there.

If you are a smallholder farmer with three cows, there’s no leverage there. Whereas if you have an investment or an ownership in a chilling plant that can possibly process and market the milk, you can capture some of that value. That dramatically improves the life of the farmer. We’re talking with some investment firms on how to deploy this impact
investment at concessionary rates.

The opportunity for investment is enormous. It’s simple supply and demand: the demand for capital is enormous and the supply is limited. We want to make sure these opportunities are captured by farmers and not by outside interests.

Bard MBA: Do you partner with any other organizations to achieve these goals?

Ferrari: Sure. One of the fundamental partnerships we look for and which has been increasingly successful is with local governments. We’ve received tremendous support from district governments in Kenya and provincial governments in Nepal and India.

They have the resources to do the development work that we do with smallholder farmers in more remote areas. These are important partnerships because we can’t rely on philanthropy and extension services indefinitely so we work with and train local government systems to build the networks needed to maintain services to farms.

One of the extraordinary things the U.S. has done is through its extension services. The land schools and services provided to farmers over a century and a half has been a key party to an effective system that we should be replicating.

Bard MBA: You’ve mentioned Kenya and Nepal, but where do you see Heifer making the most substantial impact today?

Ferrari: We’ve got substantial projects in Africa, India, Bangladesh and the Philippines. We also have substantial projects in dairy, goats, chickens and eggs. All chains that are demand driven and provide opportunity for high-quality sustainable income to smallholders, we are engaged in.

One of the more interesting value chains we are engaged in is spices. The spice market is growing by leaps and bounds as income increases, culinary tastes improve and spice demand takes off. We’ve got to be entrepreneurial in that way.

Bard MBA: From a donor’s perspective, how do farmers go about participating in your program?

Ferrari: So, we have offices in 26 countries that are always in touch with communities where we are working and might be working. We are on the scale of about 8,000 families per project, which is several villages together, connected. We typically go to the leadership in villages and then go down to the individual families to mobilize them through what we call "values-based trainings."

In this model there are 12 values that have to do with accountability, self-reliance, caring for others and many more. We move from there to create conditions for self-help groups and community organizing.

About 60 percent of our programmatic budget is actually deployed in trainings, and about 40 percent in animal or physical assets. Fundamentally, we can’t expect people to take care of animals without training. Taking care of animals is a complex and difficult thing to do.

The communities have been doing a lot more of the work in terms of training and networking. For those of you who have studied network effects, this is very valuable. We’re always looking for that.

Our staff has been committed to a great deal of compassion and kindness to the communities we serve. We’re not a business. Whatever dialogue we have about markets we have to match with dialogue about livelihoods and ethics. I think we’ve navigated that fairly well.

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