The Little People.

Creative capitalism needs risk takers in science

If you were a Wall Street investor and a loser, what you had was paper money. Now the paper has run out; now you’re left holding the bag, no paper. You invested your future on a piece of paper, and now all you have is the future.

Wall Street has always been high risk, as high as the Trump Building at 40 Wall Street between William and Broad Streets - 282 meters, 72 floors. Wall Street is speculative, not creative capitalism.

Now, it’s time to invest more on the little people. Compared to Wall Street, the little people are hardly a risk. They are the greater number anyway, the multitude, remember? Out of the sweat of their brow we have been enjoying our food, clothing, shelter, and medicine, not to mention our luxuries. The little people are the creative workers. Take the creative risk, if not Christian risk, and you’ll be glad you did. Didn’t Jesus say? ‘Just as you did it to one of the least of my brothers, you did it to me.’ Matthew 25: 40 NRSV

I imagine that’s what Bill Gates was saying when he announced his theory & practice of ‘creative capitalism’ (see my ‘Bill Gates, Nobel Prize for Economics 2008!,’ this blog). That’s going against conventional wisdom. Creative capitalism is truly spreading the wealth to include those who have none, not concentrating it in Wall Street to people who already have everything. In other words, Bill Gates, bless his soul, was calling for New Risk Takers.

So, aside from Bill Gates, is anyone else interested in taking the risk with the little people? Alas, we have so few great historical examples in the last 100 years:

In California, yes, in 1906, when the Great Quake flattened rich and poor alike.
In
Bangladesh, yes, in 1976, when economic theory said the practice was crazy.
In
India, yes, today, while the US continues to think rich even in science.

On 18 April 1906, the Great San Francisco Quake reduced much of the city to debris. He knew exactly what to do. Amadeo Peter ‘AP’ Giannini sifted through the ruins of his bank, the Bank of Italy, loaded his wagon with some $2 million in gold, coins & securities, and went back home (Daniel Kadlec, 1998, time.com). Was he stealing it? He was stealing time. AP didn’t wait for the other banks planning to open in 1 month; in 6 days, he set up his new ‘bank,’ which was a wooden plank set on top of 2 barrels, and proceeded to extend loans ‘on a face and a signature’ to small businesses and small people to help them rebuild less their business and more their lives. He was banking on the little people.

He didn’t apply the old banker’s rule that I will lend you money only if you can show me you have money. In other words, he was not lending money; instead, he was giving out hope. Was his trust in the working class misguided? It wasn’t. AP’s bank grew and extended beyond San Francisco, had branches from coast to coast, and eventually became the Bank of America, which he had made into the largest bank in America at the time of his death in 1949. (It’s #2 today, behind Citigroup, $572 B vs $751 B.) AP is the only banker to make TIME Magazine’s ‘Builders & Titans of the 20th Century.’ He is my Working Class Hero!

Not only that. AP was not averse to risk when it came to the poor, but he was averse to riches. He is my Working Glass Hero! (I wear glasses when I work.) ‘I don’t want to be rich,’ he said. ‘No man actually owns a fortune; it owns him’ (quoted by ANN, 2008, entrepreneur.com). Personally, I have always been averse to the risk of rich. When I was that high in our village of Sanchez somewhere in Central Luzon, Philippines, I saw how miserly our neighbors-relatives were who were better off, and I thought that their wealth made them so, so I vowed never to become wealthy, including never to marry rich. And, to be frank and honest, I have kept that promise, even at the cost of breaking a heart -- mine.

AP also said, ‘I have worked without thinking of myself. This (is) the largest factor in whatever success I have attained’ (quoted by ANN as cited). One in a million soul.

In Bangladesh, another fellow, another rare hero has been working without thinking of himself. He is Muhammad Yunus.

In the mid-1970s, forgetting modern economics, Yunus wasn’t thinking of maximum profit at minimum service; he was thinking of maximum service at minimum profit. He was thinking small; he was thinking little people. He was a Professor at the Chittagong University in Bangladesh lecturing on economic theory when one day he decided to put into practice what he was not preaching: Lending money to those who had no visible means of paying it back. That is foolish. No, that is faith, ‘the evidence of things not seen, the substance of things hoped for’ (Hebrews 11: 1 KJV).

How small was it when Grameen started? $27 loaned out to 42 people, that is, it came to a little more than 60 cents to a borrower (Evaristus Mainsah et al, 2004, web.mit.edu). How small can you get? But Yunus had faith bigger than his heart; and the village borrowers of Bangladesh had hearts bigger than their heads – all of them surprised the economics professor by paying him back! That’s gratitude. From the little people.

That started the Grameen Bank, which was formally set up in 1983. ‘Grameen’ from ‘gram’ or village; Grameen was for the villagers, not the villagers’ leeches, the usurers. (We call them 5-6 in the Philippines, the 20 percenters, who collect everyday.) With Grameen, social pressure kept everyone honest. 23 years later, Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize for 2006.

‘All people,’ Yunus told the graduates of MIT 06 June 2008, ‘are packed with unlimited potential (and carry) ‘a wonderful gift inside them. … Our challenge is to help unwrap their gift’ (David Chandler, web.mit.edu). He was asking the MIT graduates to create a new kind of businessman, a society-minded type. ‘You can change the world,’ he said. As he had. ‘When many little people take many little steps in many little places, they can change the world!’ – Barbara Rutting

Today, micro-credit is a multi-billion dollar industry in many countries. Now, what Grameen and its many copycats worldwide call micro-credit, I prefer to call little people-credit. Give credit to whom credit is due, people! It’s the little people that make it work, not the size of their credit. These are ‘minute sums, borrowed mainly by illiterate women, to set up the smallest imaginable enterprises’ and the success of Grameen illustrates the ‘bankability of the unbankable’ (Rosemary Righter, London Times, 31 October 1998). Grameen grants to women 95% of the loans (Mainsah et al as cited, 2004). Is this the bankability of women? Maybe. Rather, I think it’s community. It’s village. It’s the bankability of little people who don’t theorize but practice.

In India, members of Team ICRISAT both theorize and practice for the poor. ICRISAT is the International Crops Research Institute for the Semi-Arid Tropics based in Patancheru, Andhra Pradesh, India, a terrific science NPO (non-profit organization) headed by Director General William Dar, since 2000. ICRISAT, among the 15 international science centers under the support and advocacy of the CGIAR (Consultative Group on International Agricultural Research), has been rated Outstanding in overall institutional performance by the World Bank twice in a row, in 2006 and 2007. The World Bank supports the CGIAR.

Rated O for 2008? I wouldn’t be surprised. ICRISAT is creative for a science agency. Among this NPO’s many initiatives is what it calls the ABI (Agri-Business Incubator), which it has set up in its campus in Patancheru. Another winner. The ABI received the AABI Incubator of the Year Award for 2008 last 29 October in Seoul, Korea. The AABI is the Asian Association of Business Incubators; that was their 13th General Assembly meeting. Not many people recognize a winner when they see one.

ABI is not unlike Grameen, as it is also pro-poor and a risk taker. But this one is bigger business. This is essentially where capitalists meet the poor and with the support of the Government of India, donors and with ICRISAT technology, they incubate an entrepreneurial egg until it hatches and grows into a hen that lays all those proverbial golden eggs.

My favorite example of an ABI product is the sweet sorghum facility of Rusni Distilleries in the Medak District of Andhra Pradesh, which is now producing 40 kL (10.5 kgal) of ethanol every day from sweet sorghum and other feedstocks. Harvesting and processing the stalks provides about 40,000 man-days of labor per year at Rusni. Last year, 540 ha were planted to sweet sorghum and involved 791 farmers in Andhra Pradesh. A great beginning of a great industry.

Team ICRISAT is dead serious about sweet sorghum, and so am I, in case you haven’t noticed? And now the Team is developing a 5-year sweet sorghum R&D strategy. To help the fledgling sweet sorghum industry to develop, as far as I can discern from the senior staff discussions, with partners outside of ICRISAT, the Team plans to mainly:

(1) map out zones for cropping in Asia & Africa.
(2) breed sweet sorghum with higher & higher yields.
(3) improve cane processing to reduce losses after harvest.
(4) test syrup-making at the village level.
(5) test a 50-mile radius for farmers supplying cane to distilleries.

Those are the bare-bones essentials of the plan. I think it’s a good one.

But, you know, no longer young, now I’m an impatient old man, and I can’t wait that long. I want results today.

So, while members of Team ICRISAT work out the details of their new strategy to breed and select outstanding sweet sorghum varieties and help the farmers get the most from their labors, I believe Team ICRISAT and partners will do well also to map out a parallel strategy, what I shall refer to here as ‘The Village-Friendly Initiative.’ The basis of Village-Friendly is the well-known mantra: ‘Think globally, act locally.’

I remember last year, Team Captain William Dar and I were talking about the national rice trials that have been conducted in the Philippines probably for the last 50 years. Researchers test-plant promising rice hybrids in many locations, gather the data, and compute for the consistent highest yielder in all locations, select that and recommend it to everyone, and deselect the rest. That’s thinking global. We agreed that this needed a paradigm shift. A change we can all believe in. Crops are always location-specific; they perform best where they will, not everywhere. Plant breeders can telescope time if they compute for the highest yielder in each location instead and recommend that for that location. That’s acting local.

That is to say, you prescribe on-site what you have pre-tested on-site. For example: If you test-planted 26 varieties of sweet sorghum (SS1 to SS26) in 52 villages (V1 to V52) in 52 provinces in the Philippines, you will find, for instance, that SS1 is best in V15 and V36, SS13 in V2 only, SS18 in V25, V37, V38, V45, V51 and so on and so forth. So you recommend SS1 for V15 and V36 only, SS13 for V2 only, and SS18 for V25, V37, V38, V45, V51 only, because these are the village-specific, village-friendly varieties. In 1 year, you see, you have 26 outstanding varieties planted where they perform their level best. Max.

Applying that proposition, from out of the available sweet sorghum varieties and hybrids of ICRISAT, the highest yielders can be selected from those test-planted in the villages. (For Ilocos Norte, northern Philippines, you can ask VP for Planning & External Linkages Heraldo Layaoen of the Mariano Marcos State University; he has an ICRISAT-funded project on sweet sorghum, and he has  been making trial plantings of several varieties for several years now.)

After that, you worry about processing and marketing. You always have to worry about processing and marketing, especially marketing. That’s where the little people usually get the littlest of the benefits from the sweat of their brows.  

Meanwhile, the 2007 data from the ICRISAT-Rusni experience at Andhra Pradesh indicate that, ‘by and large, the crop performance was satisfactory under good soil and rainfall conditions and where the farmers adopted the recommended crop management practices,’ Captain of Team ICRISAT William Dar tells us. ‘We have data indicating greater scope for increased yields under farmers’ conditions, provided they manage their crops well and the rainfall is good.’

Noted. Yes, they have some familiar but unconquered territory to explore. This year, the best yield in scientists’ farms is 50% higher than the yield in farmers’ farms. That is to say, since ICRISAT scientists harvest 50 tons max while farmers harvest only 25 tons max, you have a yield gap between lab and field of 25 tons of green stalk yield per hectare. In this case, practice is 50% of theory. How do you improve that?

Not only that; based on the above info and data, the sweet sorghum Indian farmers who got 25 tons max did so given the following conditions:

(a) good soil
(b) good rainfall
(c) farmers following experts’ recommendations.

(a) Black is beautiful even in soils – they are more fertile. (b) Enough rains, because there is no irrigation facility. (c) The farmers have to follow recommendations in terms of crop care. The fact that many of them don’t is, again, as I see it, the question of not being able to ‘sell new knowledge,’ a question not merely of transfer of technology but of diffusion of technology. Upstream or downstream? The farmers have much to learn, and so do the scientists.

I believe the 3 givens are all crucial. I also believe that the 2nd is the most crucial of all. The Water Watcher thinks that this is so because the farmers can always build a good soil on their own whenever they decide to; they can always follow the experts’ advice anytime they wish; but the farmers can not control the rain even if they want to.

Or can they?

They can, actually, if they want to. Team ICRISAT’s research findings tell us how, and I have written about it (‘Water Lessons of Adarsha,’ this blog). When the rain comes, harvest the water – and you control the rain. The experience of the poor farmers of Adarsha tells us that you have to invest in the water, in this instance the rain.

So I hope that some new NPO partners of Team ICRISAT will be taking newer and more risks investing in water.  I hope that in the ABI at the ICRISAT campus in Patancheru, they can convince (or convene) another village-friendly bank to invest in poor sweet sorghum farmers who own only their faces and their signatures and need to invest their energies in water for their farms and homes in the villages. Liquid Green Grameen, I shall call it. When they succeed, and I have no doubt they will, like the Grameen Bank of Muhammad Yunus, Liquid Green Grameen will become a model for many a developing country in Asia and Africa. Even if they don’t win a Nobel Prize for Peace, they will have already won the hearts of the little people who number in the billions. *

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