Article written for the Moral Report on Money in the World : "A Good Example of the New Philanthropy : The Foundation for World Agriculture and Rural Life (FARM)", by René Carron, President of FARM.
FARM is an expression of the desire of concerned private-sector actors from developed countries to take an innovative approach against hunger, poverty and underdevelopment.
Far too many inhabitants of planet Earth languish in hunger, under-development and poverty. Among these are many farmers and rural dwellers, who are unable to find any means to struggle against these conditions. FARM’s calling is to provide them assistance especially in the form of focused reflection and carefully considered activities among growers and their professional and interprofessional organisations.
An innovative effort to fight against hunger and to promote farming
As a tool for professional and interprofessional agricultural organisations, FARM is an innovative effort to fight against hunger and to promote farming.
More than 800 million people worldwide go hungry. In Africa, 500 million people have no other source of income than farming, while 70% of the continent’s poor are rural dwellers. Agriculture is one of the foundations of economic development. Without it, rural life declines, cities grow uncontrollably, social disequilibria mount, as do poverty, violence and ecological mayhem.
Southern hemisphere farmers are too often left alone to face these dangers. They are helpless in the face of the vagaries of climate, and are given no assistance in improving their production through technical innovations on their farms. Nor are they any less powerless against downward tendencies in farm prices, while remaining unable to negotiate effectively with other economic actors in the goal of reaping their share of value added.
Such challenges call for clear and well-structured responses. Farmers in the South need to form professional organisations, strengthen those that already exist and establish marketing organisations and other mechanisms to encourage private investment. Helping them do so, however, does not mean neglecting the technical skills needed to intervene in agricultural policymaking exercises at the national and international level.
Our Foundation is working in this direction. It acts as a center for exchange and reflection, a force for identifying, studying and making known all actions by the ensemble of partners working towards the same ends. The Foundation’s rôle is also to contribute to world environmental governance and to mobilise civil society on behalf of international solidarity and of a form of development that will be agricultural, rural, and sustainable.
FARM’s founders have laid out three avenues for the Foundation’s action. First of all, it is to foster reflection on agricultural strategies and policies among LDCs and to participate in the debate by bringing fresh ideas and new propositions. Next, it should contribute to the new knowledge, exchange, information and training that agricultural professionals and economic actors need. Finally, it is to increase developing country access to skills, know-how, and technologies in the areas of production, transformation and marketing of agricultural and agri-food goods.
These goal are written into the statutes of the Foundation. An observer cannot help but note that such activities are traditionally the vocation of the State or its agencies or of multilateral organisations. What, therefore, is a private foundation doing in this field of endeavor ? Shouldn’t public authorities be left to organise cooperative efforts for development among private actors in the North and the South ?
Private enterprises concerned with public welfare
When enterprises act in the general interest it is often observed that they are acting in their own interest as well, deriving economic profit from philanthropic works. On one hand the private firm improves its public image and broadens its recognition. On another hand, it benefits in fiscal terms by contributing to tax-exempt foundations and charities. Similarly, it could be observed that when Northern firms contribute to Southern development they are also developing markets for their own products.
There is also the aspect of a firm’s own history and corporate culture that comes into play for those firms that have always maintained a commitment to the general interest through philanthropic activity. For the principal firms behind FARM – Credit Agricole, Limagrain, Vilmorin, the GNIS and Sofiproteol – there is further impetus provided by their own history of commitment to and participation in rural economic fabric, in the tradition of mutualism and cooperativeness in the countryside, whereby means are pooled for the betterment of all.
Observing the birth and activity of FARM, it is easier to understand the even more general principle whereby – for a number of private sector and social actors – the State is no longer the only guardian of the public interest. Industrial nations’ enterprises now seek to contribute directly to solving general problems which are of interest to them. It is their position that acts of solidarity cannot be refused simply because they originate in the private sector. Likewise, these private sector actors do not hesitate to participate in public debate, to note the insufficiencies of public action alone, and to generate mobilisation around a specific issue. In this light, general interest is a common ground for free action where citizens and enterprises are able to exercise their private spirit of initiative for the public good, acting either directly or via public-interest organisations like FARM. In this way, philanthropy is not a competitor of public initiative, but rather an essential complement to it.
Lastly, I am convinced that by supporting FARM, its partnering enterprises have made a fundamentally ethical choice ; they are not sitting by as a large part of humanity suffers hunger and under-development without attempting to do something about it. It is an unavoidable conclusion of recent observation that public action, whether international or national, has not proven equal to the current challenges facing agricultural development, even if they have in the past made fundamental contributions to improving this vital sector. It is in part out of such motives that private actors have taken their place in the philanthropic sphere. FARM is a clear and innovative example of this new form of philanthropy.
Once FARM’s founding companies felt the need of concerted philanthropic action, it remained to find an appropriate mechanism. This search led them to create a tax-exempt (public interest) expendible-endowment foundation.
FARM brings together a broad range of expertise from partnering firms with long international experience
Associating partners from widely varying backgrounds within one foundation is one of the hallmarks of FARM’s originality. The State undeniably wields a number of powerful tools in the service of development, while the AFD is a major actor in this area. At the same time, most of FARM’s founding enterprises are involved in foundations and not-for-profit organisations of their own, working on major philanthropic efforts in developing countries. Therefore the question naturally arises of why these firms are not content simply to continue their own good works. Why have they come together to form this new institution ?
It would be less than the truth to claim that the large amount of money needed to face current challenges is not a motivation for united action, but in the case of FARM this is not really the main motive. Proof can be had simply in the fact that its annual operating budget is nomore than a million euros. The idea for the Foundation took root rather in the realization that agricultural issues in their complexity and their need for long-term solutions require a range of actors possessing many skills. Providing water access to a farmer, for example, requires funding a distribution system, ensuring other inputs, mutualising the tools of production and developing marketing and distribution channels for surplus production. Likewise, structuring agricultural sectors in Africa means having recourse to the experience of French agricultural professional and interprofessional organisations. These examples illustrate the utility of concerted action among FARM’s current members and any new members offering good will and – especially – international experience.
In this way the AFD benefits FARM with its detailed field-level knowledge and its understanding of development problems. The Casino Group possesses a rich lode of experience in marketing agricultural goods. Suez brings to FARM’s projects its considerable know-how in water treatment and water production, while Limagrain and Vilmorin are experts in the workings of agricultural cooperatives. Credit Agricole possesses expertise in micrfinance which it puts at FARM’s disposal. GNIS meanwhile is able to counsel FARM on matters of the financial organisation of agricultural sectors and interprofessional actors.
FARM has from the outset been committed to pooled efforts. Several projects come to mind as illustrations. In November 2005 FARM’s precursor association organised a conference in Paris for 400 members of African and French interprofessional organisations in preparation for the World Trade Organisation meetings in Hong Kong. FARM also succeeded in setting up training sessions in management and lobbying for African professional organisation executives. These activities brought to light the particular difficulties faced by the African cotton growing sector, which represents the livelihood of 10 million people but which is in severe crisis. This awareness led FARM to join with the renowned French business school HEC (Hautes Etudes Commerciales) to partner an effort of support for the African cotton sector.
In the same vein, FARM has formed study groups on water, marketing, and microfinance. It has generated reports on cotton, bananas, and sugar. In doing so it participates in the exchange of ideas and in the development of new partnerships as a way towards a new world of agriculture that is open and equitable. Along these lines FARM contributed to the writing and publication of a white paper report on Cotton, and it also played the pivotal rôle in organising a conference in Paris in December 2006 on "What future framework for agricultural policies in Europe and developing countries ?". This three-day event was attended by some 600 individuals from across Europe and Africa.
In making these issues its own, FARM is responding to requests by developing country professionals and making exciting encounters and debates happen among actors from the field. Continuing in this vein, FARM is preparing a major conference in Paris at the end of 2007 on the subject of microfinance.
FARM, an expendible-endowment foundation, is a way to pool energies and multiply initiatives
It is worth underlining the special usefulness, amidst the new landscape of philanthropic mechanisms, of an expendible-endowment foundation and of its capacity for unleashing new energies.
In legal terms, such a foundation is the establishment of a legal entity. A foundation is, first and foremost, an act by which several persons or entities decide to yield control over certain resources, rights and holdings in order to establish a work aimed at the public good and with no profit-making objectives. A foundation is in this sense a conditional grant to an existing entity or one to be created. FARM benefits from contributions in the form of funds, personnel or gifts in kind. Secondly, the foundation is an independent legal entity with its own powers, separate from those of its members. The foundation inspires confidence as it is surrounded by a number of legal guarantees, such as the right of oversight by the State Council over its bylaws, the inclusion of a government commissioner on its board of directors, or the communication of its accounts to the public authorities which are empowered to conduct audits when they wish to do so or to submit them to state financial inspectors. In this way the foundation becomes a tremendous lever for mobilising good will and participation.
The staff of FARM is composed of only twelve persons and, despite their evident qualities and commitment, what FARM has accomplished already would not have been possible without the participation of the various Foundation working groups and governing bodies. It is important to note that all such participation is on a volunteer basis.
The Foundation is piloted by a Board of Directors, which comprises founding members, friends of the foundation, and qualified persons. This organ of governance becomes an organ of action when its members put themelves at the service of the Foundation. The rôle of the Advisory Council is also essential to the Foundation. Comprised of eminent actors and experts, the Council is an invaluable source of new propositions and expertise. Finally, the working groups of the Foundation, as mentioned above, are the occasion for fruitful encounters among professionals, researchers and field-level actors.
Overall, the mobilisation of the private sector, accompanied by the State and the AFD, united around a meaningful programme, is an ideal means for liberating invaluable new energies and achieving effective common action.
Finally, it is important to applaud a recent change in French law, from which FARM has benefited. Since 2003, a foundation can be established on an expendible-endowment basis. In FARM’s case, 70% of its initial endowment of 6,950,000 euros can be disbursed over a period of five years. This particularity allows the founders to establish in advance the level of their commitment, to spread it out over time, and to be sure that the sums spent will be directly for carrying out the Foundation’s programmes. The expendible nature of the funds requires moreover that the foundation prove its usefulness if it is to endure, since continued existence will be based on funding by current or new members. In this way a foundation is subject to the laws of necessity and efficiency. The need to be useful and effective will certainly not be lost on private sector donors when the time comes for the Foundation to call once again upon the generosity of its private sector donors, who in turn are accountable to their boards of directors and stockholders for all money spent.
In conclusion there is a considerable change occuring in developing countries and especially in Africa which it is important to point out : a new generation of agricultural sector actors is arising. Young representatives of professional organisations are eager to take up their rôle as economic actors and entrepreneurs and to share experiences with their French counterparts. This desire is emblematic of a new, shared approach whereby private sector actors come together to make their voices heard by public sector deciders. This new situation represents a promising way forward for development and one that FARM will not fail to accompany and to sustain. FARM will attempt in this way to be a modern and effective tool in the service of one of the greates challenges of our time : eradicating hunger while fighting poverty and under-development.
President of FARM