Update from Pakistan

Mohammed Shafi is an eight-acre farmer who must support fifty members of his family by farming, raising a few water buffalo, and working as a day laborer. He cannot afford to cover his expenses and as such, must take loans from local money lenders at rates in excess of 10% per month. It is farmers like Mohammed Shafi, that I am trying to help through my work with Micro Drip. Micro Drip is not a non-profit, but rather a social business. We sell low-cost drip irrigation systems to poor farmers at a reasonable price so that the farmer has access to this incredible technology, and we can serve him without asking for handouts.

Incredibly, it has been six months since I first arrived in Pakistan and God has been faithful in keeping me safe in spite of the violence that has plagued parts of the country. Thankfully, I've found that the reports on the news are scarier than the ground reality. The assignment has been the most challenging of my life, but I've also learned more here than anywhere else.

1) No plan will work unless it includes on-the-ground knowledge
The typical aid model of the past 50 years has been for smart people from the developed world to decide what people in the developing world need. This strategy is doomed to failure from the beginning. Poor people aren't dumb. They understand their ground reality better than you or I.

2) Innovation does not only come from the developed world
When working with poor farmers with little-to-no education, I have been amazed by some of the human ingenuity that I've witnessed. For more details, check out my blog (see link below).

3) I am now more aware of my own basic assumptions
When explaining how to calculate a farmer's net profit to a room of Masters-level sales people, I was shocked to learn that they did not understand basic percentages.

4) Human Resources is THE strategic function
You can have the greatest strategy in the world, but if you don't have the right people, then the strategy is worthless.

5) You and I are spoiled
I have had the opportunity to live with an incredible Pakistani family. I have access to a car, internet, AC, a TV, etc. The electricity goes out some five or six times daily and yet we have a generator to power the fans in the extreme heat. Most of this country is not so lucky. When in America, we don't even think about the electricity, water, or internet not working.

In three months, I will return to the USA and complete my fellowship with Acumen Fund in New York City. Acumen Fund is an innovative organization that uses the power of business to tackle some of the most critical social issues in the world such as clean water, affordable healthcare, renewable energy, and low-cost housing. Post Acumen Fund, I am considering several different career options, including potentially starting my own business or consulting with private companies that are seeking to enter developing markets. If you have any job leads that you believe would fit well with my skill set and interests, please do email me.

Thank you for your interest and support of my work around the world. While I believe my next job will be based in the US for at least a few years, I am sure that I will head abroad again soon.

Sincerely,

Joel Montgomery

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Innovations from the Field: Onion Lottery

The next series of blog posts will cover innovations from the field. Recently, I conducted some in-depth farmer interviews around Hyderbad and learned about some pretty interesting innovations that are happening on the ground. Keep in mind that these are not college-educated individuals; most have not even finished high school. What I saw was human ingenuity in its purest sense. At the end of the day, I found myself leaving inspired by their innovativeness and creativity.

Mohammed Ishmail is an eleven-acre farmer who doesn’t need a broker to diversify his portfolio. Like his counterparts in the developed world who invest in various types of stocks and bonds in order to spread the risk on their portfolios, Mohammed does not put all his eggs in one basket. During the summer season, he plants 10 acres of cotton, a crop with minimal price volatility, and one acre of onion, a crop that is notorious for huge price fluctuations. The price of onion can fluctuate between PKR 10,000 to 300,000. Mohammed sees this as an opportunity to hit the jackpot. According to him, during a 10-year period, he will hit the jackpot five to six times. Not bad odds. An onion lottery… that is innovation.

Joel Montgomery

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Innovations from the Field: Wheat ATM

The next series of blog posts will cover innovations from the field. Recently, I conducted some in-depth farmer interviews around Hyderbad and learned about some pretty interesting innovations that are happening on the ground. Keep in mind that these are not college-educated individuals; most have not even finished high school. What I saw was human ingenuity in its purest sense. At the end of the day, I found myself leaving inspired by their innovativeness and creativity.

Zulfiqar Ali, a four-acre farmer in the small village of Dabri, Pakistan, doesn’t travel to his nearest bank branch when he needs some cash. All he has to do is open the door to a room where he stores his wheat crop and travel to the market. Unlike most farmers in Pakistan, Zulfiqar does not sell his wheat crop upon harvest. He realized that harvest season was the worst time to sell his crops due to a glut in supply. Zulfiqar stores his wheat crop and sells it one bag at a time, based upon when he needs cash. With each passing week, the value of his remaining wheat increases. A wheat ATM… that is innovation.

Joel Montgomery

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Innovations from the Field: Natural Life Insurance

The next series of blog posts will cover innovations from the field. Recently, I conducted some in-depth farmer interviews around Hyderbad and learned about some pretty interesting innovations that are happening on the ground. Keep in mind that these are not college-educated individuals; most have not even finished high school. What I saw was human ingenuity in its purest sense. At the end of the day, I found myself leaving inspired by their innovativeness and creativity.

Agriculture is extremely risky. There are so many things that can go wrong: bad seed, no water, pest attack, fake fertilizer, bad weather, no transportation to market, etc. Price fluctuations are also quite common. This means that a farmer may spend Rs. 25,000 (USD $315) or more on inputs (seed, fertilizer, pesticide, etc.) and land preparation (tractor rental, laborer wages, etc.) just to find out at the end of the season that the price of his crop is so low that he will make a loss. He borrowed money at the beginning of the season from an arti (money lender) at a rate of 120% annual interest and now is even farther in debt.

In Pakistan, most farmers grow two crops: cotton (summer) and wheat (winter). We always wondered why both crops were so prevalent and finally realized upon completing our interviews. Firstly, most farmers grow cotton and wheat because the prices are stable. It takes a lot of the guess work (and risk) from other types of crops that have more volatile prices. Secondly, farmers grow cotton and wheat because they don't spoil. If you grow vegetables, then you must transport them to the market quickly before they rot. Cotton and wheat, on the other hand, can be stored for a long time and won't go bad. Probably the most interesting reason for the traditional cotton-wheat rotation is that wheat is a natural life insurance policy. Farmers grow wheat and keep 50-100 munds (1 mund = 40kg) back to ensure that their families have food to eat during the coming year. Usually an average family needs around 50 munds per year, but they keep extra for festivals, weddings, and unforeseen circumstances. No matter what happens in the coming year, the farmer knows that he can provide for his family. A natural insurance policy... that is innovation.

Joel Montgomery

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