Leading Sustainable Organizations
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When it comes to agriculture, sustainability can mean many different things: Providing access to markets for smaller farmers; reducing pollution from pesticides or chemical fertilizers; limiting deforestation and habitat loss; managing soil to avoid nutrient depletion or erosion; or ensuring efficient use of water resources.
In arid landscapes such as Israel’s Negev region, farmers have to be particularly conscientious about water use. But as concerns about the future of agriculture in changing economic and climatic conditions rise, farmers the world over are beginning to explore ways to stretch what may become an increasingly limited resource.
In a conversation with MIT SMR’s Nina Kruschwitz, Netafim’s chief sustainability officer, Naty Barak, explains how the Israeli company’s origins in arid-zone agriculture in 1965 became a springboard to a wider market for agricultural producers to maximize water efficiency. He also explains how the company’s partnerships with NGOs seeks to bring the technology to small farmers in the developing world.
How did Netafim get started?
We started Netafim about 50 years ago in the Israeli desert. We introduced drip irrigation to the market. It was a new approach to irrigation and to agriculture that allows you to drip small quantities of water directly to the roots of plants. It is highly efficient. At the time, most farmers used flood irrigation or sprinkle irrigation.
So was Netafim organized in response to resource constraints?
Yes, our kibbutz, Kibbutz Hatzerim, is in the Negev desert. We didn’t have enough water. We had poor soil. We were struggling. The farming was very hard work. And our kibbutz founders were — we thought at the time — getting older. They were probably in their late thirties, and we thought, how is this going to continue? Physically, these guys won’t be able to keep farming much longer; we need to find something to do. Originally, the idea was developed just to provide work for 14 kibbutz members.
Then we met Simcha Blass, the guy who invented [modern] drip irrigation. It was a match made in heaven. He was a water engineer. He was involved in finding solutions for Israel’s water challenges. He was the engineer behind building the pipeline from the Sea of Galilee down to the southern desert.
His main reason for going into this research and doing drip irrigation was water scarcity. At that time, he wasn’t aware of the advantages this method also yields in both quantity and quality. A drip system keeps the water off the plants’ leaves, so there’s less possibility of fungal diseases taking hold, but at the same time it avoids watering the area between plants to reduce weed growth. The water goes directly to the crop plants’ roots, so they have the consistent available moisture that they require. There’s no splash erosion like with sprinkler systems. You don’t have as much nutrient leaching the way you do with flood systems. So you get better yields, better produce, with less work and lower impacts on the soil.
And this was something I imagine the Israeli government and others were excited about?
Yes, I would say so. This was at a time when Israel’s leaders had as their stated goal “making the desert bloom.” Our company was very, very small. We collaborated mainly with the Ministry of Agriculture, the extension service, with researchers, and with agricultural departments at the universities in Israel. There was no way we could do this on our own. We had to educate the market, and create it also. Our first customers were grape and fruit tree growers, also in the desert, and then soon after that it was vegetable growers.
Were the collaborations with the academics to figure out the optimum methods of doing drip irrigation, or how to apply it for different crops?
Yes, exactly. It was a question of getting professional knowledge about things like the best interval of irrigation, the space between drippers, the quantities, how to apply the fertilizer to the plants, when, and so on. It was lot of work to figure all this out, but we did it together with people from the university, and since a lot of education had to go hand in hand with selling the product, the extension services played a very important part.
In our specific case, there was even an NGO involved, because there was at that time a large international NGO, the Jewish Agency, that was helping the farmers in remote areas of the country, and giving them seeds or the funds to make investments and so on. So, they also collaborated with us.
A few years later, we started working outside of Israel. Initially, the people who took drip irrigation from Israel were researchers who were on sabbatical in Israel, saw how successful it was, and took it home with them. The first U.S. installation was in June, 1970, on an avocado orchard located in northern San Diego County in California. Others soon followed, and the method spread to Australia and South Africa.
These folks were primarily interested in the water efficiencies, or something else?
Drip irrigation was used mainly for high-value crops like orchards, almonds, grapes, greenhouses, cherry tomatoes and so on. And it was mainly in the developed countries and mainly with the large-scale farmers.
They referred to it as an investment, like buying a new tractor. They bought drip irrigation. These farmers invested in drip irrigation as a tool to increase yield, quality and quantity, to reduce labor and management costs, save on fertilizers and reduce weeds.
In most places at that time, water was abundant and free, so conserving water or being efficient was not the selling point for these farmers. While it’s true that many people, for example in California, were aware of water issues, it was not the reason that farmers bought drip irrigation. They got as much water as they wanted whenever they wanted it then. I’m talking 30, 35 years ago now.
And now? Is there more awareness?
I think in the last 30 years, we’ve been witnessing a very interesting change. Today, most of our work is done in the developing world. As a matter of fact, our largest and fastest-growing market is India. And we know that in India, our average customer has two to three acres, so we’re talking about small farmers, not very rich, not at large scale.
I have to remind myself — and if I don’t, my CEO always reminds me — that we are a for-profit organization. We are a business, a private-sector company, and we’re doing good things for the planet. But still, we are a business.
So, when one of our salesmen has to decide whether to turn to a poor farmer who has one acre or to a large grower of sugar cane who has thousands of acres, he will go naturally to the larger grower. But still, I think that as a business we cannot ignore the smallholder farmers. Number one, there are a huge number of them, and number two, they are producing most of the food in the developing world.
So how do you choose who to work with to reach these smaller-scale farmers?
We need partners who know farmers, know smallholders. And this can be government agencies, this can be NGOs, this can be an integration of a financing organization like the IFC or the World Bank. It can be a large NGO, or it can be a local NGO. But through the culture in the organization and so on, we need partners to organize the farmers for the training — because training and know-how, knowledge transfer, is essential — and we need farmers on board to get the financing.
Which kinds of partners are best for different needs?
It’s an excellent question. I would say — again, depending on the geography — that for training and for extension work, I think that government is the best partner.
In India and in some other places, we have found that government is also an excellent partner for financing, in a very natural way. For example, I never thought about irrigation as answering some of the challenges of gender issues. But it so happens that most of the smallholder farmers are women, and when you bring new technology to them, it’s a good investment not just for increasing the entire yield, but it also helps the women farmers. It’s education, and it helps them, gives them pride in what they’re doing. They’re not just going every day to carry water on their heads or shoulders, but they go to work an innovative and new irrigation system. They mix fertilizers and learn to clean the filters and so on. It changes the attitudes towards the women farmers.
So in India, for example, it is the government that says, we need the drip irrigation, we will finance it. Part of it will be a grant, part of it will be a loan from the bank, but we will also give guarantees to the bank, and we will arrange the training.
And what do the NGOs do?
There are some small-scale projects with NGOs in India, but it’s mainly government. In Turkey, we also partner with the government because of water issues and regions that they want to develop and so on. So we have subsidies from the government and help from the government. It’s mainly financial collaboration with the government, and it brings a good result.
On the other hand, many NGOs are active in Africa, for example, and they are familiar with the challenges of poor farmers, and want to help improve their lives. There are many smaller and regional NGOs, as well as larger and more-established international agencies. We’re doing some work with USAID, and we’re always looking for more partners there. We share the same goals. We are turning to the same people. They’re very much concerned with agriculture, with poor farmers, with water and food issues, and they’re natural partners for us in organizing groups of farmers to create a critical mass of change, to help with the know-how and knowledge transfer, which builds capacity.
We used to say for many years that our business is in irrigation, and our commitment is to sustainability. But actually, our business is sustainability, because drip irrigation saves water and grows more food without any greenhouse gasses and using more energy and so on. So, this is our business, and this is the main concern of all the partners we look for and want to partner with.
And what is your role in finding them?
Sometimes the contact with new partners happens in the field. We have 27 subsidiaries and 4,000 employees now all over the world. In countries where we do not have our own subsidiary, we work through local representatives. And sometimes the contact is made in the geography. In Kenya, we are trying to organize 1,000 farmers, build a couple of training centers, and sell to them drip irrigation, fertilizer, seeds and so on. So, it’s a challenge because it takes time, and it’s very difficult to organize farmers — farmers are usually very conservative. We work through local representatives there, and we are doing some similar things in Mexico and Brazil.
But my platform within our organization is usually used to make the initial contact. We often are looking for more than one partner. It’s always better to build a business on personal connections, and I’ve been in this basically, with small intervals, since it started. I was here on the kibbutz when we started. I was a farmer; I used the first irrigation systems on the fields for which I was responsible. I know the product, and the issues, and the benefits. I think that helps. You’re always looking for a combination of personal contacts, but also being very professional.
We have made some good connections through our participation in the UN Global Compact (UNGC) CEO Water Mandate program, which we first joined in 2008. I think we are doing great things, and I personally, and Netafim in general as well, believe in all the values of the UNGC — transparency, not exploiting child labor, good corporate governance and so on. We wanted to keep profitable as a business, but we also want to be a good company in the ethical sense.
The main goal or joining initiatives like that is finding partners, making business contacts, based on common goals. We’ve made good connections with the IFC, with USAID, with the GIZ in Germany, and food and beverage companies. Most of the large food and beverage companies are very much concerned with sustainability and how they treat the planet. In the past, there was a lot of criticism about their behavior. They have changed, and they are now very much concerned with it. So, they are natural partners. And they are huge consumers of agricultural produce.
Is there an ideal partnership model?
An ideal partnership should include the government — federal or local; a financing organization, either a large international development bank or a local micro-financing bank; an NGO that is active and familiar with the local farming community; and other private-sector partners, who can be either buyers for the produce or providers of agricultural inputs like seed and fertilizer, and so on.
That is a very nice model for collaboration. The local farmer, an international financing institution, our company as the supplier of the technology and the know-how, and then the buyer of the end products.
My dream collaboration is to have a project like I’ve been describing, with all the partners, and with satellites — like a very large-scale project on growing, for example, chickpeas, citrus, mango, bananas and so on, working with local government, NGOs and large buyers. And then, around this project, I would like to have thousands of small-scale growers. By that I mean when employees of the large farm go to their homes in the village in the evening, they would have a half acre or quarter acre vegetable field of their own where they can grow produce to sell to the project hub or in the market. This is my dream.