The drive and need for Finance into Smart Agriculture
This article tracks the calls of COP 27 and 15 – Investment and Finance into Smart Agriculture. Some key themes were funding for developing economies, climate-resilient smart agriculture, biodiversity and pesticide reduction. Highlighting challenges and some solutions that are achievable,
The drive and need for Finance into Smart Agriculture by Jeffrey Levine, CFO at https://www.dreamvalleyglobal.com/ and founder of https://upgradingesg.com/, a leading marketplace for ESG innovation, providers and resources.
This article tracks the calls of COP 27 and 15 – Investment and Finance into Smart Agriculture. Highlighting the challenges and solutions that are achievable. Some key themes were funding for developing economies, climate-resilient smart agriculture, biodiversity and pesticide reduction.
I am penning thoughts due to my experiences as CFO of Dream Valley and working closely with its founder Dr Nimrod Israely, also the chairman of https://www.ibmaconference.org. This will be the first International Conference focusing on Business Models in Agriculture which will be held in Rwanda in March 23.
Dream Valley is promoting Smart Agriculture - based on the Israeli Agro Business – building bridges to the underdeveloped world.
So, where to start?
The oldest and most important occupation in the world is Agriculture. Smart Agriculture is the new Hitech. Smart Agriculture is the key to a new old lifestyle and employment and creating sustainable income in this changing world. Our inspiration is the Israel Kibbutz and Moshav, Israel Agro ecosystem. To this model, we add the concept of energy and water-independent Eco Smart Villages where people can live, work online and remotely and be part of an agro-eco-system which provides their needs and income with a healthier and more balanced lifestyle.
This article will look at some of the current themes. I am starting off by looking at the two recent COPS – COP 27 and COP15.
COP 27 – Among the conclusions and pledges, the following addresses underdeveloped economies and agriculture. There is a calling for Finance and Smart Agriculture.
1. The need for funding for loss and damage was finally acknowledged by richer nations
“COP’s progress on Loss & Damage was unprecedented particularly when considered alongside discussions on adaptation. The connecting issue is finance, including funding mechanisms, deployment vehicles, and finance mechanisms to support and accelerate private sector engagement. It’s no surprise that calls for reform of the multilateral development banks are getting louder, to increase finance flows to developing nations. While not easy, it could unlock cold capital and take on project and currency risk that currently holds back private and national level finance due to their risk requirements.”
Steve Varley, EY Global Vice Chair, Sustainability
2. Food systems and agriculture have finally come under scrutiny
“With rising food prices and extreme weather impacts, food has been the sleeping giant of the climate adaptation and mitigation agenda. The Breakthrough Agenda for Agriculture is a significant implementation win, with 13 countries endorsing a move toclimate-resilientt, smart agriculture by 2030. It will drive improved resilience and security through food production and supply chains and integrate a deeper understanding of water, soil quality, water and waste issues. The upcoming biodiversity summit in December, and the wider emergence of the TNFD standard for nature-related risk and opportunity reporting, will keep attention on action to protect natural capital’s capacity to create value for the planet, society and business.”
COP 15 – called for Biodiversity COP15’s message to the world: Invest $250 billion in nature or risk the consequences
“Despite ongoing efforts, biodiversity is deteriorating worldwide, and this decline is projected to worsen with business-as-usual scenarios.. The framework sets out an ambitious plan to implement broad-based action to bring about a transformation in society’s relationship with biodiversity and to ensure that by 2050, the shared vision of living in harmony with nature is fulfilled.” COP15 agrees to halve pesticide risk as EU drags its heels."
EU Target to halve Pesticide use
“In June 2002, the EU executive unveiled its plan to revise the bloc’s plant protection product framework, the sustainable use of pesticides regulation (SUR), the main vehicle to turn these targets into a reality. But these plans have not proven popular among member states, which have consistently raised concerns over the regulation.”
Over the last year, we – Dream Valley, have tried to articulate how to approach Investors. The above trends articulate our offering and concerns, but there is still something missing from the narratives. The livelihood of two billion people depends on farming. Many of these live in extreme Poverty and Hunger - UN SDG 1 and 2.
What is the Pain? 97% of global farmers are smallholders (550m people), but we consumers (supermarkets) can’t access their produce. The value chain from these developing economy smallholders to premium markets is broken or missing.
What is the Solution? Dream Valley Smart Agriculture is redesigning the value chain from underdeveloped economies’ small-hold farmers to premium markets. Dream Valley’s “secret sauce” is the combined farming know-how and crop protection management experience, which, when combined, substantially improve yield quality and quantity. Fixing the Value Chain by providing access to premium markets. Not only that, but eliminating 100% (not half) use of pesticides.
Key attributes underpin the Dream Valley solution:
1) Technology – Exclusive use of proprietary technological solution (Freedome) and protocol (Fruit fly Certified Trade Zone) suitable to effectively control the most significant group of pests for fruit and vegetable growers in Africa and Asia – the fruit flies. This is a cost-effective, no-spray or chemical solution that eliminates 99% of pests in a non-harmful way. The application of Freedome is required to be applied annually, creating certainty of recurring revenues. On top of this, Dream Valley provides small-hold farmers with the necessary technologies, farming expertise, and value chain services to achieve a high income from export-quality produce. It enables a point of entry for these Agtech providers (Crop Protection, water, optimal growing, picking and transport, Digital & Ai.)
2) A tailor-made dedicated business model for smallholders in emerging economies for marketing fresh, perishable produce to premium markets. Dream Valley capitalizes on its ability to produce, at a low cost, a high quantity of a high-added value fresh produce in the Global South and then sell it in premium markets for a premium price in the Global North. This is where the business gap is the greatest, and Dream Valley takes advantage of it. The financial model is one of increasing recurring income and certainty and offers an exceptional return on investment. This represents good dividend returns whose value will realized through an IPO at a high unicorn value.
3) Alignment of Interests – Dream Valley provides its services and technologies to subscribed farmers in return for full ownership by Dream Valley of their yield. Farmers receive their proceeds after sales and a deduction of service charges for the following year. Dream Valley is involved in the full life cycle from farming inputs to the shelf and provides a seal of quality and reliability in supply. This creates a model of certainty, and less operational and financial risk. The Business Model facilitates Micro Finance to these farms in a Fintech solution.
The key differential to other players is that we are just not looking to sell a product but remain committed and involved in the recurring lifecycle of the farm and produce. Farmers only pay full price when the produce is sold.
And what is missing is Finance and the awareness that Companies like Dream Valley can help meet the objectives of Cop 27 and 15.
Dream Valley makes it possible to direct sustainable investment, Finance into Smart Agriculture.
This is also an opportunity to build bridges – for Israel to shine to bring fresh opportunities for the Abraham accords to impact the developing world.
There is talk of the Israel – UAE – India triangle. This triangle can uplift small farm holder Income in the most affected countries – Asia (India) and sub-Sahara Africa. The key to this is to start with the crop of the highest economic potential -Mangos.
In field tests and pilots in India and Africa (2017-2021), using Freedome reduced pest infestation by 99% and pesticide sprays by 100%. This achieved international renown for Technology and led to the founding of the Dream Valley Agro Business solution for small farm holders. Following the completion of the Freedome development for Asia and Africa, Dr Nimrod met with the Prime Ministers of India and Israel, Modi and Netanyahu.
Dream Valley ran a national-scale pilot with hundreds of mango growers (smallholders) over 2,500 hectares. As a result, in 2021, Senegal doubled its mango export to the EU from 12 M kilograms to 24 M kilograms, and growers doubled their income in one season.
Dream Valley has a solid pipeline of countries with strong business prospects - Ghana, Rwanda, Togo, Ethiopia, Kenya, Nigeria, Mali, Senegal, India, Colombia. etc.). Dream Valley is ready to market and upscale its operation and activity.
Now is the time to revisit this opportunity for change.
Going into further detail – I want to highlight two key areas:
· The investment and business case
· Impact – Not only Environment but Societal
The investment and business case
Let us start by looking at the Agro income gap. The business potential is dealing with the massive income gap of small-hold farmers in developing counties whose yield and income is 1/50th of Western Countries. Hence, changing the situation and substantially increasing farmers’ income while creating a handsome profit for investors and value chain partners is THE solution to introduce.
With the Dream Valley Business Model, bridging this gap is possible, field-proven, and realistic. Dream Valley brings the best of Israel’s field-proven modern agriculture practices and technologies to developing countries – Africa, Asia, and Latin America. Dream Valley starts with Mangos, where it doubles the yield even in the first year and continuously increases $/€ income per hectare. DV addresses the biosecurity issues, overcoming export bans, using zero sprays, and no chemicals or pesticides damaging the fruit or environment. This increase in income allows the implementation of additional AgroTech solutions in the following years. There are 6 million hectares of Mango Fruit Trees with an average yield of 10 tons per hectare. This market business opportunity equates to approximately - €60 billion.
This yield is well below per hectare of the amount the Dream Valley Model can achieve - which is currently above 30 tons per hectare. In Israel, where Dr. Nimrod has been working with mango growers for 22 years, the yield per hectare is 50 tons. DV target for small farm holders is a conservative target of 12 tons per hectare. In the above illustration, 1 kg equals 1 Euro or 1 USD. Mango is Dream Valley’s first use case.
In due time, Dream Valley will expand this to citrus, grapes, and other crops where it can create added value by bringing fruits of higher quality to premium markets.
The result: A Unicorn Agro Business based on recurring real profits.
Dream Valley can substantially increase income representing a win-win for farmers, Dream Valley, and investors.
Impact – Not only the Environment but Societal
Dream Valley offers an alternative to current farming practices, Agro Business, and the creation of diversity in the food chain with the ability to change poverty to prosperity. This, directly and indirectly, will solve most of the 17 UND SDGs. Higher Income leads to prosperity which in turns enables better housing , Water, Electricity (Solar) education and access to health services.
It also stops the drive to towns and encourages establishing stronger and more sustainable farming villages and communities. Dream Valley highlights that it is possible to “Accelerate the Transition to Sustainable and Resilient Agri-Food Systems” - To improve farmers’ livelihood by increasing quality production, free of bio and chemical hazards, grown in a safe, eco-friendly environment, to enable consumers to enjoy better and healthier food and life.
Dream Valley is promoting regenerative agriculture, reducing food waste, substantially increasing food productivity (quantity & quality) on current (and development of new Farms), Biodiversity and security.
Our emphasis on MORE FOOD production is far more critical and essential for global hunger and farmers' prosperity than FOOD LOSSES. Benefits to the consumer Improve buying experience with better-tasting products and increase the potential of more Fresh product purchases. Improves overall health by supplying a pesticide-free product. Improves feeling of contribution to reduce Waste (in a survey, some consumers said they throw ≈50% due to bad taste and smell). High-quality mangos will prevent waste and increase satisfaction.
Creates a positive effect for Consumers - increase awareness of the precise origin of the produce and their contribution to farmers’ livelihood Summary of Environment Impacts Reducing the use of harmful sprays and pesticides
Reverse the decline of fruit trees planted around the world caused by pests.
Reducing food waste – preventing physical destroying the wasted produce caused by pests.
Increasing Food Production on available Farms
Encourages the establishment of new commercial fruit farms = Increased Food production and biodiversity
Carbon Extraction/sequestration - 50% of Mango Crop is discarded because of Fruit Flies – The adoption of the Dream Valley Protocol solves the problem – Reduces food waste and saves scarce resources and CO2. Carbon saving of approx. 4 tons per annum per hectare of CO2 equivalent to one car
The adoption of the Dream Valley model can play a vital role in the call for action of the UN global compact organization’s call for nature-based solutions to address climate change.