Bill Gates: If you can help farmers grow a lot more, that's a fantastic thing.  Most of these farmers don't have very good seeds, and they can't afford fertilizer, and they don't get much advice about what to grow and how to grow it.  So the upside for African agriculture is it's possible to triple productivity. So figuring out how a foundation can come in with pretty modest amounts of money and get that productivity up, that's our dream. One thing we do is we help crop research. We help them create better seeds. But then, trying to get it to these farmers, particularly the very poorest farmers. If you're not careful, if you improve things, the wealthy farmers near the cities will be the primary beneficiaries. So asking people how much of your output they have to consume themselves, and understanding as the years are good and bad, do you have years where you have to eat 100%, or where you're actually not even getting enough?

John: Agriculture is weird because it is a market, it is a capitalist market, but it's also one that, you know, in the US, we provide what amounts to direct assistance with crop insurance. It's a weird market. It's different from other markets. In that way, it's a little bit like health, which is also kind of a market, but also kind of not.

Bill: Because you want people to get enough food, because farmers are politically influential, you're right. Even in rich countries, where it's only employing 2% of people, the prices are very distorted. In poor countries, even more so, because there are some true market failures, like who's gonna build storage, or who's gonna provide credit.

John: If A) you didn't make enough money last year, or B) you spent all of it, then that becomes impossible. So is one of the ideas of this cooperative to try to even that out, so that that capital--you have that capital going into each season?

Bill: Yeah, that's a huge market failure, is that typically, banks won't take the credit risk that they should, because they're going to have a problem if, let's say, there's a drought that year. That bank could literally go bankrupt. So it's not uncorrelated risk, it's correlated risk that all your borrowers, their credit is what they grow, and bad weather could make every single one of them unable to repay that. Teaching people what seeds to use, the idea that if you buy hybrid seed instead of using your leftover seed, that that's a huge payoff.  It takes a while for people to be used to that. If you happen to do that the year when the rain doesn't come, you're gonna be very sorry.

John: Right.

Bill: ...because you're gonna have this debt that you may never be able to pay off.

John: Can foundations, can we really insulate against that risk?

Bill: Well, the Mexican government has done cash support, and they can adjust that based on whether the weather's been bad or good. If the government does these things well, it essentially can come in and play an appropriate type of crop insurance type role. There is this idea of micro-insurance, you know, on your cell phone, learning what price you should get, getting more advice, even being able to take a photo of something and having somebody say, you know, what's going wrong with your plants. The only thing working against these farmers is climate change. Every factor is working in favor of farmer output, self-sufficiency, better storage, you know, amazing seeds, particularly if we can use advanced techniques, but climate change is working against them. So mostly, it's a positive story.