Thursday, June 26, 2008

How To End World Hunger And Turn A Profit

The key is not trying to bite off more than you can chew. What is the simplest way to feed people that will disrupt the economies of famine-hit countries as little as possible?

The key is not to impose new infrastructure, but to leverage existing infrastructure.

Another key assumption: I'm only worried about food. I'll let Dean Kamen take care of potable water.

1) SUPPLY: The hunger fighting entity (HFE--could be government or NGO) establishes contracts to purchase bulk quantities of non-perishable, complete nutrition food. In other words, food bars. Contract with Powerbar, Clif Bar, etc. to purchase large quantities of bars at a low price. These commercial providers would do so to get rid of excess inventory, or to sop up excess productive capacity. You could also get bars made specifically for the program if they were less expensive/higher quality than existing commercial products.

2) DEMAND: The HFE would seek out distributors in the various countries around the world. They would sign non-exclusive distribution contracts. The distributors could then resell the food bars at whatever cost they chose. The HFE would sell bars to anyone who paid money.

Allowing distributors to make a profit lets you tap into existing distribution networks. Non-exclusivity prevents distributors from using monopoly power to soak the hungry. Nothing stops NGOs from buying the food and distributing it for free (though I expect for-profit firms to do a much better job).

1 comment:

Thomas Leavitt said...

It's a cute idea, but ironically, genuinely capitalist solutions that doesn't involve subsidies the undercut existing market players (local farmers) are available: a) increase productivity by introducing improved farming techniques compatible with available levels of capital and sustainable farming practices, and b) give every farmer access to better market information (usually via a shared village cellphone) so that they can capture a better percentage of the value they generate from existing middlemen (who arbitrage superior information)