Impact Investing—Food and Security in a World With Dwindling Resources
Global warming, population growth, and a lack of agricultural expertise and resources demand revolutionary solutions to prevent famine. Easy insurance for agricultural crops in remote locations and unique food technology enable the enhancement of the quality of lives of residents in developing countries
Electronic wallets and crop insurance by SMSSimon Schwall, founder and CEO of OKO and among the first to identify this need, has developed a simple and low-cost technological solution for selling insurance to farmers. "Many farmers in Africa run the risk of losing their source of income if their crops are damaged because of droughts or floods," he explained. Schwall was first exposed to the mobile payment revolution in Africa while working as a communications consultant in Papua New Guinea for a company that provided the health sector with micro-finance and life insurance policies via mobile network operators. "Alongside the business opportunities, this is also a way to change the lives of many people who don't own a bank account and to lower the risks they face," he explained. "I searched for a simple and affordable technological means that would enable me to sell insurance to these farmers. Mobile services such as ‘mobile money,’ satellite images, and weather data offer us the solution. Satellite imagery and weather data help to verify the data on the ground when a payment claim is submitted without the need to send an assessor to remote locations, thereby ensuring a process that is automatic, efficient, and cheaper." OKO was officially founded in April 2018. "We chose Mali for several reasons," Schwall said. "There are already about 4 million people in Mali using Mobile Money—one of the highest rates in Africa—and approximately 80% of the population work in agriculture. Other factors influencing my choice were the connections I had with people at 'Orange' who were operating in Mali and the fact that most of the country's crops are relatively low-cost. This all lowers the cost of the insurance compared, for example, to countries growing vanilla, a much higher-cost crop. I am pleased to report that although Israel and Mali don't have official diplomatic relations, all the reactions I received were warm and supportive.” Mobile Money is an electronic wallet that operates without a bank account and that can also be used via SMS. There is no need for an internet connection or a smartphone; the "money" is transferred via a digital account operated by the mobile network operator. The price of the insurance is determined according to the farmer's precise location, the type of crop, and the size of the plantation. The farmer can send his details and receive a price quote via SMS. "The assistance we received from the Innovation Authority was very important," Schwall said. "I immigrated to Israel from France and participated in an incubator program for new immigrants run by the authority, through which I was accepted to the Grand Challenge Program. Raising capital for a company at such an early stage is very difficult, and the assistance and support provided by the Innovation Authority was therefore very significant for us in creating the actual product and in being able to recruit financing from additional sources. I am currently using some of this capital for R&D purposes in the cocoa sector in the Ivory Coast.” OKO's vision is to enhance the quality of lives of residents in countries where most of the citizens work in small-scale agriculture, on small farms that sustain a few families, and who don't have access to a bank account or to the financial system, either due to illiteracy or because they live in areas that lack internet coverage. "We do so by supplying an affordable and readily available safety net that has a double impact—an agricultural backup for the farmer's family in the event of drought or flooding, and the opportunity to develop the farm by receiving micro-financing from lenders who are reluctant to provide such finance without insurance. This is an incentive not merely for the individual farmer, but for the entire local economy," Schwall said.
2.5 billion people are already eating grasshoppersInsurance of agricultural produce is a good means of providing the world with food security, but this also requires new food sources or substitutes for foods that are gradually dwindling. This is where Israeli company Hargol FoodTech comes into the picture. Hargol has developed a method for mass production of edible grasshoppers that serve as a substitute and available source of protein. Dror Tamir, the company's founder, still remembers his grandparents' stories about the swarms of locusts that descended upon the fields of Kibbutz Ma'anit, where he grew up, and the efforts of the kibbutz members to drive them off by banging on pots and pans. At the same time, the Algerian, Moroccan, and Yemenite families who joined the kibbutz would rush to collect the insects that they considered a nutritious delicacy. Tamir eventually became a serial entrepreneur in the food and nutrition industries and today serves as the founding CEO of Hargol Foodtech. "Grasshoppers are the ultimate solution for the expected future deficiency in protein, the demand for which will double in the years to come," Tamir said. "The existing protein sources are being rapidly depleted, have severe environmental effects, and require lengthy processing, and we are in the midst of a race to develop new protein sources that are healthier and friendlier to the environment." “Grasshoppers are nature's most efficient source of protein and have clear advantages—they possess the best nutritional composition in the animal world with over 70% protein and no waste, contain all the amino acids a person needs, and also Omega 3, Omega 6, zinc, iron, and folic acid. They are almost neutral in flavor and fragrance and their natural inclination to gather in large swarms characterized by high density makes them suitable for intensive cultivation. And if all that isn't enough: grasshoppers are also defined as kosher in the bible, and as being parve (neither meat nor dairy). Grasshoppers are also accepted as Halal ("kosher") by Muslims and the New Testament states that the disciple John ate grasshoppers with honey. Furthermore, ecologically, the cultivation of grasshoppers is 20 times more environmentally friendly and efficient than beef. This advantage is reflected in the lower levels of greenhouse gas emissions and water consumption, the use of small agricultural areas, and others," Tamir said. "There is substantial global demand for grasshoppers," according to Tamir. Two and a half billion people consume grasshoppers as part of their diet throughout Asia (primarily Japan, Indonesia, Thailand, Saudi Arabia, and China), in Africa (from South Africa through Uganda— where their price is double that of beef—in the east, all the way to Morocco in the north), and in Central America (mainly in Mexico).
The company has two basic products. The first is whole dried grasshoppers, for which there is a demand in various countries, including Europe and the US. "The Seattle Mariners baseball stadium in the U.S. serves a dish of fried grasshoppers that is almost always sold out," Tamir revealed. The second product is protein powder. "We grind the whole grasshoppers into a powder that we then sell as an ingredient for the food industry. Food manufacturers in Europe and the U.S. use it to prepare a wide range of products such as bread, beer, pasta, snacks, and others."
Hargol FoodTech recently won two awards from the Innovation Authority, one in the field of agricultural innovation and one in the "Challenges" program. "The Grand Challenges Israel Incentive Program is a joint initiative of the Innovation Authority and the Ministry of Foreign Affairs' International Collaboration Center and is part of the International Grand Challenges Program," Patricia Lahy-Engel, senior director of social research and development at the Innovation Authority, said. "The initiative's goal is to develop technological solutions for health, water, and food security challenges in developing countries. This incentive program encourages Israeli technological innovation in the field and the penetration into new markets, out of a genuine desire to help these countries."Tamir added: "there are a billion people in Africa and Asia suffering from protein deficiency who consider grasshoppers a delicacy. Our solution can supply them this food throughout the year, at better quality, and more efficiently, while at the same time reducing the price. We really can feed the world. Moreover, the idea developed together with the Innovation Authority is to design cages for the individual farmer so that he can increase his income and provide food for his family." The article was written in collaboration with the Israel Innovation Authority, the Israel governmental tech investment arm.