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FROM RISK TO RESILIENCE: THE KIBBUTZ APPROACH TO ENDING FARMERS' POVERTY

 

"Like with pandemics, prevention is the best way to eradicate poverty"


 

Five hundred fifty million (550M) farmers suffer from poverty, making farming the leading global cause of poverty.


Countries, organizations, and individuals invest a fortune in pulling farmers out of poverty to see other farmers fall into the poverty trap.

 


THE SICK FARMER AND HIS FAMILY


Clayton Christensen's book The Prosperity Paradox tells a story about a family of African smallholder farmers whose husband was diagnosed with cancer.


The family spent the little money it had on treatments, yet the husband died, leaving the family without money and its primary provider.


Thus, the family sank into extreme poverty with no hope of recovering.


Like many smallholder families, this family managed to get along for several decades.


However, a single crisis event destroyed the future of the entire family.


It is not "unexpected" to experience crises during one's lifetime; they happen to all of us when we are least expecting them and ready for them. That is why they become "crises".


But, as we will see, farmers, and more so smallholder farmers, who often live in remote regions with few resources, are susceptible to a long list of unfortunate yet expected events (i.e., flood, drought, wrong business decision, pandemic, war, disease, work accident, sickness, etc.), each of which has the power to send them to persistent poverty.


Farmers spend a lifetime growing their businesses, which they may lose instantly to a single catastrophic event (natural, human, or local).


Without a solid financial backbone, such catastrophic events send farmers to poverty and often into extreme poverty.


Unfortunately, “catastrophic (unexpected) events” can happen several times in a lifetime.


Are farmers doomed to poverty if we can't prevent natural events like floods and droughts and eliminate wars, health issues, or bad business decisions?


 

You may better understand now why impoverished smallholders are risk aversion-oriented.


Remember the risk aversion attitude of smallholders when we delved into the next group - Israeli farmers.


See if you can understand why Israeli farmers are more inclined to take risks, which gave them the reputation of innovators.

 

 

WAR


This week, I traveled to the north of Israel, an area where, for eight months, the residents have been living in a state of war with shooting and rockets every day.


Eighty-five percent (85%) of the population abandoned their homes in this region and moved to safer areas.


Many people who live in cities can do the same work in any other city, e.g., teachers, doctors, lawyers, company employees, high-tech, trading, etc.


Can farmers take their belongings and move to a nearby region to practice the same thing?


Of course, they can't.


Farmers can't do anything without their land, which is unmovable and where their capital, years of work, hopes, dreams, and passion are invested.


My mother’s family had plenty of land in a village that once was Hungarian and now is Ukrainian. When she escaped the Nazis and arrived in Israel, she had zero possessions because she couldn't take the land, the house, and the farm with her.


 

POVERTY IS NOT INEVITABLE


A large number of Israeli farmers live in Kibbutzim.


Each Kibbutz community's income is based on multiple sources.


For example, the Kibbutz where I was born has many businesses, or “branches” (a branch = business center).


It has fruit orchards, open-field crops, cowsheds, and chickens.


Some members, working as teachers, nurses, etc., are paid by the government.


Other members work for businesses outside the Kibbutz, such as startups and high-tech companies. It also has a hotel (tourism) and a big glass factory.


For many years, my father had managed the deciduous orchards.


Under his management, there were years when the orchards were highly profitable; in others, they were poorly balanced or even showed significant losses.


My family and I were neither wealthy nor suffered hunger or poverty all those years.


This resulted from the Kibbutz's ability to balance expenses with total income by managing profits and losses across all resources.


This resulted from the Kibbutz's ability to manage the total profits and losses from all resources (due to the balance of its expenses based on its total income). 


From its inception, my Kibbutz, like all other Kibbutzim, has relied on multiple income sources.


So when (not if) one branch (business unit) faces financial challenges, the others compensate, and expenses are adjusted if necessary.


Using this risk management method, all Kibbutzim gradually achieved the lifestyle of the Israeli middle class, never rich but never poor.


Since the first Kibbutz was established (1910), this approach has ensured that Kibbutz members and their families have never suffered hunger or poverty.


Let me emphasize this: impoverished farmers who adopted the Kibbutz organization method never suffered hunger or poverty.


If this isn't a miracle, I don’t know what is.

 

 

THE INNOVATION ENABLER


My parents and their friends established my Kibbutz starting from nothing, or less than nothing, considering they were orphans, had no possessions, suffered little access to water, no roads and electricity, and were immigrants.


However, the Kibbutz risk management method enabled my parents to specialize in their work and do it with passion and curiosity, looking to reach the best results for the community.


My parents never worked out of constant fear of imminent poverty and hunger—not once!


When you are 100% confident in your business's stability and know that you will be fine even if something goes wrong, you are more open to taking risks with significant potential economic impact, like trying new technologies and methods and innovating.


Innovation is the key to excelling in any field, including agriculture. However, innovation is costly because it is risky, and you can expect to fail many times before succeeding.


While working in the Kibbutz orchards, I conducted dozens of experiments yearly.


Many of those experiments failed, but a few were highly successful, resulting in novel crop protection, growing, and management methods.


The knowledge from these experiments was immediately applied to the farm, although some ideas required further development before becoming fully realized.


Biofeed and Dream Valley are examples of ideas conceived while I was working in the Kibbutz orchards.


They took many more years of intensive hard work to develop into businesses that benefit many farmers.


This and much more were possible only thanks to the Kibbutz's unique risk management approach, which allowed me to experiment with nearly any idea I had in mind.


Innovation can grow when people's minds are free from fear of what will happen if they fail.


The Kibbutz risk management approach creates a place for free-from-fear minds to innovate, hence continuously increasing prosperity.


 

A PERSISTENT THREAT


Most global farmers live in developing countries that offer no support in cases of existential risks. Furthermore, these farmers lack community support during crises and are entirely alone.


They operate in environments without structured mechanisms for mutual support and risk mitigation, hindering innovation, prosperity, and happiness.


As a result, farmers in developing countries are often at a distance of "one error away from poverty".


As the Kibbutz model proved possible, we can establish a business-oriented risk management mechanism to prevent poverty and encourage innovation simultaneously.

 


UN SDG #1 - POVERTY


The United Nations declared the eradication of poverty as its first and most important goal among 17 Sustainable Development Goals (SDGs).


As I mentioned before, setting a goal of "eradicating poverty" is a mistake; the goal should have been "creating sustainable prosperity".


Regardless of how we define the SDG #1 goal, the simplest way to achieve it is by preventing farmers from falling into poverty.


This attitude to fighting poverty was embraced by the Israeli pioneers and leadership (from about 1850) decades before the state of Israel, starting from when the Ottoman Empire ruled the Promised Land, and no one could imagine them helping farmers.


In those days, there was no shortage of crises, including locusts, drought, malaria, lawbreakers, business mistakes, etc.


However, as long as there was no effective risk-mitigation method, the farmers and their financial supporters took little risks.


They took "risks" only in activities considered "safe" (e.g., supporting farmers with technologies and finance), yet they endured persistent poverty and suffering.


This situation continued for decades until 1910, when the first Kibbutz appeared and introduced a holistic business-social approach, including holistic business risk management.


As explained in the previous column, the Kibbutz is a business-social organization that, like any business organization, can exist only if sustainable or profitable.


What makes the Kibbutz even more unique is the situation in which “the workers” are “the owners” of this “factory”.


It is precisely because the workers and owners are one that Kibbutz members fully commit to sharing risks and successes, providing unlimited support to each other in good and bad times.


This couldn't be possible without an effective organizational "risk management" method.

 

  

THE CHAIN OF LIFE


If every day of a person's life is like a link in a chain, farmers' ability to achieve economic prosperity depends on the strength of the weakest link.


In places like India, where farmers even commit suicide due to dire economic conditions, this metaphor becomes painfully real (in 2022, 11,290 farmers took their own lives).


When a weak link breaks, the chain ends, leading to the tragic loss of farmers' lives.


While not all farmers resort to suicide when facing extreme economic challenges, this underscores that escaping extreme poverty can feel as daunting as tunneling through the Earth to its other side.


The future awaits the families of farmers who committed suicide or lost everything they have is gloomy with more bitterness of the extreme poverty medicine.


Hence, the first step to eradicating poverty is preventing farmers from getting there.


Fortunately, a trusted, field-tested path already exists, assuring farmers will never know the bitter taste of poverty.


That path is the “Kibbutz model”, which has been extensively used with hundreds of rural communities for over a century and has repeatedly shown that poverty can be entirely prevented.


The Kibbutz model proved to act as an effective “vaccination” against poverty.


Unlike commercial vaccination, the Kibbutz model is not a secret, though it still needs to be better understood.


That enables any country, organization, or impoverished community to use it free of charge.


The first Kibbutz, Dgania, was founded in 1910 by ordinary farmers with an ordinary "chain of life" who suffered poverty like other farmers in the Promised Land.


The model pioneered by Kibbutz Dgania illustrates a system where all members' "chains of life" are intertwined. Even if one chain weakens or breaks, the collective support ensures that the member and their family are safeguarded from harm or poverty.


This led to the undisputed and unprecedented fact that from the day the first Kibbutz was established until today, not one Kibbutz community (out of over 250) or member has suffered hunger or poverty.


Not one community/member suffered hunger or poverty.


Would you like this to be the case in your country?


Remember that when a community and its individuals do not fear poverty, their chances of achieving economic sustainable prosperity increase significantly.


This is precisely the experience of Israeli Kibbutz communities.


To this day, the Kibbutz remains a superior form of organization, effectively preventing poverty and fostering economic prosperity.

 

If you want to eliminate farmers' poverty and create prosperity, consider beginning with a community-business-oriented risk management mechanism.

 


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==> Dream Valley Fruit Export Program 2025 is now officially open for new exporters from developing economies who wish to export to Europe. Text me.

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Here are four ways you can work with me to help your rural communities step forward to shift from poverty into ongoing prosperity:


* Consultancy on rural communities' models: Why, What, and How, e.g., based on the Kibbutz and Moshav lifestyle models.

 

* Local & National programs related to agro-produce export models - Dream Valley global vertical value and supply chain business model and concept connects (a) input suppliers with farmers in developing economies and (b) those farmers with consumers in premium markets.

 

* Crop protection: Biofeed, an eco-friendly zero-spray control technology and protocol solution, is most suitable for developing countries.

 

* IBMA Conference - To learn, share, and practice novel business models: the IBMA 2025 conference theme is “Reshaping Agribusiness Models for Building Prosperous Rural Communities." Register now or contact me.

 

 

TAKEAWAY MESSAGES


Ø  Preventing poverty is the best way to eradicate it.

Ø  Smallholder farmers are highly vulnerable to crises that can plunge them into poverty.

Ø  The Israeli Kibbutz model uses diverse income sources and risk management to avoid poverty.

Ø  Community-level, business-oriented risk management is critical to eradicating poverty and fostering prosperity.

 

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More on the October 7th genocide in South Israel:

 

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"Mental and Economic Freedom Are Interconnected."

 

See you soon,

Nimrod



 






Dr. Nimrod Israely is the CEO and Founder of Dream Valley and Biofeed companies and the Chairman and Co-founder of the IBMA conference. +972-54-2523425 (WhatsApp), or email nisraely@biofeed.co.il

 

 

P.S.

If you missed it, here is a link to last week's blog, “Kibbutz, What Is Your True Nature?

 

P.P.S.

OPEN BUSINESS OPPORTUNITIES:

1)     Exporting fresh fruits from Africa to the EU under the Dream Valley regenerative protocol brand for the 2024 season.

2)     Joining the Nova-Kibbutz concept project or establishing a similar initiative in your region.

Kindly provide your background and credentials to receive tailored next-step instructions.

 

P.P.P.S.

Dream Valley is a field-proven disruptive business model based on the successful Israeli Model.

 

You can follow me on LinkedIn, YouTube, and Facebook. 

*This article addresses general phenomena. The mention of a country/continent is used for illustration purposes only.

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