KGS – Mexico Small holder farms

EXECUTIVE SUMMARY

KGS TECHNOLOGY JOINT VENTURE TO BOOST AGRICULTURAL PRODUCTIVITY ACROSS MEXICO

Mexico has experienced high levels of agricultural productivity in its large commercial farms. However, there remains significant opportunity to similarly enhance the production potential of smallholder famers in Mexico. Rural areas can gain through the adoption of modern technology suited to small farmers and substantially advance forward agricultural productivity while maintaining local cultural practices.

KGS Agro Group’s organic-safe, yield enhancement products can substantially increase crop production of smallholder farmers by up to 20%+, as demonstrated at farm sites in Latin America and hundreds of other locations globally. KGS has achieved success in Brazil in cassava, soybean, maize, coffee, rubber, vegetables and other crops ranging from 20% to 50%+ yield enhancement as well as improvements in protein. KGS has worked with leading independent research organizations in Brazil such as Emparn and supports future agronomist interns from the local university system. KGS Technology can be delivered by airfreight in a compact form and be implemented in an expedited timeframe to provide a large positive impact to farming communities.

KGS proposes to develop a Mexico Small Farm Technology Advancement Program to distribute yield enhancement technology to smallholder farms across Mexico. This technology has been approved for use in Mexico and has the potential to double the income of smallholder farmers. Farm and rural employment can directly rise as a result of the program. There is also great potential for small farmers to become drivers to agricultural growth of Mexico. It will greatly enhance the productivity of smallholder farmers and bring social and economic parity to the region. The Program is projected to cover over 70% of farm establishments in just 5 years, impacting the livelihood of over 15 million people.

AGRICULTURE IS CRITICAL TO RURAL MEXICO DEVELOPMENT

Agriculture is a very important sector for Mexico. While large commercial agriculture continues to reach new heights, the economic potential of smallholder farms is curtailed by constraints such as rising costs of factor inputs, adverse climatic conditions and increasing competition from low-cost imports. Smallholder farmers in Mexico have great potential to increase use of technology and boost agricultural production.

Despite the declining contribution of the sector to GDP, and the shrinking of Mexico’s agricultural labor force, about half of the rural population is employed in the agricultural sector in Mexico. Moreover, many unemployed in urban areas have migrated from farms and could participate in renewed agricultural productivity.

Income disparity and smallholder farm poverty remain a challenge in Mexico. Most people living below the poverty line live in rural areas. Two-thirds (66.4%) of all farms are under 5 hectares in area but they cover only 6.2% of the Mexico’s total farmland. Nationwide, 2.2% of farms account for 65.1% of the total area farmed in the country.

Less than 5% of all farmers in Mexico benefit from land possession of more than 50 hectares and most of the larger farms are located in the Northern region. The large majority of smallholder farms are located in the Southern region where they either produce solely for self-consumption or sell corn to those living near their farms. These smallholder farms follow traditional farm management practices and are mainly dependent on rain for irrigation.

AGRICULTURAL PRODUCTIVITY CAN HELP STEM RURAL POVERTY

Poverty in rural areas in Mexico is high and has been increasing. Across Mexico, 45% of the overall population lives in poverty. But in Mexico’s rural areas, poverty affects about 61% of the population. Rural poverty is a leading ‘push factor’ that is driving asset-poor rural farmers to sell off their land and migrate to urban areas, where many continue to struggle.

Yields of family farms are significantly lower than commercial farms due to diseconomies of scale. The productivity of commercial farms is greater by approximately 150% than traditional rain-fed smallholder farms. This sharp yield gap presents an opportunity to help small farms with modern technology.

There is the need to address the root causes of the continued economic marginalization of smallholders through a technological intervention that can increase productivity within the set up of traditional farm practices being followed by smallholder farms.

KGS SOLUTION – BOOSTING SMALLHOLDER FARM PRODUCTIVITY FOR SOCIAL AND ECONOMIC EQUALITY

Smallholder agriculture has great potential as a means of increasing rural well-being in Mexico. Improving agricultural productivity and food security will require significant financial resources and a concerted partnership between international funding such as USDA, USAID, IDB and IFAD, local commercial agriculture and corporate donors, technological partners, and local implementing partners in the region.

KGS Agro Group, LLC (KGS) has developed a revolutionary crop yield enhancing technology through 10 years of nano-molecular biosciences research. KGS product is non-toxic, organic safe and highly compact, making it simple to distribute. It has been proven effective in 200+ global field locations, with 20%+ yield enhancement potential in the impacted region. KGS has achieved regulatory approval in Mexico and has successful results with large commercial farming organizations in Latin America. Moreover, KGS has worked with NGOs such as the Clinton Foundation, which has tested KGS product in Rwanda and achieved over 50% yield enhancement in grains with smallholder farmers.

KGS Technology significantly enhances the immunity of plants and resistance to drought and other natural stresses, while greatly boosting yield. KGS also helps increase fertilizer use efficiency, thus helping to clean the soil and reducing input cost for smallholder farmers such as fertilizer expense.

KGS proposes distribution of the flagship product – GMX, to low income and subsistence farms in Mexico. The use of this product will greatly enhance income of smallholder farmers and bring social and economic parity to the region. It will enhance the country’s food security, reduce food imports and foreign exchange outflows, increase food exports and foreign exchange inflows, provide nutritional benefits such as increased protein, naturally benefit soil ecology, and help in the economic development of Mexico’s rural regions. KGS has additional technologies that can enable small farmers to pre-treat their seeds with proprietary plant enhancement products. This can be formulated under a cooperative structure that can empower small farmers to gain independence by encouraging the effectiveness of non-GMO seeds.

KGS proposes to start distribution of the product covering 1 million Ha of farmland. The product can increase average smallholder farm production by up to 20%+, greatly improving income levels by up to 100%+ for rural farming families.

KGS will work closely with the Ministry of Agriculture, Mexico, to develop a funding program in conjunction with international and local donors. First year funding of $50 million would be raised to achieve the desired impact. Grant funding could be further supplemented by micro-lending organizations. These can be gradually expanded annually with a goal of ending poverty and productivity losses in smallholder agriculture in Mexico over the next decade.

KGS is committed to the welfare of smallholder farmers and to ensuring food sufficiency in the poorest regions of the world.

KGS TECHNOLOGY – MOST OPTIMAL SOLUTION
KGS Technology provides an optimal solution:

  • The solution is quick to implement. KGS has readily available inventory of the product, which can be disbursed to smallholder farmers through the Ministry of Agriculture in Mexico and local organizations for the immediate upcoming season. As a result of our natural, nano-molecular biosciences technology, we can expediently transport enough product for 1.5 mn Hectares farmland. Therefore, the product can be disbursed within a few weeks to various provinces.
  • KGS product results in high yield improvements under stressed agricultural environments under natural conditions.
  • The product is easy to use, intuitive as a spray, requires minimal training and farmers can use it along with their existing farm practices, with no need for any additional equipment or changes.

KGS has achieved similar successes across 200+ field locations globally
including in Brazil, USA, India, Bolivia, Argentina, Paraguay, Uruguay, Peru, Malawi, Rwanda, Columbia, Ukraine, Russia, Jordan, Italy and China.

KGS has achieved great success and yield increases with large commercial farms in Brazil across major crops and with independent research organizations such as Emparn. In addition, KGS works closely with smallholder farmers across locations in many markets including India, China, and Africa. With the assistance of the Clinton Global Initiative, product trials were completed in Rwanda on maize and soybeans. Final results show increased yield on average of 59%. In Tanzania, we have conducted field trials on maize, wheat and tomato at Southern Highlands Zonal Research & Development center under the guidance of Ministry of Agriculture. Similarly in India, KGS conducted numerous field implementations on a wide variety of crops including soybean, maize, cotton and potato and achieved successful yield enhancement of 50 to 100%.

IMPACT

Mexico is among the world’s leading agricultural producer ranking first in avocado, lemon and lime production. However, in spite of being the second largest economy in Latin America, Mexico has extremely high levels of rural farm-based poverty. Against the large-scale commercial farming, smallholder farmers live under conditions of poverty subsisting in difficult conditions and degrading environment. Productivity growth for smallholder farmers needs to be stimulated and sustained as a key to inclusive growth and reducing poverty.

Below is an illustration showing how a smallholder corn farmer with 5 Ha of land can more than triple their farm income using advanced KGS technology. KGS technology can dramatically improve the livelihood of small farmers, their families, farm helpers, and their local economies.

This increased agricultural activity will benefit the rural and national economy. Cross- country econometric estimates in various studies show that overall GDP growth originating in agriculture is, on average, at least twice as effective in benefiting a country’s population as compared to growth generated in non- agricultural sectors.

KGS will bring efficient break- through biosciences technology that can rapidly drive same season farm productivity gains for smallholder farms. The Mexico Small Farm Technology Advancement Program funding can cover about 4 million smallholder farm establishments in just 5 years, greatly enhancing the income and quality of life for over 15 million citizens of Mexico.

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