Pablo Borquez Schwarzbeck, ProducePay Founder
What’s the most undervalued but vital industry globally?
If healthcare comes to mind, think again, nearly 8 billion people worldwide have to eat, every day, to stay alive.
Farmers may not often be front and centre as some of the most important people on the planet, but any serious disruption to the food industry brings into sharp focus where the true value of land-tillers lies.
In June this year, the World Bank designated $2.3 billion to help combat growing food insecurity after the war in Ukraine dramatically pushed up food price inflation globally, triggering a food export ban in 21 countries as nations seek to shore up their own supplies – further exacerbating issues of food supply chains.
To compound the crisis, extreme dry and wet weather conditions – a key feature of climate change – have dealt further devastating blows to farmers and food security. From Europe to Africa, to large areas of southern China to Argentina and the US – dry weather and wildfires have wreaked havoc on farmers and left millions at risk of starvation. Meanwhile, apocalyptic floods submerged ⅓ of Pakistan and in Japan, 9 million people were displaced as a super typhoon battered the country.
But as the world reels from the compounding crises and governments and aid organisations rush to respond, the long-term security and resilience of farming industries themselves often remains on the sidelines.
It’s something Pablo Borquez Schwarzbeck, ProducePay Founder, has been acutely aware of as a fourth generation farmer.
“Farmers are often in a group that is largely taken advantage of,” says Schwarzbeck, “they take on 90% of the liability that comes with growing crops – it doesn’t really make sense for farmers to take all the risk and not get the majority of the return for that commodity.
“Most of the products that we consume come from emerging economies, and often the emerging economies are the ones that have the most fractured and broken or least accessible capital markets.”
After he finished college Schwarzbeck spent three years in a role that saw him travel extensively throughout North and South America to meet farmers: “That's where I really understood that the issues that I saw back home were the same issues everywhere,” says Schwarzbeck.
Agricultural commodities are often sold through an array of intermediaries which means only a small percentage of the profits remain in the hands of the farmers: “a lot of the farmers will fail to make the product available to the end consumers because they don't know where these consumers are ultimately – the clients that are willing to buy the product,” says Schwarzbeck.
He went on to start an MBA at Cornell University, but what he’d seen and experienced about the challenges facing farmers stayed with him: “I would tell my teachers about the problems and the change needed and they were like, ‘what about you? I said, ‘why not?’ They helped me feel emboldened.”
Schwarzbeck set up ProducePay as a unique fintech and digital marketplace solution to empower farmers with both the capital they need and the ability to cut out intermediaries and sell directly to the end buyer.
“We build strong technical infrastructure that connects farmers to the consumers and services to allow them to reach customers. As the alternative solution for farmers, we provide strong markets of consumption, strong pricing, along with the capital and the infrastructure to reach those clients – this we believe is the formula for maximising long-term yields.”
“We built a mechanism for traditional funds in the United States to reach farms all across the world. And by doing so we help the people that are best equipped to grow the fruits and vegetables to reach global consumers.”
ProducePay disrupts the agriculture market to create more resilience and profit for farmers. The proof is in the pudding: in just 8 years since launch, ProducePay has truly changed the nature of business for an astounding 700 farms that together produce about $4 billion worth of farming goods, helping them get the best return on their commodities.
By tackling inequality in the global agriculture sector, Schwarzbeck has dared go where many before him feared to tread.
When he first launched ProducePay in 2014, he struggled to “get the world to care about food and vegetable farming. They definitely do now, but when we launched the company, it wasn't sexy. People were talking about photo apps. That was all the rage.
“The startup venture and investment world now looks at agriculture with a very different light because they have seen what the world without access to food looks like. And it's very scary, right?
“During the pandemic where access to food was in question, it was our ability to ultimately help these farmers get the product to these places like Los Angeles that allowed us to make sure that we brought healthy food to the local communities that we work in.”
Schwarzbeck also had to win over a traditional industry typically resistant to change to get them on board with a technical network-based solution: “farmers have been taken advantage of for a millennia now, and in many ways, it makes them distrustful.”
But Schwarzbeck’s credentials as a 4rth generation farmer proved to be key to understanding and transforming the industry from the inside out: “Where I grew up everybody farms. My Father, my Grandfather, my Great Grandfather. I grew up thinking that farming was the center of the universe, and then eventually realized my world was configured by having come from a farmer-centric background. I see ties between how we work and the environment as being the same.”
As part of its support offer for farmers, ProducePay is launching a decarbonization program to help reduce the carbon footprint of farming: “this includes anything from how they irrigate, what they apply to the soils and ultimately how they till the land,” explains Schwarzbeck.
He credits much of ProducePay’s impact on intergenerational thinking: “a lot of what I've learned that drives the best behaviour not just in farms or sustainability, but in the legacy and daily rituals that you want your children to repeat is thinking intergenerational. Is this something that I would want my children to see me do?”
In the last 18 months, ProducePay has tripled its market share with a vast growing agricultural network across North and South America, and it’s set to expand into Europe with it’s unique solution to helping to derisk and decarbonise agriculture.
“We're very excited to kind of follow this through until we can bring a new reality that is largely available to the farming community across the world,” says Schwarzbeck.
In 10 years time, he’d like to be “sitting down with my daughter, who hopefully will be a fifth generation farmer, and telling her...once upon a time, farming was much more impaired because they lacked the technology, infrastructure and availability of resources.”
