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Donnie Smith – Fortifying the Future through Sustainable Agriculture

April 29, 2021

Former Tyson Foods CEO, Donnie Smith, led the company to four consecutive years of record profits. After retiring from his position, Donnie is passionate about making the difference in other people's lives through sustainable agriculture.

Donnie Smith may be retired from his former position as CEO of Tyson Foods, but he remains just as busy addressing food insecurity and empowering farmers and communities to create a more sustainable future. Listen as he shares the passion behind his work to foster entrepreneurship and education through the African Sustainability Agriculture Project, and the lessons he imparts on other business leaders who want to make a positive difference.

The following is an edited transcript of the Ag Future podcast episode with Donnie Smith hosted by Tom Martin. Click below to hear the full audio or listen to the episode on Apple Podcasts or Spotify.

 

Tom:                          I'm Tom Martin. And we're joined by Donnie Smith, former Tyson foods CEO. Under Smith's leadership, Tyson achieved four consecutive years of record profits, multiplying stock value 6 times in 7 years. In 2014, Smith and his wife, Terry, pledged $3.2 million to the University of Tennessee to establish the Donald and Terry Smith Endowed Chair for International Sustainable Agriculture. And then in 2018, the Smiths funded the Smith Center for International Sustainable Agriculture at the University of Tennessee Institute of Agriculture. So, we're going to focus on what's keeping Donnie Smith busy these days. And you'll soon hear why it’s a fitting conclusion to our purpose-driven business series. Greetings, Donnie Smith.

 

Donnie:                      Hey, thanks, Tom. It’s good to be with you today.

 

Tom:                          And talk about purpose driven! That would seem to describe your current work around sustainable agriculture in countries on the African continent. I've heard you speak about this, and it’s very clear that you have a genuine, deeply felt passion for this work. What drives that passion and what has drawn you to Africa?

 

Donnie:                      Honestly, Tom, I can't ever remember not being fascinated with the African continent. And then later, you know, in my career at Tyson, let’s focus in around about 2010 or so. I think God just laid a burden on my heart and said, you know, “I've trained you in culture, production, logistics, you name it. And you know, it’s time for you to take what you've learned through this— at that point 20 something year career at Tyson— and go employ that somewhere on the African continent.” And so, there's just been a passion in my heart for the African farmer and helping them to try to compete on the world stage and get past subsistence farming and actually make farming a commercial endeavor like it is here in the U.S. and in other developed worlds.

 

Tom:                          Africa accounts for a significant proportion of the world population growth that’s expected in the next 30 years or so. How significant and what are the implications for Africa and for the world for that matter?

 

Donnie:                      You know, I call what you're talking about the grand challenge between now and 2050. So, if you’re a young person just entering the workplace listening to this podcast, in your working career, we will add about 2 billion people in the population and about a billion of those will inhabit the continent of Africa. So, you know, the continent of Africa is somewhere around, you know, 4 billion today. So, the population there is gonna double. Now, the interesting part of the challenge is because incomes will improve and organization will happen and several other socioeconomic events, we’re gonna need to produce about twice as much food as we’re producing today while restoring the resource used to make that food. I've heard several scientists estimate that we're using about 1.2 to 1.3 planet’s worth of resources to produce a planet’s worth of food. And hey, by the way, we’re still leaving about 700 or 800 million people behind because they're food insecure. So, somehow over the next 30 years, we gotta double food production and we've got to restore the planet to where we're only using 1 planet’s worth of resources to make that planet’s worth of food. And for me, the most concerning part is half of the population growth is going to happen only at African continent where we find a large portion of stunted children, you know, food insecure people, very, very low per capita incomes as compared to other countries in the world. So, that's a huge challenge for us and one that I'm dedicating the rest of my life to try to have some impact in.

 

Tom:                          What are some things that the developed world takes for granted that are just not present or available in many African countries?

 

Donnie:                      You know, and maybe my answer is gonna be more to scale, but there’s four things that immediately jump into my mind. Number one, a transportation infrastructure. You know, we take it for granted that you got trucks traveling on the interstate highways at 70 miles an hour carrying an 80,000 pounds plus. You know, railroad infrastructure, highways, bridges, all that stuff.

 

                                    And then when you get to Africa and you try to get around, it’s just incredibly slow and incredibly frustrating. The electrical grid and the energy infrastructure, you know, it’s not that it’s nonexistent. But you know, we’re in a developed world. We never worry about it. When we flip on the switch, there’s like 99.9% chance the lights are gonna come on. Yeah. It’s a 50/50 proposition in a lot of African countries. Pretty much everybody in America is powered. You know, in a lot of African countries, maybe half of their population is actually powered these days and the energy grid is just so unreliable. We never make it in Rwanda for a week, generally speaking for a day without power grid failing on us.

 

Tom:                          Oh, wow.

 

Donnie:                      And you know, access to capital, access to finance, you know, to finance the reoccurring costs, you know, those we take for granted here every day. And it is a very difficult proposition to find reasonably priced capital and certainly reasonably priced financing on the continent.

 

Tom:                          I think you've just touched on this a little bit, but I want to ask you. I know you began working in Rwanda in 2012. Is that right?

 

Donnie:                      Correct. Yeah.

 

Tom:                          Okay. Tell us about the conditions that you encountered when you began working there and what kind of work you've been doing in Rwanda?

 

Donnie:                      So, our work in Rwanda is inside of our foundation. So, African Sustainable Agriculture Project is a foundation that our family established about 2012. And so, the work we do is primarily focused on the poultry value chain, but not exclusively. You know, what we try to do ASAP— we believe the only sustainable form of agriculture is commerce. Right? If you can't make a business out of it and make a living doing it, then it's constantly going to require a gift from somebody. And you know, I don’t know how many billions or maybe even trillions of dollars have been given to the African continent over the last 30 or 40 years, but I can tell you that many of the important metrics haven't moved much. So, my belief is that donations aren't the answer. What Africa needs is direct foreign investment. It needs economic development. It needs capacity building, skills training, that sort of thing. And that’s what ASAP is all about. You know, our goal is to build capacity among African farmers, teaching them the skills they need, the leadership they need, financial skills they need, enabling them where we can in a very low cost way to be able to begin an enterprise, largely in our case a poultry enterprise. So, in Rwanda today, we have a feed mill. We actually opened the first commercial feed mill in the nation of Rwanda in 2014. Now, think about that. Before 2014, there was not a commercial feed mill operating in the country. Today, there’s 4-5. I mean that’s 7 years ago. Right? It's not that long ago.

 

Tom:                          Right.

 

Donnie:                      We also have a table egg farm producing table eggs. And then we are in the beginning processes of— We did a project with University of Tennessee and USAID to pilot whether or not we could establish a broiler business. And the pilot has ended and we’re now in the beginning processes of standing up a broiler business to produce broiler meat. So, that’s our work in Rwanda. Again, that’s all inside a nonprofit. Now, let me say this. Each of those three businesses that I mentioned is a registered for profit Rwandan business, keeping to our principles at ASAP that you have to have a sustainable profitable business to really say that you're doing sustainable agriculture. One of the problems we have in poultry is the high price of corn and soybeans, which make up about 70% of the cost of the feed or maybe more, which is about 70% of the cost to produce a chicken. And so, understanding that, I'm involved in a farm services business that is working on a seed reproduction.

 

                                    You know, finding more efficient ways to do sustainable conservation agriculture at scale, which we think is a key to being able to get the input prices low enough to be able to grow animal sourced foods, chickens, you know, you name it, at a price that’s affordable for a large portion of the population like we enjoy here in America today. So, besides the philanthropic work though, I'm also commercially involved. Tyson Foods own the chicken breed called Vantress. And Cobb’s largest distributor on the African continent and their oldest distributor was the Irvine family out of Zimbabwe. And I have partnered with the Irvine family to help grow that business outside of Zimbabwe in sub-Saharan Africa. We’re basically a day old chicken feed supplier, which is critical to having a poultry infrastructure that’s viable on the African continent. So, you know, I’m not only philanthropically involved. I’m also commercially involved. Again, it goes back to my commitment. I will spend the rest of my life trying to produce affordable food on that continent.

 

Tom:                          I have to say that African Sustainable Agriculture Project works out to be a great acronym, doesn't it? ASAP.

 

Donnie:                      It does. ASAP. We gotta get this done as soon as possible.

 

Tom:                          Appropriate and clever there. So, what sorts of skills were needed when you arrived there that weren’t there and how have you helped people acquire them?

 

Donnie:                      So, poultry before we arrived, there was a general idea or mindset that you could not raise modern genetics successfully on the African continent. You know, too much disease. You needed to have the ancient breeds and what I would call yard birds or yard chickens. You know, you had to use those. And you know, learning what I learned about genetic potential and all of that during my Tyson days, I just felt in my heart that wasn’t true. I mean there are certain principles that need to be employed. You need to meet the chicken’s needs. Feed, water, safety, health, biosecurity, those sorts of things. And so, I just felt like if we could meet those needs for the bird, we’d be successful. And sure enough, over the 3-year pilot project with USAID and University of Tennessee, we have some of our African growers who are growing 100 chickens at a time at 7,000 feet of altitude in communities you’ve never heard of with no electricity, etc., that have performance that rivals a chicken grower in the U.S. So, it can certainly be done. So, helping African farmers understand that the poultry rearing skills has been part of it— but it's also important for the people that work in our companies— I found a deficit in problem solving and critical thinking skills. There's just this underlying tone that “Okay. Well, that broke. That won't work.” Well, no. “Okay. It broke. Let’s fix it.” “I do not have any tools to fix.” “Sure you do. There’s something around here we can use to fix that.” And so, we have spent a good bit of time helping the folks that work for us understand that things are gonna happen. But when they happen, that's when it takes our ingenuity to figure out an answer to whatever problem we're facing and to do fairly quickly. So, working with our team on— and By the way, our grower’s, our farmer’s, you know, critical thinking and problem solving skills has been very important. Of course, you know, if you’ve got an American owner, we've helped them with English. And that's an important skill because English is kind of a universal language around the world and they are taught English in the school system, but they don't get to use it a lot. And you know, some of the finer points of using the English language— So, we do English training as well. That's just a small sample. But you know, one of the main things that I think is beyond technical skills is we're trying to help develop leadership skills. You know, how do you get the most out of people? How do you problem solve and create opportunities for people?

 

                                    How do you get a group of people to stay engaged and to do the right thing at the right time? Timeliness is a huge issue on the continent. And so, we learned some lessons from our friends at Foundation for Farming and they have a system that they use and you do things on time at standard and with joy without waste. And so, if you take those 4 principles and you get things done on time, you get things done efficiently, you do ‘em at a high quality, at standard and then with joy, that is an amazing tool set to use to help a group of people understand how to influence people beyond their direct span of control.

 

Tom:                          That is a really tough and ingrained trait to transform, isn't it, to go from—

 

Donnie:                      It is.

 

Tom:                          …”can’t do” to “can do.” How do you persuade or influence people who've been under that kind of mindset for generations to change?

 

Donnie:                      Yeah. Well, I learned from some early mistakes. I was way too quick to bail my team out and just send more money. And over the last year and a half, I figured out that my heart to help was becoming an enabler of bad behavior. You know, this will sound a little rough, but the end result is really important. And it’s practically a parenting skill. You know, when our children are doing something that we don't want them to do, we correct them, and we instruct them in the right way to do it. And you know, there are certain consequences if they persist in bad behavior. Right? And so, over the last year and a half, the change that we've made is— I've said “Look, guys, I have provided you with ample capital to be successful. You guys have made some bad decisions or, you know, let things drop and then the country manager has to figure out how to fix these things. We’re gonna change that. And you're gonna run— You are a registered Rwandan business and you're gonna run like a registered Rwandan business. And if you run out of money, then you're going to fold up shop and be bankrupt.” You know, that sounds harsh and rough, but let me tell you what they did. In our feed operation, they cut their cost by 50%.

 

Tom:                          Wow.

 

Donnie:                      Their operating cost. Because they knew if they didn't, they weren’t gonna have jobs. And now, our feed mill is profitable, our egg farm is profitable. We have a light at the end of the tunnel so that our little broiler business is gonna be profitable. And it all came when I quit enabling bad behavior. And so, you know, creating an atmosphere of reality where we really are a business— And you know, as a feed manufacturer for example, you know lots of people that go out of business because they don’t run good operations. Well, you could join them if you don’t change. Now, you know, for you, we have access to expertise at Tyson. You have access to expertise to a Fortune 100 CEO. You have every resource that anybody in an agricultural business in Rwanda would want that you can tap into. But you know what? It’s your business and you have to run it. And I tell you, you know, I love ‘em, but I was hurting them by not providing that commercial entrepreneurial environment where you have to make it or go do something else. And it has been a significant change in the culture. You know, communication was terrible. There was a passive communication style where this is broke, but I’m not gonna say anything about it. But if they asked me about it, I’ll tell ‘em it’s broke. Well, that’s not the way to run a business. You know, if something breaks, you tell everybody. I mean “How can we fix this? I need your help.

 

                                    This has to be fixed, etc. etc.” And our team has made the junk from the jump from this passive and communicative “I’m just here to earn a buck” to “No, I own this business. And in order for us to be successful, I have to communicate with my team members and I have to be part of the solution, not just a noticer of problems.” And I tell you, it is so fulfilling to see them be successful. And you know what? They know they’ve changed and they know that the cultural change has been a part and a big part of their switch to profitability, which gives them some financial security for the future. It’s been awesome.

 

Tom:                          It sounds to me, Donnie, as though what you have brought to the people of Rwanda, those that you’ve worked with, is a larger sense of purpose than just earning a buck.

 

Donnie:                      Oh, definitely. Yeah. You know, we talk all the time about— Let’s take our little broiler business. So, what I do, ASAP provides basically a zero interest loan for about 3 years to build the coop and give them equipment. And then every batch of chicken, they pay back roughly 1/15th of the cost of that coop. But after they buy it, it's theirs. And you know, they have a capital investment on their farm that frankly could be leveraged. Right? And they could get a loan based on that, etc. And so, it provides them kind of a network opportunity that they didn't have before. But then what has happened is— The growers we work with are desperately poor. Our average household is about five. Our average household income is about $0.85 a day. Now, let that sink in. $0.85 a day household income for a family of five. These are desperately poor people. Now, when we bring chickens to ‘em, then they are able to double and sometimes triple, in a few occasions quadruple, their income. And you go “Okay. Well, great. They went from 85 to above 90.” Woah, woah, woah, woah. Yeah, that’s true financially and factually, but what if somebody doubled your income? Right? That's a big deal. And you know, what they do is— and we help ‘em a little bit, but they get this instinctively. The first thing they do is pay school fees and get their kids in school. The second thing they do is they buy their insurance. And the third thing they do is they always start another source of income. Now, it may be going in with somebody or a couple of other people and buying a dairy cow and just praying every day that every calf she has is female, right, or buying a few goats and starting goat farming or getting a sewing machine and just sitting on their front stoop and sewing clothes for people in the neighborhood. But they use the capital that they earned through poultry production to earn more money and earn more income, which is just phenomenal. And so, you know, I’m kind of going back to your question. I say that. I say this. You know, what we’re doing is in essence providing economic development through agriculture and that can change the country, and we hope it does. Right? And that’s our whole approach. You know, there's an old saying, “You can give a man a fish and feed him for a day or teach him how to fish and feed him for a lifetime.” You know, what we’re trying to do is teach them how to make money using agriculture as an income source.

 

Tom:                          Talk to us about how this work and these projects have empowered women in Rwanda.

 

Donnie:                      You know, it’s great. So, my managing director, I call her the CEO of everything we do in Rwanda, she just turned 30. She's a graduate from the University of Arkansas here locally. Phenomenal. Katie's wonderful. So, let’s call her the CEO. The COO is Rita Nchuti. I think she’s 30. Maybe 31. You know, Katie had experience in environmental and poultry science at the University of Arkansas. Rita was fortunate enough to get an education in the U.S. and then she had a couple of internships at Tyson to get exposed to the poultry business.

 

                                    And honestly, Tom, you know, over the last 7 years or so, we tripped over every stump in the field, you know. We’ve learned all our lessons the hard way. But these two ladies, you know, they’ve turned around a business that was in a very difficult spot and then probably half of our chicken growers are females, most of which are single parent females. You know, raising chickens and doubling their income is giving them an opportunity that would be hard to come by any other way. And you know, a lot of the agricultural workforce in Rwanda are ladies. And we feel awesome about giving an opportunity to create a source of income that really doesn’t take time away from other things that they could do. You know, the poultry coop takes a few hours, but it’s kinda spread through the day. And so, if they have other things to do whether it's, you know, make clothes or work in the fields or whatever it may be, they can do that and it's not cannibalized by poultry production. It's all incremental income. We have seen so many testimonies of how sometimes young African women and certainly families that have been impacted in a significant way— And there’s kind of two components there. The other is the economic development part. Their income doubled or tripled and now they've created, you know, other income strange that have them in a better spot and will continue on, but there's also— I don't know what it is. It’s fulfillment. It’s pride in knowing that I have learned to do something. Yeah, I got some help, but I’ve learned to do something that I can support my family with for the rest of my life and maybe the rest of their life. And I have a skill that not many people in my country have. And I have opportunities that not many people in my country have. So, there’s a fulfillment— I don't know— pride, whatever that is that I can see the look in people’s eyes that “Man, this is making a difference.” And by the way, you know, COVID has been very difficult on us over the last year. You know, a lot of the poultry sector was supported by restaurants and hotels. Of course, travel has been severely constrained and restaurant and hotel businesses have just been decimated. And so, you know, our biggest need today is pretty much demand. Right? And it’s gonna be a while. You know, some of these countries it’s gonna take a while to recover from such a severe economic impact. But you know, we’re committed. You know, I think that we have found ways where we can produce economic development in a way that also helps nutrition, you know, animal source, food, eggs, chickens, whatever. So important to pregnant and lactating women and to preschool children, that sort of thing. So, when you combine all that, it’s hard for me. It’s hard for me to think of a better way to be spending my time.

 

Tom:                          Let’s turn to your experience in business leadership and I’d like to pick your brains if I may and ask you to share some insights about this. What makes your shortlist of dos and don’ts for a business leader?

 

Donnie:                      That’s a great question. So, here’s what I’m gonna do. If you would go out and Google Donnie Smith servant leadership, there will be a few 30-35 minute podcast, or YouTube videos, or whatever where I talk about the way I think about leadership and particularly servant leadership. And I would just encourage your listeners to go do that and we talk about what's in the head, the heart, and the hands or what are the habits of servant leaders that are really impactful leaders. But you know, a couple things that I would maybe highlight here today, is it’s really about them. It's not about you.

 

                                    You know, God gives us the opportunity to impact other people and to be involved in their lives. Folks spend about, what, a third of their life in the workplace. And you know, as leaders, we're providing the environment in which most people spend most of their working life. That’s a big deal. That’s a huge responsibility. And so, it's incumbent on us to make that environment engaging, encouraging, to develop the people and give them— I would call that empowering. You know, giving them the skills that they need to be able to do everything that they have the potential to do. And there's a lot that goes into doing that and that’s a little about what I try to crack open in that video. So, you know, gosh, I could go on for hours about, you know, what I think about leadership, and things you ought to do, and things you ought not to do, but that’s probably the most efficient use of our time today.

 

Tom:                          Donnie, you could be comfortably retired, digging your toes into some nice, warm, sandy beach someplace. What drives you to instead put your all into this work?

 

Donnie:                      Yeah. That's a good question. You know, I was actually talking to a fellow over the weekend that is basically doing what you said. I mean he’s fishing, and hunting, and hanging out. You know, Tom, I don't really look at what I'm doing as retired. I'm looking at it as reloading. You know, I don’t see any biblical evidence that God is through with us when we quit earning a paycheck from a particular company. I think God has a purpose for my life and I think a significant part of that purpose has revolved around, you know, what I can do to take the skills and the lessons I've learned through working a lifetime anyway in the poultry industry and then go deposit that in a place that desperately needs that to be able to be able to better. And so, yeah, you know, I don’t even refer to myself as retired. I'm just doing another work and I am passionate about making a difference in the lives of people who I get the opportunity to influence whether that's in leadership development or whether that's in economic development, agricultural work. So, I don't know. Maybe that's a different way to look at it, but I tell you what. It is super fulfilling when you're talking to— So, here’s a quick conversation. So, I talked to one of our young growers. And I asked her. I said, “So, you know, you made 40,000 francs a month. What did you do with the money?” She said, “Well, the 7 or 8 years that we have been married, we have saved up about that much money. And so, we put that money—” So, think about it. In 6 weeks, they had earned as much money as they had saved in 6 or 8 years. Okay? So, let that sink in for a second. And then what they did is they went and bought a cow. Pregnant cow. And they took care of the cow, got her to calf. Thank God it was a female calf. And so, what they did is they took that to her sister. And her sister takes care of the calf. They bring the cow back to their house. Now, they’ve got milk. The country will go out and artificially inseminate it themselves. So, you know, now they got another pregnant cow and praying every day that it’s a female so they can continue to build their little herd. And they've improved their nutritional outcomes. You know, they've improved their economic outcomes. And it’s just so rewarding to know that Frozene— And you know, we don’t even talk the same language. But Frozene and her family will never be the same because God told me to take my chicken skills to Africa. Tom, that’s pretty cool. That's a great way to spend your life.

 

Tom:                          I would say so. Well, you know, now that you have experienced it for a while, what’s your counsel to others who are getting close to retirement? I mean we have this kind of mindset, don't we, where we hit a certain age and boom! You retire.. But it sounds like we're knocking down those walls quite a bit these days. Wouldn’t you agree?

 

Donnie:                      Boy , I sure hope so. You know, God and your company or companies over time Tom, have invested, you know, thousands and thousands of dollars in teaching you skills, you know, whether leadership skills or particular skills.

 

                                    And I just think— For everybody listening, look, think about two things. Think about, number one, what are you good at and what do you like to do? What are you skilled at? What do you enjoy doing? And then also then think about who in the world can benefit from that. And you know, there’s a verse and scripture that says, “To whom much is given, much is required.” And we certainly won the genetic lottery being born in America or wherever your listeners are. Right? I mean we are blessed. So, we have been given much. And I think, you know, from us, it requires something. And so, you know, we often get bogged down when we ask ourselves the question. Well, yeah, but what difference can one person make? Well, let’s reframe that question and let's say, “Okay, in what one person’s life can I make a difference?” And if you can, then you should. And I just hope that we don't waste the twilight, whatever you wanna call it, years of our lives fishing and hanging out on the beach. Hey, look, there is nothing wrong with going fishing. I love to fish. I live on a lake. I love lake life. You know, I love going to beach. I don't want you to feel guilty when you go and enjoy the life that you earned from those years of toil and like not at all. That’s a blessing and you should enjoy it. But, man, don’t make it all about that. Think about what you can do. You know, maybe you can’t change the world, but I’d guarantee you. You can change somebody's life. And by the way, you don't have to go to Africa to do it like I do. You go across town, or down the street, or somewhere, but there's somebody on this planet that can benefit from you, your heart, and your resources, and what you've been trying to do. And I just don't want you to waste that because, you know, man, the world needs folks that will jump in with both feet and say, “I don't know how much difference I could make, but I'm gonna make a difference to somebody. So, you all move over and let me in.”

 

Tom:                          That’s Donnie Smith, former Tyson Foods CEO and supposedly retired. But actually, he is busy as ever making good things happen for people and economies in Africa. Thanks so much, Donnie. We appreciate it.

 

Donnie:                      Thanks a lot. I’ve enjoyed it.

 

Tom:                          And that concludes our series on purpose-driven business. I'm Tom Martin.

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