9:06am

Mon October 28, 2013
The Salt

Buffett Family Puts Money Where Their Mouth Is: Food Security

Originally published on Mon October 28, 2013 1:06 pm

Oh, what a job. You've got $3 billion to address society's most intractable problems. So what do you do?

If you're philanthropist Howard G. Buffett, son of famed investor Warren Buffett, you set a deadline: 40 years.

And you move at "fast-forward" speed (that's the way Warren describes his son's pace) to steer the most vulnerable people on Earth towards a future where food production is efficient, plentiful and affordable.

Warren Buffett, Howard G. Buffett, and grandson Howard W. Buffett sat down to talk with us earlier this week about their new book, 40 Chances: Finding Hope in a Hungry World. Howard G. Buffett wrote most of the book, but his son, Howard W. Buffett, contributed several chapters.

In the foreward, written by Warren Buffett, he describes his son Howard G. as the Indiana Jones of his field. And as we've reported, Howard G. — who is most at home when inside the cab of a big ol' tractor — has lots of ideas about how we can feed more than 2 billion more mouths by 2050.

Among his many conclusions: Africa needs better seeds; fighting the drug trade can influence food insecurity; and more fertilizer isn't always the solution to maximizing farmers' yields.

Following are excerpts from our conversation. They have been edited for brevity and clarity.

ALLISON AUBREY: Howard G., You are passionate about finding solutions and I'm wondering if you and your son have any differences in the solutions you see going forward ?

HOWARD G: I think we're pretty much on the same page. The whole concept behind Forty Chances is really a mindset: If everybody thought they had to put themselves out of business in 40 years, you had 40 chances to succeed in what your primary goals are, you would probably be more urgent and you would be forced to change quicker. You can't just stick with something that doesn't work. And we stuck with some things that don't work for a long time.

AUBREY: And what's an example of that?

HOWARD G.: Well, you still find a number of NGOs, non-governmental organizations, that continue to spend huge amounts of money on projects and we found out — and we did that, actually, for quite a while we spent plenty of money on it and we just learned that if you want to change big problems, you have to change them with scale.

And we also learned something that I really didn't want to engage in for quite a long time, which was advocacy in terms of policy change. We've learned that project by project, you can't change millions and millions of lives. And it's ineffective in terms of making a huge difference if you've got ... bad polices. [They] will defeat good ideas and good people. So there isn't any choice in our mind today that we have to engage in advocacy.

AUBREY: Can you give me an example of something you would advocate for in terms of policy change?

HOWARD G.: Yeah, we don't have the kind of farm labor we need to do two things: one is to pick all the food and collect all the food that we grow, there's a huge amount of waste. Second of all, that waste is a great opportunity for food banks. And then we have to have volunteer base incentives to support a volunteer base to move that food into the food bank system. There's millions and millions of pounds of food that could be used for that, and a lot of it is good food. It's nutritious food.

AUBREY: Warren, when you listen to these kinds of solutions, does this make sense to you?

WARREN: It does make sense. And one thing you always have to remember about philanthropy is that in business, the market system tells you fairly promptly whether you've got a good idea or not. If you've got a product and people don't like it, it doesn't move and you've got to do something else.

In philanthropy, you can keep doing things that don't work over and over again. ... So I love the fact that Howie, as well as my other two children, constantly test their ideas against whether they really are working and have a healthy suspicion of anything that's proposed.

It's somewhat different from business, because in philanthropy you're tackling the very tough problems that have resisted intellect and money in the past. In business you're looking for something easy to do, maybe just a new improved product that will sell a little bit better than the previous one. So in philanthropy, if you're doing important things, you have to expect mistakes.

DAN CHARLES: There are a number things that get a lot of criticism in U.S. farm policy: biofuel mandates; arrangements for food aid to the third world; and farm subsidies, which have migrated into the form of crop insurance — some people say gold-plated crop insurance. Are those big problems? Do you subscribe to those criticisms?

HOWARD G.: On biofuels, I would say that there's an effort that I would support that moves away from the actual subsidization of biofuels. Biofuels can stand on their own merits at this point. And I think they have places where they fit well and make sense, and places probably where they don't.

We've had a couple of crazy policies on food aid. One of them being that you have to have 50 percent shipped on U.S. vessels. That is so archaic. It should have been done away with a long time ago. It costs the taxpayers money and it costs people who need the food. And it's really simple to understand that. That is pure politics, not in the interest of the people who are hungry and not the taxpayers.

On farm subsidies, your term 'gold-plated crop insurance' is a great way to say it. Crop insurance is probably one of the best ways to protect the downside in a very difficult business, but last year — and I know this factually, not because I've benefited from it, but because I know neighbors who did — they benefited more from the revenue from crop insurance than if they had had a good average crop. That's a gold-plated policy and it's not the right policy. Crop insurance should be a policy that keeps people from going broke, to make sure they can farm next year, but not to make them rich.

AUBREY: Howard W., issues of sustainability and stewardship of the land seem to be increasingly important to your generation. [Howard W. is 30.] From your perspective, what types of policies are needed to support issues of sustainability and protecting natural resources?

HOWARD W.: One of the most important policies, from my perspective and my own personal experience, has been the conservation stewardship program that the USDA has in place (CSP, for short). [This program] rewards farmers who have taken on new conservation-based approaches for water quality, for the water table, for their soil or for their air quality.

What's promising for me is that the federal government is now recognizing an actual monetary value of those improvement practices.

[In the book,] we have a specific chapter on a farmer in Northwest Iowa named Clay Mitchell. Clay has done an unbelievable job of improving the productivity of his farmland by 20 to 30 percent over all of his neighbors, and he's done it in a way that continues to build the organic material in the soil and continues to improve the environment all around him. And he really is a superstar when it comes to farmers. We need more leaders in the farming sector who continue to look at the value of their soil over time and what they can do to improve it, because it also has the return of increasing their revenue.

AUBREY: I'm curious about micronutrients. I'm wondering what your thoughts are on how to get food into people that's more nutrient dense.

HOWARD G.: I think the science will develop. It is developing. The challenge we have is a lot of the discussion immediately goes to GMOs, and it gets very confused about what GMOs are and what they aren't and how you provide solutions. ... But it's going to have to be done in a way that the knowledge is clearly based on evidence and science and, you know, there's this huge fear factor when it comes to GMOs.

Aubrey: What do you think feeds the fear?

HOWARD G.: I think the biggest legitimate concern is what will we have in 20 or 30 years as a consequence of GMOs that we don't understand today? There isn't anything today scientifically that I've seen that indicates that that should be a great fear. But I think also, it's not 100 percent clear, and that's where we have to rely on government regulation and government agencies to do the best job they can. To make sure how things are implemented allow us to adjust to that and adjust to what we learn in the future. It's pretty complex, and you have some very polarized opinions on it and different agendas on it and that makes it tough, particularly in the area of politics.

AUBREY: And Howard W., how do you see this issue of GMOs playing out?

HOWARD W.: I'm not going to make a prediction on it. I don't feel it's my place. I use GMO crops on my farm in Nebraska and it's allowed us to remain productive and profitable in what we're doing. ... It's the issue where everybody wants to make a sound bite out of it and draw a quick conclusion and that's what does the damage. If we can really have an evidence-based discussion that is driven by science, then that is going to get us to the point where we can use this technology to save a lot of lives and improve a lot of people's lives, and that should be what people care about. What's very irritating is the people that typically are throwing stones, either don't give other solutions or they are certainly not the ones who are hungry. This has got to be about solutions and not simply about attacking things. Solutions are feeding more people, having less people hungry. Solutions can't be, "Let's just stick with the status quo." The solutions are: How do we use technology in an informed way that is safe and help people?

CHARLES: There's one chapter, I believe Howard W. wrote, about NGOs and fundraising and how NGOs get in each other's way. Are NGOs really destructively getting in each other's way, and is there a better alternative?

Howard W. Buffett visited Thailand in early 2006 and investigated the work of NGOs that had responded to the Indian Ocean tsunami. He saw a "dramatic disconnect" between what local people wanted, and what NGOs from outside the region had imposed. One consequence, he concluded, was tremendous waste of aid resources.

HOWARD W.: First and foremost, a lot has to change from the donor community. Those organizations and foundations, even the government, have to do a much better job of prioritizing the leadership that local communities can take in finding the best solution for themselves and creating sustainable, eventually income-generating [activities] for their people. It can be tough sometimes to channel that energy, but we have to constantly be questioning ourselves and always trying to do a better job, no matter what it is we're doing.

HOWARD G.: I've got to add — I was in Chennai, India, after the tsunami and traveled to two other coastal areas down south. They were rejecting aid for the most part, and I will tell you, they did a pretty amazing job, on their own, getting things organized. And it was interesting to see a country that controlled aid quite tightly and did an unbelievable job of responding.

AUBREY: I know there are lots of stories of social change, but how would you summarize the message of your book Forty Chances?

HOWARD G.: The message is: You've got about 40 years in your lifetime to achieve the best things, the biggest things you want to achieve and look at it like, in 40 years you're going to be out of business. So that means you've got to invest in the best people, you've got to understand that everything is local and everything is personal. But yet you've got to do it at scale, and it means you've got to take risks and you've got to be willing to fail.

HOWARD W.: From my own personal lens, I would say the biggest take away for me is that a single individual, when given the opportunity, can change the world. We have to keep that in mind and not lose hope in the face of so many challenges that we're looking at all over the globe. For me personally, I have seen that through what my grandfather has accomplished in his career, and I've seen that through what my dad has already been able to do now through the foundation. And if people keep that mindset as well, it will provide them the energy and the determination to endure through whatever challenge they are trying to overcome.

AUBREY: Warren, does this make you optimistic?

Warren: I am optimistic. I feel terrifically about what all my three of my children are doing in philanthropy. We've been fortunate to make a whole lot more money than anybody can spend intelligently on themselves, so the object is to spend it intelligently on the rest of the world.

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