A Buffett Turns to Farming in Africa


The Wall Street Journal
By Scott Kilman and Roger Thurow
June 28, 2009

Warren’s son Howard has quietly become a player in the fight against global hunger

After a meeting with farmers in Fufuo, Ghana, Howard Buffett stood up to shake hands, African style. He extended his right arm, marked with a faint scar from a cheetah bite, and then launched into a rapid combination of finger snapping and palm slapping.

The middle child of Warren Buffett is an unassuming Illinois soybean and corn farmer. But for the past four years, he has played a behind-the-scenes role in the global war against hunger. Given a small portion of his father’s fortune for philanthropy, he spends much of the year traveling through Africa, experimenting with ideas for helping poor farmers produce enough crops to feed their families and so lessen the continent’s food shortage. His foundation is spending about $38 million this year on projects such as developing a disease-resistant sweet potato, encouraging poachers to switch to farming, providing micro credits, and helping farmers market their crops to United Nations’ hunger-relief programs. Probably his most ambitious project under way would give African corn breeders royalty-free access to Monsanto’s biotechnology for drought-tolerant corn.

As the global economic downturn sets back decades of work to end world hunger, Warren Buffett’s son, Howard Buffett, takes on a surprising, little-known role on the front lines. Mr. Buffett travels from Ghana to Togo to Benin, trying to spread approaches to farming that he’s found successful on his Illinois farm. Scott Kilman and Roger Thurow report.

His father’s very public decision in 2006 to bequeath no more than a fraction of his fortune, then worth $40 billion, to his children’s foundations has put Howard on his unusual course. The famous stock picker opposes big inheritances; they coddle the second generation and concentrate wealth, he argues. Each of his children receives an annual donation of Berkshire Hathaway shares, which shrinks in size each year, for their charitable foundations. The sage of Omaha has never been to Africa and, of his son’s arduous lifestyle, says, “I would hate it.”

When Howard, 54 years old, was 23 he cashed in stock from his grandfather to buy a bulldozer to start an excavating business. What he really wanted to do was farm, but he didn’t have the money. His father agreed to buy a modest Nebraska farm for his son, but in classic Buffett fashion, he charged him market-rate rent.

Howard became chairman of a state agency aimed at encouraging the construction of ethanol plants in Nebraska and then won election to the Board of Commissioners that governs the county in which Omaha sits. Howard’s grasp of farm politics, as well as his last name, put him on the radar of Dwayne Andreas, the cagey chairman and chief executive of grain-processing behemoth Archer-Daniels-Midland Co. in Decatur, Ill.

Mr. Buffett joined ADM’s board and became a corporate vice president, posts that gave him a global perspective on agriculture as he began buying land for an Illinois farm. Mr. Buffett left ADM in 1995, upset about a price-fixing scandal at the company and joined a nearby manufacturer of steel grain bins called GSI Group. Soon he was off to South Africa to drum up business from its large grain farmers.

He traces his interest in fighting global hunger to his hobby taking photographs on those business trips in Africa. As he was photographing migrating wildebeest and zebra in 2000 from a rickety plane, trying to position his camera for a picture, he saw scars on the ground where poor farmers had used fire to clear desperately needed land. Mr. Buffett realized that he couldn’t protect Africa’s environment without first fighting its food shortage.

View Full Image
Melissa L. Hickox

Howard Buffett teaches farmers in a Burundi cornfield. Agriculture is the main livelihood for citizens of the country, one of the world’s poorest.

“I’m watching this thinking, ‘They are going to destroy the last forest,’” Mr. Buffett later recalled. “It was an epiphany for me: The hungry can’t worry about conservation. I realized you can’t save the environment unless you give people a chance to feed themselves better.”

The death of his mother, Susan Buffett, from a stroke in 2004 helped to crystallize his focus on the poor. It also gave him the means to make a difference. The Buffett children had always expected that their mother’s foundation would oversee the distribution of their parents’ vast wealth. She had long supported medical research, education, abortion rights and nuclear disarmament, and had encouraged her children to be socially conscious. She brought young Howard along when she went into Omaha’s housing projects to help a Cub Scout troop.

Her death at 72 forced Warren Buffett to confront how to start giving away his fortune. He settled on directing the bulk of his Berkshire Hathaway shares to the Bill and Melinda Gates Foundation. He trusted Mr. Gates, a Berkshire Hathaway board member and friend who played bridge with him. What’s more, the Gates Foundation had the infrastructure to handle a gift of such size.

On top of this, Warren Buffett promised each of his three children’s foundations annual gifts of stock initially worth $50 million. For Howard, the gift meant that the Howard G. Buffett Foundation, from which he doesn’t draw a salary, could increase its annual spending at least eightfold.

It was ordained that Howard and his two siblings would see the family fortune given away rather than have it to spend on themselves. His father, who lives far below his means in a modest Omaha house, has argued publicly that it does little good for society when children inherit great wealth by virtue of an “ovarian lottery.” The multiplier effect is far more powerful, the argument goes, if fortunes are used to help the less fortunate rather than to suckle a bloodline of trust funders. Warren Buffett went to Congress in November 2007 to argue in favor of the estate tax, saying it counters an unhealthy concentration of wealth. Of his middle child, he says, “he’s got my money and his mother’s heart.”

With one foot in American farming and the other in Africa, Mr. Buffett has developed his vision for African farming. With oil prices so volatile, he thinks few farmers in African villages should use the same type of high-tech, mechanized farming he practices in Illinois. A typical farm in the Midwestern U.S.—of the sort Mr. Buffett owns—is an investment of millions of dollars.

“It takes a lot of fuel to run my equipment. And for inorganic fertilizer. And pesticides. How can that be the right answer for someone who has the opportunity to start from the beginning?” Mr. Buffett says.

While many economists and anti-hunger advocates call for a Green Revolution in Africa, Mr. Buffett shuns the phrase because it refers to the agricultural boom that swept Asia in the 1960s and 1970s. Modern seeds as well as hefty applications of fertilizer and water caused Asia’s wheat and rice crops to rapidly swell.

Mr. Buffett believes that getting Africa to feed itself is a lot more complicated. Africa’s geography is so diverse that its population has to depend on far more than two crops for its calories. Many of Africa’s farmers are poorer, less educated and even more isolated from infrastructure such as roads and irrigation systems than Asia’s were.

So Mr. Buffett is looking for ways to help African farmers increase their harvests without increasing their costs, thus his interest in developing plants that resist disease and drought.

To lobby for Africa aid, Mr. Buffett invites politicians, scientists, entertainers, and corporate executives to squeeze into the cab of his Deere tractor in Illinois, where he has their full attention as he navigates corn and soybean fields with global positioning technology. One of the few people he has let drive his harvesting combine, worth hundreds of thousands of dollars, is Shakira, the pop singer from Colombia who has an education foundation.

It’s hard to measure the impact of Howard Buffett’s foundation, something Mr. Buffett himself acknowledges. He does most of the work finding and visiting projects. He employs eight people, mostly in administrative roles. One man is based in South Africa overseeing research on Mr. Buffett’s 6,000 acres of farmland outside Johannesburg. It was there on a wildlife preserve that he set up that a cheetah bit him.

Mr. Buffett figures his foundation’s projects have helped about 1.5 million Africans so far. He hopes that the crop-breeding work he is supporting will eventually help millions more African farmers feed their families.

His father, for one, counsels patience. “If you bring your heart to something it makes a big difference,” says Warren Buffett. “And he has time. He didn’t have to wait until he was 80 years old.”

For the first time since the early 1970s, the prevalence of hunger in the world is climbing. According to the U.N.’s Food and Agriculture Organization in Rome, 15% of the world’s population is hungry, up from 13% at the middle of this decade. FAO economists are predicting that the number of chronically hungry people will climb this year to 1.02 billion, up 11.5% from 2008.

As soon as next year the world could resume consuming more grain than its farmers produce. That global trend earlier this decade is what drained world grain stockpiles, setting the stage for last year’s price shocks. The fear is that food prices will leap when the world economy recovers.

“I am more discouraged than I was when I started. The problems are so huge,” Mr. Buffett says.

In February 2007, his SUV pulled into Fufuo, a village in central Ghana. Accompanied by Ghanaian agronomist Kofi Boa, he hurried into a large cinder-block building where 30 farmers had been waiting, sheltered from the sun.

Back home, Mr. Buffett owned 800 acres of corn and soybeans and a fleet of the most modern John Deere implements. Now, he hoped to learn something from farmers who scratched the dirt with sticks and machetes. Mr. Boa, the agronomist, had been coaching them to replace slash-and-burn farming with a practice he called “no-till.”

In many African villages, poor farmers—who are often women—had traditionally made room for their crops by chopping down the brush and trees on a few acres of tribal land. It is hard on the farmer and the environment. The land is laid bare to erosion. As the soil deteriorates, farmers work harder and harder to produce food until they have to move on to another spot, repeating the cycle.

Mr. Boa told Fufuo’s farmers to disturb the ground as little as possible. Other than poking holes in the dirt to plant their seeds, the ground was not to be hoed or vegetation burned. Organic residue—such as leaves, stalks, and roots—was valuable, not trash. Fufuo’s farmers were taught to make room for their seeds shortly before planting time by squirting the competing vegetation with Chinese-made weed killer dispensed from backpacks.

The village quickly discovered that no-till plots yielded bigger crops with far less labor. The mulch acts as a sponge when it rains, banking water for crops, and then breaks down into plant food. The time the farmers saved by no longer hoeing weeds and cutting brush was time for money-making endeavors. Some started to raise cocoa trees, a crop prized by Ghana’s government for its export earnings; others began to raise chickens, feeding them with their surplus grain.

“How many seeds of corn do you plant on a hectare?” asked Mr. Buffett as he peered through thick eyeglasses and jotted down answers in a notebook. “Can you farm more land now?” he continued. “How much corn did you harvest?”

Further convinced he should support the no-till training of farmers, Mr. Buffett left. After his SUV drove off, swallowed in red dust, the farmers were told that their visitor was the son of a billionaire named Warren Buffett.

—Adapted from “ENOUGH: Why the World’s Poorest Starve In an Age of Plenty” by Roger Thurow and Scott Kilman. Copyright 2009 by Roger Thurow and Scott Kilman. Published by PublicAffairs, a member of the Perseus Books Group.


Leave a Reply