THE BLOG
11/20/2013 03:58 pm ET Updated Jan 25, 2014

The Mariotti Interview: Howard G. Buffett Finds Hope in a Hungry World

Last week, I reviewed my friend Howard G. Buffett's incredibly insightful new book, 40 Chances: Finding Hope in a Hungry World. Click here for my review.

After reading it, I felt much more hopeful that we really can solve the problem of world hunger. I also had questions, which Howie has answered in detail, below:

Steve Mariotti: I loved your new book, 40 Chances: Finding Hope in a Hungry World. In it, you are very honest about philanthropic efforts to ease hunger that have not worked--as well as models you think have been effective. If you had to name one principle to guide such efforts in the future, what would it be?

Howard G. Buffett: All of us in the development field need to take more risks and not be afraid to fail. That means organizations working on hunger need to be more innovative in how they operate, but it also means donors need to change their definitions of "success" as well. You cannot innovate without taking risks and accepting that your ideas will not always work. Albert Einstein said the definition of insanity is doing the same thing over and over again and expecting different results. We have had some modest success in the last 25 years reducing poverty and hunger on a percentage basis, but today there remain nearly 870 million people on this planet who are food insecure. In my view that is unacceptable. If we want to tackle a big problem like global hunger, we need big ideas and a different way of doing things.

Steve Mariotti: Helping small farmers become successful entrepreneurs so more food becomes available in food-insecure regions is a theme throughout the book. What is the wisest role a nation's government can play in encouraging farmer-entrepreneurs?

Howard G. Buffett: No country in history has developed its agricultural sector without government playing a major role and making significant investments to support that development. The United States did it 150 years ago with the Homestead Act to settle the West, the Morrill Act to create land grant universities, and by building a transcontinental railroad, among other government-led efforts.

More recently, Brazil has spent the last few decades making huge investments in agricultural research, infrastructure, and neutralizing the soil in vast areas of the country's interior to make it available to agriculture. They made some mistakes that had negatives consequences for their environment but they are learning from those early mistakes and have course-corrected in terms of their biodiversity requirements. Now they are working to tie smallholder production to their government procurement programs to further accelerate development of the country's poorest farmers, all while building a conservation-based farming system that looks very different from ours yet competes on par with the U.S. in terms of corn and especially soybean production.

The U.S., Brazil and other countries with developed agricultural sectors have proven there are no shortcuts. Many countries in Africa have populations where 60% to 80% are smallholder farmers. Governments have to play a huge role to ensure these farmers can support their own food needs but also connect to markets to generate income. The wisest role a nation's government can play is to make significant investments in research and extension. I would put a land grant university in every country in Africa. Africa is a continent of 54 countries - there is no one-size fits all solution, and their system of agriculture, if done well, won't really look like the U.S. system. It will look more like Brazil, but each country needs to invest in agriculture based on the specific needs of their population and the resources available.

Steve Mariotti: You explain how important conserving topsoil is to tackling world hunger and also saving the environment. What is "conservation farming" and why is it so critical to teach it to farmers in the US and around the world?

Howard G. Buffett: Conservation farming simply means farming in a way that preserves and protects the soil. Specific practices include not turning over the soil (no-till); using cover crops; and rotating crops to build up soil fertility. The basic premise is that soil is a farmer's most precious asset. That's true everywhere in the world. There are more living organisms in a tablespoon of rich, organic soil than there are people on the planet. It is a highly complex system. Inorganic fertilizer cannot revive dead soil, so science and technology by itself cannot reverse the effects of soil that's been depleted of organic matter.

Take Africa for example. First of all, it got cheated in terms of soil quality to begin with. Then bad farming practices have further degraded the land available to agriculture. Farmers in Africa need to adopt conservation practices both to rebuild soil health and because it's the system that is most available to the majority of smallholder farmers who do not have access to and cannot always afford expensive inputs.

In the U.S., it's more about protecting what we have for the long-term. The U.S. is incredibly blessed with soil and climates ideally suited to agriculture. But if we do not improve our farming techniques we will erode our soil, waste our water resources, and otherwise undermine our capacity to help feed the world. So the reasons for adopting conservation farming in the U.S. are different from the reasons the developing world should adopt it. That presents both an opportunity and a challenge. Africa can build a better farming system from the start by adopting a conservation-based system, but like all farming practices, it requires knowledge and support. In the U.S., we have the knowledge and support but not necessarily the incentives in place or the political will to encourage a different approach to farming.

Steve Mariotti: You speak out against "monetization," the NGO practice of selling in-kind aid--such as grain shipped from the US--locally to raise money to pay for other needs or NGO expenses. European aid programs are now providing cash aid instead, but American NGOs are lagging behind. Why? Do you expect this to change soon?

Howard G. Buffett: First of all, it's important to say that the United States has been the most generous country in the world when it comes to food aid. Our Food for Peace program has since the 1950s fed more than 3 billion people in 150 countries, which is an incredible testament to the generosity of this program and American taxpayers. However, the program has been largely unchanged since it was created, even as the world around us has changed dramatically.

Monetization is one example of an outdated aspect of our food aid policy that is both inefficient and counterproductive, so I do hope it changes. It's important though to differentiate monetization from the vast majority of U.S. food aid that you would compare to European cash aid programs. The U.S. is unique among donor countries in that it provides most of its food aid in the form of in-kind commodities. This has become inefficient in terms of shipping costs and timing and also means that the U.S. provides less food aid than it could if operating on a cash basis. It's a model that is outdated - the same amount of aid if delivered in the form of local procurement dollars would do more to meet the needs of more hungry people quicker, especially in emergency situations, while also supporting local economies, which is the key to long-term food security.

Monetization is when NGOs are allowed to take excess U.S.-grown commodities that are not used for meeting emergency needs and sell those commodities into local markets for cash, which is then used to support the NGO's programs. If you think about what that means in practical terms, it means that if I'm an organization working to support and develop smallholder farmers in the developing world, I'm dumping U.S. commodities onto the very local markets I'm in theory trying to help, which means that smallholder farmers will get less for anything they grow and try to sell.

I know current USAID Administrator Raj Shah is trying to end monetization but there are interest groups who benefit from the policy who are fighting to keep it unchanged. I actually write about CARE's leadership in walking away from the program in 40 Chances: Finding Hope in a Hungry World, at a great cost to the organization. I think it's just a great example of good intentions undermined by bad policy, and hope others can follow CARE's lead, and support Administrator Shah's efforts to end it.

Steve Mariotti: Instead of using donors' money to buy food and ship it to struggling regions, the World Food Programme's Purchase for Progress (P4P) purchases commodities for local food assistance from local smallholder farmers, and encourages local governments to link food procurement for school meals to small scale local farmers. Your foundation and the Gates Foundation both support P4P. Any new developments to report?

Howard G. Buffett: Our foundation has had a lot of success investing in local procurement systems like Purchase for Progress. Our experience has been that figuring out how to connect smallholder farmers to markets is a faster, more sustainable way to address food insecurity.

P4P was always designed as a 5-year pilot program, and the pilot phase is ending next year. We have certainly seen great success in the program in Central America. WFP's procurement needs were always intended to be a temporary crutch for building cooperatives' capacities to permanently connect smallholder farmers to the market. In Central America, we really took it a step further by investing in building the productive capacity of smallholder farmers as well as their capacity to "do business".

The best sign of success is that WFP is not the primary buyer of the production of the cooperatives we work with; these cooperatives sell to a variety of private sector buyers, based on real market decisions like pricing, quality, delivery terms, etc. The next "phase" of P4P is still to be determined - there is a lot of work to be done still to determine the key lessons learned - but we are excited that in Central America, there is a real effort underway to do what Brazil did in terms of connecting government procurement needs to smallholder farmer production - especially for school feeding programs. If a government can connect those procurement needs to investments in smallholder farmers, you can really see how that can be a more effective form of investment in a country's food security.

Steve Mariotti: Agriculture for Nutrition (later renamed Agriculture for Basic Needs or A4N) is another initiative you supported in Central America that develops smallholder farmers by teaching them sustainable farming methods, business skills, a market focus and financial literacy so they can enter and thrive in the local economy. How is that going? Do you envision A4N programs spreading to other regions?

Howard G. Buffett: We invested in A4N to test and pilot these ideas for thousands of farmers and their families across Central America. We view our philanthropy as the initial risk capital for testing new ideas. A4N was a great example of something we supported, demonstrated its effectiveness, and then worked with Catholic Relief Services (CRS) to translate what we learned into an advocacy agenda that could inform investments and efforts at scale.

Our foundation cannot fund ideas like this at scale; we don't have the resources and even if we did, it's my belief that our funding is better utilized on the risk and innovation side, not in the scaling up of proven ideas. So in our view we accomplished what we set out to accomplish with A4N. CRS changed their approach to smallholder development as a result of this effort (and others), to focus more on value chains, not just production; and A4N is informing the governments' approach to extension in the region.

Conceptually, this is what we try to do everywhere we work, so the basic framework is absolutely transferable. The specifics, however, need to be tested in context. Agriculture is context-specific. What may be the top three investment areas in one country or even region within a country may not translate at all somewhere else. So we continue to invest in this approach to testing ideas but we never assume what worked in one area will necessarily work in another.

Steve Mariotti: To learn that almost one in five people in Texas is food insecure was shocking. You've partnered with Feeding America to create Map the Meal Gap, an online tool that anyone can use to look up a community in the U.S. and find out how many people living there are food insecure. How is Map the Meal Gap changing the way hunger is perceived in this country?

Howard G. Buffett: Hunger in the U.S. is mostly hidden. We are the richest country in the world with social safety net programs that are theoretically designed to ensure this country supports the basic needs of every person living here. Americans are not at risk of a famine or of children dying en masse from malnutrition and starvation, which is the reality for nearly a billion poor people in the world. However, our system is not perfect; there are gaps, and the result is that nearly 50 million Americans are what we would consider "food insecure", meaning they will face hunger periods and not know where they will get their next meal. This number has grown since the start of the financial crisis in 2008. On the positive side, Americans are also incredibly generous in their philanthropy, so organizations like Feeding America have a robust food bank system that helps fill those gaps.

Our strategy in the U.S. is to take hunger out of the shadows, raise awareness of the need, and personalize it. I think too many Americans think they know who is hungry in this country, but if more people took the time to volunteer at their local soup kitchen or for Meals on Wheels, they would be surprised by the people they meet and the stories of how they got to the point of needing food assistance. Hunger affects veterans, the elderly, single moms, and educated people who lost jobs and have not regained their footing. Hunger disproportionately affects rural communities and children. There are a million reasons why someone in this country could be hungry. Our hope is that folks will go to www.mapthemealgap.org, learn more about hunger in their own community, and support efforts to close the meal gap in this country. Ultimately the long-term solutions - creating better economic opportunities for people - are out of our Foundation's control, but we believe it should be unacceptable to have a hunger problem in the richest country in the world.

Steve Mariotti: What would you say to an individual reading this who wants to help? What are the most effective ways to get involved in ending world hunger?

Howard G. Buffett: The most important thing people should take away from 40 Chances: Finding Hope in a Hungry World in terms of how to help is that each of us has the capacity to be part of the solution. You can change your perspective on hunger, you can advocate for solutions, you can vote on leadership, you can volunteer - any of these ways of engaging can be as impactful as donating dollars to organizations working on the issue. We need to generate a collective political will to address world hunger, which means it will take all of us in some way to do so. For specific ways to engage, we've also put together some ideas for how people can take action at our website, www.40chances.com.

I also hope that people will recognize that 40 Chances: Finding Hope in a Hungry World is a call to action above and beyond just hunger. We are really asking people to recognize that we each have about 40 productive years to accomplish our goals in life - whether that means working on a social issue or something else. From the time you get out of college and get some experience, we each have about 40 years to do something really impactful.

Our Foundation goes out of business in 2045 - 40 years after my father gave us what I call the "big money." We view every year as one of a limited number of chances to achieve our mission to help the world's most vulnerable people achieve food security. When you look at life that way, it changes how you make decisions and your tolerance for the things that don't matter and that won't change the answer. We may not achieve our big goals at the end of our run, but we are confident we will make the most of our chances.

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Howard W. Buffett, Steve Mariotti, Howard G. Buffett at New York Public Library