40 Chances

by Howard G. Buffett

  Once I learned more about monetization, I realized that farmers in different parts of the world had been complaining about it to me for some time. I just didn’t realize what they were talking about. Probably a dozen times, farmers had asked me why “the US” was depressing their prices by dumping our commodities into their markets. In Ethiopia, a grain trader once showed me a warehouse of bagged commodities that he said he was unable to sell because of US commodities flooding the local market. At the time, I thought that some independent grain trader with ties to the United States or some expatriate businessman was behind it. I didn’t realize—and maybe the farmers didn’t either—that it was actually NGOs supplying the commodities for these trades. European countries had once allowed monetization as well, but in the mid-1990s both Europe and later Canada moved to change their aid policies; ever since, they’ve sent cash for purchasing and distributing food locally.

  Monetization of food aid should be stopped, as should the requirement of moving US food aid commodities mainly on US-flagged vessels. Shippers contend that the guaranteed business helps keep a fleet of ships ready in case of war or disaster, and that maintaining a large maritime fleet is essential to national security and jobs. However, according to the GAO, the shipping preferences don’t contribute to that preparation, at least in part because the ships used are not militarily useful.3 Plus, many of the American vessels ultimately are owned by subsidiaries of foreign countries. Food aid commitments will still support considerable business for US shippers, but the companies should charge competitive rates.

  Many parts of the world need our in-kind food aid, as in the case of Pakistan. But rather than allow NGOs to monetize our commodities and allow such a large portion of those revenues to get diverted to shipping costs, we should move to a model that involves sending cash to regions where there is enough local agriculture that we can purchase food aid locally. In part 5, I will tell you about a pilot WFP program called Purchase for Progress, or P4P, which gives food aid administrators more flexibility to buy commodities from smallholder farmers. This practice lifts a region’s economic base while at the same time getting food to people who need it. Using this model, WFP can not only provide food aid but also offer smallholder farmers opportunities to become competitive players in agricultural markets and thus improve their lives—and even exit poverty, permanently.

  TOO RIGID

  I also think the US government is too rigid about the amount of money it spends on food aid. Rather than peg food aid to a hard budget, Washington should commit to keeping the volume of commodities it sends abroad at a more constant level. In the 2010 US federal fiscal year, the $2.3 billion food aid budget generated 2.5 metric tons of food aid. A decade earlier, before the grain-price shocks of recent years, our government was able to send 6 million tons of food aid with a budget of $1.7 billion. The trouble is, emergency hunger levels do not adjust to market prices.

  US-grown commodities will always play an important role in food aid, in part because we can mobilize large amounts of grain relatively quickly and because there are times when food shipped from across the ocean is the best alternative. As startling as this seems, I have seen data showing that it costs twice as much to move grain from Yambio, South Sudan, to Darfur than to ship grain from a US port all the way to Darfur. The roads are at times impassable due to weather and other conditions, and the security needed to accompany the shipment is so expensive that it renders this route impractical. And moving it by air can double the price.

  Ideally, agencies such as USDA and USAID should focus on the right mix of aid or cash to respond to a need, whether with a high-wire, effective operation like the one I saw in Pakistan, or with a well-organized process of supporting local farmers by buying food aid from them when possible.

  * * *

  I. CARE does continue to sell commodities in one instance: the government of Bangladesh buys CARE-brokered food aid for a school program because no other local supplier can handle the logistics, and CARE is certain where the food goes.

  Story 25

  A Six-Beer Insight

  I don’t drink alcohol.

  When I was a little kid growing up in Omaha, my maternal grandfather, William Oxley Thompson, lived two blocks from us. Beginning when I was five or six, I used to walk to his house from time to time. He would lift me up and sit me on his lap, and talk to me about life and give me advice. One of his warnings was, “Howie, every time you drink alcohol, you kill brain cells.” Then he would pause and add with a smile, “And you don’t have any to waste.” That gives you some idea of his sense of humor. He was a wonderful, fun person, and I always appreciated his advice. I just was never interested in drinking, and I’m sure that has been a good thing. Since most things that I enjoy I tend to do to excess, I’m glad I never developed a taste for or a curiosity about drinking.

  Naturally, the rest of the world was not in on my grandfather’s wisdom. In many cultures, drinking is a sign of goodwill, of friendship, of respect. I appreciate the importance of showing respect to local culture and customs. Being invited to have a drink is a gesture that one does not just brush off. In some parts of the world, it is traditional to conduct certain kinds of business over alcohol. I usually find some way to get out of drinking, but it hasn’t always been easy.

  In 1991 I visited Moscow in February. Mikhail Gorbachev, president of the USSR and general secretary of the Communist Party, was grappling with factions in his government that wanted to realign Russia’s entire agricultural system. I traveled there as both a farmer and a Nebraska county commissioner, along with former congressman John Cavanaugh of the agricultural consulting firm Summit Ltd.

  We had a series of interesting meetings with farmers and local officials several hours outside Moscow, close to the city of Tula. I remember the frustration of farmers I spoke to who were motivated to improve their methods and grow more food but were battling government bureaucrats who were not anxious to give up any power or authority.

  It was still the USSR then (although the Soviet system would be disbanded by December), and travel around the country was restricted. As we were leaving Tula, a military vehicle appeared with lights flashing and pulled us over. The military officers ordered us all out of the car. I got a sick feeling that something bad was going to happen. Our driver and guide motioned us to climb out, as military officers jumped out of the truck, huffing and stamping their feet, their breath creating ominous clouds in the cold air. The temperature was probably at least twenty degrees below zero. Another car pulled up, and some officers got out. One set up a whole chorus line of vodka bottles on the hood of the military truck, while another brought trays of hors d’oeuvres. And another guy passed around shot glasses. “They are here,” our guide confided, “to thank you for your visit and to drink a toast to your safe travels.”

  It was so cold that having a drink “on the rocks” would have been redundant. But the men seemed in a jovial mood, already smiling and laughing and looking forward to the liquor. I grabbed a bottle and made a big show of taking a (fake) swig right from it. “Hah hah, here we go, drink up, everybody!” I called out. I walked from officer to officer splashing vodka into their shot glasses. “Here, enjoy, this is great.” I’d take a step or two away with my back turned and appear to take another sloppy swig, and then turn around. “Who wants more?” We continued like this for an hour or so, them getting drunker and me getting louder and more exaggerated in my performance. Soon the bottle and maybe one more was empty, and I wiped my mouth on my sleeve. “Okay, hate to break this up, but thank you for this fantastic send-off.” I was so relieved when the car started and we were off again.

  SOBERING INSIGHTS

  My abstaining has produced an odd benefit over the years. I’ve learned a secret that journalists and spies know well: being the only sober person in a roomful of drinkers can be useful.

  In 2007 I traveled to South Sudan for an agricultural meeting involving an NGO. There was a “dinner party” in a run-down shack. It happen
ed that I was feeling very discouraged—almost angry—about how little the projects we were supporting seemed to be accomplishing. And the chatter among development critics and experts was getting louder: “With all the corruption in Africa, shouldn’t there come a point where we just stop sending aid? Won’t that send a message to thugs and corrupt rulers that until they clean up their act, we’re not going to reward them for it?”

  Unquestionably, the situation all around us was grim. South Sudan later achieved independence in 2011. Today it is Africa’s newest and youngest nation, a landlocked country in northeastern Africa bordered by Ethiopia, Kenya, Uganda, DRC, CAR, and, of course, Sudan. These neighbors star all too frequently in news stories and documentaries about the worst nightmares in Africa: cruelty, famine, child soldiers, desperate refugees. You name the challenge, and it’s swirling around this region. Sudan’s president, Omar Hassan al-Bashir, is wanted by the International Criminal Court on charges of genocide and war crimes in the Darfur region.1

  Until the mid-1950s, Sudan was called Anglo-Egyptian Sudan, but it gained its independence from Egypt and the United Kingdom in 1956.2 Two prolonged civil wars followed, with upwards of two million lives lost, splitting off the southern part of Sudan into an autonomous region. When I visited, the central Sudan government in Khartoum had been fighting in both South Sudan and the country’s western region, Darfur.

  One of the surprising theories I heard on the trip was the quietly expressed view that the United States had set the stage for South Sudan’s independence when President George W. Bush invaded Iraq. According to some of my dinner companions, Iraqi president Saddam Hussein had been sending not only arms to Sudan but also fighter pilots to train the local air force, which probably would have beaten back the southern forces battling Khartoum. After Iraq became focused on the US invasion, however, that support disappeared, and eventually Khartoum had to choose which conflict to fight, and it picked Darfur. I had never heard this expressed anywhere else.

  South Sudan has been a troubled region for a very long time. Today, it has a population of eight million. The economy is predominantly rural and relies on subsistence farming and raising cattle, but the country is littered with the residue of conflict: horrible roads, lack of infrastructure, and many farmers forced off their land, which is now fallow.I

  At that 2007 dinner, I was seated next to a man who had been a general in the Sudan People’s Liberation Army (SPLA), which had originally fought in the second civil war but subsequently made up the military of South Sudan. He was a dignified man, and he had lost a leg in the conflict. Initially, he was circumspect, reserved, and polite. He did not speak much. We began by eating and talking in general terms about general topics. But from the minute we sat down, he was drinking beer. I was drinking Coke.

  In my experience, the most interesting comments seem to occur once my dinner companions have passed the six-beer mark. After the former general entered that stage, he leaned toward me and said he would normally never tell anyone what he was about to tell me.

  He had me at “never.”

  Earlier, I had asked him if food aid was making things worse in countries where corruption was so rampant. He wanted to get back to that. He narrowed his eyes—a little annoyed, perhaps, at my simplistic assessment.

  I did not take notes, but this is the gist of what he said: A few of the armed groups in South Sudan had developed a technique to get their hands on foreign aid. They surround a village and prevent any entrance or exit, and no food aid deliveries. Since for so many villages a jug of fresh water can mean a mile walk, this blockade becomes life threatening, particularly in an area where people are weakened from hunger. Next, the rebels get word to a local NGO: send food aid, or the villagers will die. The hard-line position would seem to be a classic “never negotiate with terrorists” scenario. The African countryside is peppered with tiny villages, and if you start cooperating and sending food, would this extortion ever stop?

  But while the thugs are heartless and cruel, they are sophisticated, the general explained. They take only 30 percent or so of the food aid because they know that if they take it all, the NGO will no longer send any. So they take enough to eat or sell but allow just enough to get through so that the people don’t starve to death.

  “What do you do?” he asked me grimly. Is it so simple to say, “No more food aid; we’re teaching [the rebels] a lesson”? This scenario is one of those unimaginable elements of the conflict-corruption-starvation ecosystem.

  Responding to the extortionists unquestionably perpetuates the practice. But NGOs are neither governments nor arms of the military. They are there to help the poorest and most vulnerable people who have no other recourse. If you send aid, you can keep an entire village of men, women, and children alive, and the thugs will move on, and your response will engender some small amount of protection for the innocents. If your organization is in Africa for humanitarian or religious reasons, that is your mission. So, when they can, the general confided, the NGOs do it. They don’t like to talk about it or publicize it. I have mentioned this story to others, and sometimes I receive blank stares.

  It is estimated that in South Sudan an AK-47 costs around $10. In rural areas of this pastoral country they seemed to me to be nearly as common as cows. Photo: Howard G. Buffett

  Whenever I hear people who have not been to Africa and not seen hunger up close talk about banning all food aid, I think back to this beer-fueled insight. When the status quo is chronic poverty and low-yield agriculture, it doesn’t make sense to keep responding with crisis intervention-style aid. Those financial resources are better spent, and ultimately will save many more lives, if you can figure out how to change the fundamentals. But when the issue is conflict or natural disaster, the “fundamentals” are irrelevant until you restore order. Often you are talking about the most helpless people on the planet, and I’ve come to believe that you can’t always decide to help on the basis of whether what you do is “sustainable” or not. There is no safety net, there is no government program to take care of meaningful numbers of people, and there is no mercy from the forces battling for power that surround them. In these situations, which at some level are temporary, withholding the aid does not teach anyone a lesson or motivate better behavior. These are the sobering trade-offs of the real world. Can we keep a village of innocent people under siege alive long enough to later teach them to feed themselves so that they are less vulnerable in the long run? When we give aid in conflict, postconflict, and humanitarian situations, that is what we’re trying to do.

  On the same trip to South Sudan I met a boy whose parents had named him “World Food Programme” because WFP aid kept his family alive under the most dire circumstances. I keep that boy in mind whenever I feel frustrated and am tempted to give up trying to make a difference in difficult places such as his country. I like to think that boy will become a man motivated to live up to such a powerful, important, peace-seeking name.

  When I stopped to photograph this child, I learned his name was “World Food Programme.” He caught my attention because of the camo army uniform he was wearing, right down to the shoulder lapel emblems. His father was a general in the SPLA. Photo: Howard G. Buffett

  * * *

  I. It’s hard to exaggerate the difficulty of life in Sudan. Many thousands of young people have spent their entire childhood in camps for displaced persons, such as the Kakuma camp in Kenya, which I have visited twice. While getting a tour of the facilities, we opened the door to a medical storage room and bats came streaming out. As I write, another uprising has created yet another generation of “lost” children fleeing violence in the Nuba Mountains.

  Story 26

  Less Than Sparkling

  It’s dangerous to drive on rural roads after dark in Africa. It’s hard to see the deep potholes and animals that can cause a wreck. And it’s hard to see the people who walk in or near the road at all hours. In 2007 I was on a trip to Togo, a small country in West Africa where four-fifths of the
population depend on agriculture for survival. We were heading back to our hotel after a long day in the field, and I remember how bright the stars were out in the countryside, which meant it was very dark on the ground.

  The headlights of our SUV caught a young girl walking all alone by the edge of the road with a water jug balanced on her head. She was inches from the vehicle in front of us. The dust from the first SUV and then our headlight beam moving on made her disappear as quickly as she had materialized. Thankfully, we did not hit her, but it was close.

  The next day, CARE workers took me to a town called Dapaong to see a new water depot where local residents could buy clean water. The depot looked like a concrete tollbooth painted blue and khaki, built by the side of a dirt road. I noticed that one of the spigots was placed at least seven feet off the ground with chest-high controls—so that women and girls could stand underneath it with containers on their heads. That way they didn’t have to hoist the heavy buckets or jugs back up after filling them.

  Girls often begin carrying water at the age of five. The responsibility frequently prevents them from attending school. Photo: Howard G. Buffett

  I borrowed a bucket and went over and stood by a lower faucet and filled it up. At the point where it was nearly full, it felt heavy and awkward. A girl who could not have been more than six, with her own bucket and a flat rock, had been watching me. I poured my water into her bucket. She placed a flat rock in the middle of her headscarf to create an even surface, lifted the bucket to the top of her head, and then she headed home.