Warren Watch: Investor’s son pitches in to help Africans fight hunger

Former Omahan Howard Buffett is featured in a new book by two Wall Street Journal reporters on Africa’s continuing problems with food supply.

“Enough: Why the World’s Poorest Starve in an Age of Plenty” by Roger Thurow and Scott Kilman (Perseus Books Group, 400 pages, $27.95) says Buffett, a son of Omaha investor Warren Buffett who is a director of Omaha-based Berkshire Hathaway Inc., is playing “a behind-the-scenes role in the global war against hunger.”

Calling him “an unassuming Illinois soybean and corn farmer,” the book says Howard Buffett spends much of his time traveling in Africa to improve farming practices.

Through his foundation, funded by the estate of his late mother, Susan Thompson Buffett, and his father, Howard Buffett spends about $38 million a year developing new crops, making small loans, helping farmers market their products and supporting other efforts to improve farming in Africa. The foundation has eight employees, but Buffett doesn’t take a salary himself.

In an adaptation from the book published in the Wall Street Journal, Buffett said his interest in global hunger began when he was photographing migrating wildebeest and zebra and saw land that poor farmers had cleared by fire.

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

One of his projects would provide to African corn breeders royalty-free access to Monsanto’s biotechnology for drought-tolerant corn. His 6,000 acres of farmland outside Johannesburg is used partly for research on ways to improve food production.

Buffett estimated that his foundation has helped 1.5 million Africans so far, but “I am more discouraged than I was when I started. The problems are so huge.”

Of his middle child, Warren Buffett says: “He’s got my money and his mother’s heart.”

Director buys 10 shares

Los Angeles attorney Ronald Olson, a Berkshire Hathaway director who is a law partner of Berkshire Vice Chairman Charlie Munger, bought 10 shares of Berkshire stock Monday at $87,000 each, according to a filing with the U.S. Securities and Exchange Commission.

On the same day, Wall Street firm Keefe Bruyette & Woods gave Berkshire an “outperform” rating, meaning that its price should do better than the overall market. Keefe Bruyette listed a “target price” of Berkshire’s shares of $107,000 each and praised the quality of its businesses and its long-term growth and acquisition prospects.

Berkshire’s low closing price in recent months was $72,400 on March 5. It hit $147,000 last Sept. 19 and an all-time high closing price of $149,200 on Dec. 10, 2007, according to Bloomberg News records.

Catastrophe risk reduced

In the past two months Berkshire Hathaway has sharply reduced the amount of catastrophe risk it insures, according to industry magazine Business Insurance.

Berkshire covers damage from hurricanes, earthquakes, windstorms and other natural and man-made disasters by assuming large chunks of the policies sold by retail insurers. The reinsurance business brings in billions of dollars in premiums but occasionally pays out billions of dollars in claims.

The article quoted John Daum of Lockton Cos. LLC of Kansas City, Mo., Rod Fox of TigerRisk Partners of Greenwich, Conn., and Joseph M. Fedor of U.S. Re Group in New York as saying that Berkshire is reducing its exposure.

Berkshire is avoiding large claims that could strain its cash or affect its ratings by financial agencies such as Moody’s Investors Service or Standard & Poor’s, the story said.

Ajit Jain, president of Berkshire’s reinsurance operation, declined to comment for the magazine story.

In the first three months of this year, Berkshire’s reinsurance revenue totaled $3.09 billion, triple that during the same period last year. But premium rates for catastrophe, or “cat,” insurance have fallen, the story said, making the business less attractive in relation to the risks involved.

“They’re keeping their powder dry,” Daum said. “Pretty much the sentiment within Berkshire ... is not to have any catastrophic claims, particularly for the wind peril.”

Challenge grant

Warren Buffett’s sister Doris, who heads the Sunshine Lady Foundation, has offered a $100,000 grant if the Delaware County (Pa.) Community Foundation can raise $50,000 by Dec. 31, the Philadelphia Inquirer reported.

The money will go for emergency expenses, such as urgent home repairs or medical operations, for low-income people.

Was top bidder Chinese?

The winning bidder in this year’s charity auction for lunch with Warren Buffett may be Chinese, the Business Daily Update news service said.

Someone bid $1.68 million to have lunch with Buffett, with the proceeds going to the Glide Foundation, a San Francisco church-related social services agency. The bidder has asked not to be publicly named.

Last year’s lunch winner was Hong Kong money manager Zhao Danyang.

This year’s winner may also be Chinese, according to speculation, because in the last hour of bidding, the winner submitted a bid of $1,235,578. The Chinese regard 8 as a lucky number.

The nine previous auctions raised a total of $4.2 million for the Glide Foundation.

Contact the writer:

444-1080, steve.jordon@owh.com