Globalization of food begets risks

Bonnie Setiawan, International NGO Forum on Indonesian Development, Jakarta

This year's commemoration of World Food Day which falls on Oct. 16 should make us reflect on the situation of food in these times, when many have become unemployed and live under the poverty line. However despite the prolonged economic crisis, this was not what triggered our food crisis.

The cause must instead be traced to the globalization of food -- to market expansion which leads to the surge of foodstuff imports into developing countries.

Data on imports of rice and other foodstuffs has increased over the years, with the exception of a slight decline in 1997.

Data from the World Trade Organization (WTO) shows that we have become the world's largest rice importer, with 5.8 million tons in the fiscal year of 1998/1999 hence absorbing some 25 percent of the world's rice trade.

Earlier, Indonesia ranked as the world's ninth highest rice exporter and was also self sufficient in regards to rice. This year's data shows that our imports of key foodstuffs -- rice, soybeans, corn, peanuts and wheat -- have reached Rp 11.8 trillion.

Foodstuff imports have therefore become increasingly dominant, benefiting importers at the cost of many of our farmers. This strange phenomenon is due to import liberalization.

Import liberalization of foodstuffs, particularly rice, was the initiative of the International Monetary Fund through its Letter of Intent agreed to by the Indonesian government.

This marked a new phase in the nation's history of rice. The researcher Kamanto Nainggolan writes that there are three main factors that have affected rice policy.

These are, first, the lifting of fertilizer subsidies, followed by liberalization of fertilizers (earlier monopolized by the state fertilizer company Pusri) in December 1998. Hence production costs increased, leading to a higher determined price for unhusked rice.

Second, the lifting of the rice import monopoly by the State Logistics Agency at the end of 1999, so that any party could import rice freely.

And third, the most fatal factor, has been the maximum import tariff set at 5 percent. Import fees for rice, sugar, corn, soybeans and flour were reduced to zero. Farmers were painfully hit by the surge in imports of those foodstuffs, even onions.

Our agricultural system has since then entered the globalization of food. Decisions about its distribution are now left to the market, without heed to the farmers' plight.

IMF's Letter of Intent was only the beginning of the process that was due to commence in 2003 through the ASEAN Free Trade Area, and in 2004 through the Agreement on Agriculture under the WTO.

The application of AFTA and AOA pose an increased threat to agriculture, when the market for domestic food products must be opened to all sorts of agricultural products from outside the country. All our support to farmers will become meaningless with the reduction of domestic subsidies. All credits and subsidies for agricultural needs will no longer be allowed -- whie the state will no longer be able to support our farmers' export capacity. Farmers will have to fight alone in the free market.

The basic thinking behind this liberalization of foodstuffs is the treatment of foodstuffs and agriculture as industrial products which are traded freely like manufactured goods. As the United Nations once said, food becomes a commodity, instead of a human right; it becomes part of free trade and the free market.

Agriculture in the U.S. and in EU countries no longer depends on the supply of raw materials, but on various non-renewable chemicals. In the U.S., reportedly three-fourths of all processed food have high artificial content such as orange juice with little orange content, and sausages with little meat. The chemical industry has replaced agriculture as the supplier of the food industry.

Farmers' incomes become closely tied to those of agro-chemical companies such as DuPont and Monsanto. The surplus of agricultural products has thus become an important element of U.S. international trade, which is also promoted through food aid to poor countries. This aid aims to eventually change people's eating patterns through the consumption of flour and to outdo local producers. This may explain America's rapid increase in flour exports from 1945 to 1985.

Despite the claimed benefits of "GM-food", the monopolisation allowed by the control of such technology would lead to the need for all farmers of corn, soybean or rice to buy from the firms involved -- meaning unlimited markets and extraordinary profits.

Almost half the patents on "GM-foods" are controlled by 14 large corporations with patents in staples: Rice, wheat, soybeans, corn, potatoes and sorghum. They are even in the process of acquiring patents for the DNA derived from the best part of plants -- including rice. Transnational corporations have started to plant such genetically modified foodstuffs in developing countries, such as the planting of cotton in Bulukumba, South Sulawesi, by PT Monagro Kimia under Monsanto.

Traditional agricultural systems in developing countries are therefore increasingly under threat. In 1993 the Food and Agricultural Organization had warned that research in biotechnology had not focused on the needs and interests of developing countries.

"Researchers are even trying to develop new products and processes which can replace highly valued export commodities of developing countries, such as tropical oils and rubber," the FAO report said.

While developing countries clearly cannot rely on their traditional agricultural products, they have not been able to develop better alternatives.

Our farmers are still living at a subsistence level, are largely landless and unorganized; in this condition they must face the expansion of foodstuffs from many giant food corporations. The former U.S. agricultural minister John Block was quoted as saying that the idea that developing countries need to be self sufficient is "an anachronism."

He said they should rely for their food sustainability on U.S. food products, which were in abundant supply and were often cheaper. We are thus forced not only to depend on Western manufactured products, but also on their foodstuffs!

Once it is clear that our food crisis is a direct result of the globalization of food, we must seek a way out of the problem.

It would be very dangerous to leave the regulation of food to the market. Food would be under the interest of speculators, traders and uncontrolled market fluctuation.

We need a principle of food sovereignty; one that goes beyond food security. The provision of adequate and decent food must become central to government policy. A nation which cannot fulfill its own needs for food cannot hold its head high among other countries.