JP/4/BONI

JP/4/BONI

Causes of food insecurity

Bonnie Setiawan
Program Officer
Structural Reform and
Trade Monitoring
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 this
time of crisis, where 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 food crisis must instead be traced to the globalization of
food. This refers to market expansion which leads to the surge of
foodstuff imports into developing countries.

One illustration is Indonesia's data on imports of rice and
other foodstuffs, which have increased over the years, with the
exception of a slight decline in 1997.

Data from the secretariat of the World Trade Organization
(WTO) show that Indonesia has 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 a self sufficient country in regards to
rice. The latest data this year shows that our imports of key
foodstuffs -- rice, soybeans, corn, peanuts and wheat -- have
reached Rp 11.8 trillion.

This means foodstuff imports have become increasingly
dominant, benefiting importers at the cost of many of our
farmers. This strange phenomenon is not due to the crisis -- but
because of 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 -- and farmers were
painfully hit by the surge in imports of those foodstuffs, even
onions.

Our agricultural system has since then entered the era of the
globalization of food. Decisions about food 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 foodstuffs and other agricultural products
from outside the country. All our support to farmers so far will
become meaningless with the reduction of domestic subsidies. All
kinds of credits and subsidies for agricultural needs will no
longer be allowed. On the other hand 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, Monsanto, Rohm and Haas, and American
Cyanamid. 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.