McDonald's Corp. lobbies ASEAN on farm reform

McDonald's Corp. lobbies ASEAN on farm reform

SINGAPORE (Reuter): A senior official of U.S. hamburger giant
McDonald's Corp. said yesterday that protectionist farm policies
had driven up the cost of food in Southeast Asia.

Raymond Cesca, managing director of McDonald's World Trade,
which runs the company's international operations, told Reuters
Southeast Asian governments and the U.S. farming community should
come up with a plan to lift restrictive agriculture rules in the
region while protecting its farmers.

"The food costs are extremely high in ASEAN (Association of
Southeast Asian Nations) compared to other developing countries.
Primarily, the reason is because of the very restrictive policies
relative to agriculture," he said in an interview.

The price of one hamburger in ASEAN, when hidden costs like
high tariffs on feedstuffs for the livestock industry are
included, reached an average of US$2.16 against the $1.95 paid by
consumers in the United States, he said.

McDonald's has more than 400 restaurants in ASEAN, which
groups Brunei, Indonesia, Malaysia, the Philippines, Singapore,
Thailand and Vietnam.

Cesca said protectionist farming policies were understandable
"because of the large number of people that are employed in this
sector, and that ranges from 50-65 percent of the people
employed."

"That's why no one wants to address it," he said.
"Politically, it's not in vogue to address those issues."

Cesca said he would seek to convince the region's food
industry officials of the need to remove barriers when he speaks
at the first ASEAN business summit in Jakarta this week.

The ASEAN free trade area agreement, which aims to trim tariff
duties to 5.0 percent or less in many industries by 2000, does
not apply to agriculture.

Discussions on the sensitive farming issue, which has often
marred meetings of ASEAN leaders and economic officials, has been
deferred to beyond the year 2010 when the ASEAN Free Trade Area
(AFTA) will be implemented in full.

Some countries, such as Indonesia, may be reluctant to open
their agricultural sectors because trading in farming goods is
controlled by a state monopoly, analysts say.

Others, like the Philippines, espouse a national policy of
self-sufficiency in items like rice, the staple food of the
country's 70 million people, and slap prohibitive tariffs on the
import of foodstuffs.

Cesca blamed the high tariffs on items like imported animal
feed for the poultry and livestock industry and inefficiencies in
the food processing and distribution sectors for driving up costs
in the region.

He said food processors and the U.S. farming community should
help develop a plan to help ASEAN farmers boost yields and
upgrade their food processing and distribution networks.

"Ultimately, what I see is a strategic plan that balances two
things. One is to balance the liberalization of the agricultural
sector and on the other side to minimize employment dislocation,"
Cesca said.

He said lobbying ASEAN countries to throw open their farming
sectors would make no sense without providing for farmers by
teaching them how to raise yields and income.

"If you open the borders right away, it would basically affect
that (farming) sector by putting some people out of work," Cesca
said.