Protecting our farmers from what?

James Kallman, PT Moores Rowland Indonesia, Jakarta

The World Trade Organization talks in Cancun, Mexico failed because nobody cared enough for them to succeed.

The United States currently has its "war on terrorism" and homeland security as its greatest priorities, while the Europeans are preoccupied with the coming additions to their rapidly expanding family of nations.

The nations of the developing world have learned the valuable lesson that much can be achieved by presenting a united front. Cancun provided an ideal opportunity to flex this new-found muscle.

Where the battle lines were drawn was over agriculture, or to be more precise the American and European continuation of paying large subsidies to their farmers to keep then on the land. The developing nations were not prepared to concede more on the free trade front until meaningful concessions were made by the richer nations of the world.

While New Zealand has proven that such protectionist policies are unnecessary to support a thriving agricultural industry, in the northern hemisphere there are other considerations in regard to associated industries such as agricultural equipment manufacturers and distribution chains.

However, to suggest that reducing tariffs on agricultural imports while maintaining these farming subsidies would sound the death-knell for farmers in India or Indonesia for example stretches beyond the realms of credibility. For the impoverished state of farmers in countries such as these can be laid fairly and squarely at the door of their own governments' shortcomings.

Although the number of Indonesians employed in agriculture, forestry and fisheries has declined over the past 30 years, it still remains the nation's single largest employment sector, accounting for roughly 44 percent of the total workforce based on 2001 figures.

Yet this sector constituted just some 17.5 percent of the gross domestic product in the same year. Only now though is the government getting around to drafting a bill to revise the 1960 Agrarian Law of some 40 years ago. Much has changed in that time.

Yes, self-sufficiency in rice production was achieved for a short while, but those days are never likely to return, as the population growth has placed supply demands beyond the capability of the nation's traditional rice growing regions.

Nor, as some once fondly imagined, is rice the most suitable crop to grow in all areas of Indonesia. Indeed, it is not even regarded as a staple in some Eastern parts of the archipelago.

For such an agriculturally-based society it is hard to justify past concentration on the development in more technical fields. When attention should have been paid to producing ploughs and tractors for example, vast sums were diverted towards establishing an aircraft industry.

Yet such things pale into insignificance in comparison to the treatment of the farming community in general. Indonesian farmers have suffered, and continue to suffer from a major abuse of their basic rights, legal recognition of ownership of the land that in some cases families have worked for generations.

For only a small percentage actually possess that vital paperwork which proves beyond a shadow of a doubt that they have legal title to their land, and without which collateral no bank will even consider loans.

This was one of the things the 1960 Agrarian Law attempted to address, by the setting up of special courts to tackle agrarian disputes and where possible return the land to the farmers.

Begun in 1962, the effort was short-lived however and much hampered by the chaos that ensued in the aftermath of the abortive 1965 coup, which was blamed on the Communist Party (PKI). By 1970, the New Order regime had closed down these special courts.

With little or no legal protection, the farmers became easy prey for a "connected" private sector that paid a pittance for prime agricultural land. Golf courses, luxury estates and industry not only gobbled up productive farmland but also sucked up the water necessary for continued food production in the area.

While the total area of cultivated land has shrunk, so too has the individual holding, roughly 15 percent in the decade between 1983 and 1993. Work as hard as he will, it's tough for a farmer to make a living off just over half a hectare of land, the average farm holding in Java in 1993. For farmers like these it's a hand-to-mouth existence with little prospect of ever growing richer or enlarging their holding.

As with many other businesses in Indonesia it is the ubiquitous "middleman" that profits most from the farmers' toils. Although percentages are hard to pin down, tracking the price of paddy suggests that farmers only receive somewhere around 45 percent of the final market price.

With agricultural exports, the preserve of larger companies, another strategy comes into play. Often "raw" products are shipped at minimum mark-up to their corresponding Singaporean or Malaysian company, who reap the benefit of re-exporting "finished" products.

Again the Indonesian farmer doesn't benefit, but neither does the government, as it receives a minimal tax return on unfinished products. The owner of the company smiles all the way to the bank, in whichever country that may be.

Indonesian farmers do need protection and a square deal, but not so much from foreign agricultural imports as from their fellow countrymen. What is needed is a land reform program that puts the welfare of the farmers first, rather than that of politically connected industry.

It would of course help if the farmers were represented in the legislature by some of their own, but until that time there must be a display of far more political will than was shown in Cancun to find a solution acceptable to both sides.