RI seeking food security

RI seeking food security

Aileen Kwa, Focus on the Global South, Geneva

Indonesia refused to sign on to a Cairns Group position paper
calling for drastic tariff cuts submitted on Sept. 6, during the
agriculture negotiations at the World Trade Organization in
Geneva.

The Cairns Group led by Australia, is a group of 18 exporting
developed and developing countries pushing for an ambitious trade
liberalization agenda. Indonesia is currently a member of the
grouping. The Cairns Group paper calls for deep cuts in bound
tariffs for both developed and developing countries in the
current round of negotiations, slated to be completed by end
2004. They want developing countries with tariffs in agriculture
between zero to 50 percent to be cut to a maximum of 25 percent
and tariffs between 50 percent and 250 percent to be reduced by
50 percent. Such huge tariff reductions, will further decimate
the livelihoods of small farmers in Indonesia.

In negotiations, Indonesia said that they could consider the
Cairns Group proposal, but only if four staple crops are excluded
from any further bound tariff reduction commitments -- rice,
sugar, soya and corn. This was rejected by the Group.

The average bound tariff rate in agricultural products for
Indonesia is already low, at 47 percent, with the exception of
several staple crops.

When Indonesia indicated that it would not go along with the
Cairns Group proposal, various forms of pressures were put on
officials in Jakarta and in Geneva, by the leading developed
countries of the Cairns Group. These countries did not want
Indonesia to distance itself from the grouping. In Jakarta, their
ambassadors have been visiting their Indonesian counterparts and
also various ministers. Lower level officials have likewise been
lobbying Indonesian bureaucrats.

Why does Australia and New Zealand want Indonesia to stay in
the group?

Australia and New Zealand do not want Indonesia to distance
itself from the Cairns Group primarily because Indonesia is an
important market for the two big agricultural exporters since the
country in their neighborhood.

There are bilateral agreements between Australia and
Indonesia, such as various forms of investments, aid and
technical assistance provided by Australia. Such forms of
bilateral assistance has the effect of influencing recipient
countries into accepting the demands of the country providing
such assistance.

There is little compassion in the world of WTO negotiations.
It is riddled with political games, and pressures by the big
countries representing their corporations to gain markets in
other countries. For countries like Indonesia, pressures by the
bigger countries are not easy to stand up to given their
vulnerabilities (e.g. IMF loans etc), unless they are
counterbalanced by pressures from the ground at home.

There are already many signs of disquiet in the country. This
is not surprising given the silent crisis of hunger. Seventy
percent of Indonesian children under five are categorized as
malnourished in a country where at least 32 million out of a
population of 210 million were categorized by the UN as living
below the poverty line last year.

Indonesia's recent years of agricultural liberalization has
led to the explosion of food imports in staple crops. Indonesia
is now one of the largest rice importers in the world, importing
at least 10 percent of its rice. Between 1995 to 2001, sugar
imports have increased by 45 percent and soya imports by 40
percent.

Overnight, the livelihoods of farmers provided by the
agricultural sector have been destroyed. This is serious, in a
country where over 100 million people live in the rural areas,
and the majority on subsistence farming. Indonesian officials are
fearful that policies which further aggravate the crisis will
plunge the country into political instability.

In the first place, why should Indonesia liberalize, when the
biggest exporting countries are slapping increasing amounts of
protectionist subsidies on their farmers, and selling their
products at below the cost of production in Indonesia?

The U.S. and the European Union are the prime perpetrators of
protectionism. The U.S. exports corn at prices 20 percent lower
than the cost of production, and wheat at 46 percent below cost.
Supports for soya in 1998-2000 total 20 percent the value of
production. In May this year, the Bush Administration adopted a
Farm Bill promising to raise spending by an additional US$73.5
billion over the next decade, in addition to the existing
supports.

Importantly, three of the four crops that Indonesia has asked
for exemptions in tariff reductions are targeted to be given
additional subsidies through the U.S. Farm Bill -- rice, soya and
corn. As if this is not enough of a slap in the face to its
trading partners like Indonesia, the U.S. Senate on Sept. 10
voted for an additional $6 billion in aid for corn and wheat
farmers hurt by drought.

The EU also subsidizes its farmers heavily, with subsidies
hitting 45 billion Euros a year, nearly half of its 98 billion
Euro budget. The EU is a net exporter of sugar, yet subsidizes
sugar to the tune of over 50 percent of the value of production.
With enlargement creeping up upon them by 2004, total spending on
agriculture will no doubt significantly increase.

The Indonesian government position -- calling for the
protection of rice, corn, sugar and soya -- does not meet up with
the demands of farmers' groups within Indonesia. Food security
cannot be narrowed down to four crops if small subsistence
farmers' livelihoods based on biodiversity are to be protected.
Small farmers in Indonesia and in the world community are calling
for the total exclusion of WTO rules from agriculture. Indonesian
NGOs are also calling for Jakarta to get out of the Cairns Group.

Whether or not life improves for the malnourished Indonesian
children, depends eventually on whether Jakarta heeds the food
sovereignty position taken by those it purports to represent.
Nevertheless, Jakarta's brave attempt to stand up to the big
bullies in the negotiations must be supported as one step in the
right direction.