Cancun Failure
Opportunity to Revive the Food Sovereignty Concerns in Asia
- Dr. T.N. Prakash Kammardi

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The issues related to the food sovereignty which encompasses access to healthy food, livelihoods of peasantry and environmental sustainability are all hovering around the rice based farming system in Asia. The Asian countries over the years have painstakingly undertook agrarian reforms and pursued food policies which were aimed at achieving social equity, livelihood, employment and food security in Asia. However, forced liberalization programs since 80s and the consequent imposition of rigorous rules of WTO's Agreement on Agriculture have been eroding the very spirit of food and agrarian policies in Asia. The virtual collapse of the fifth WTO Ministerial meet at Cancun must give sufficient scope to think seriously reviving the food sovereignty issues in Asia region. The paper, by taking the empirical evidences from eight prominent Asian countries, tries to throw light on these issues and suggest alternative policies and programs to strengthen the food sovereignty in the region.

I. Governments' Interventions and Food Sovereignty Concerns:

The Asian Countries with a high degree of homogeneity in socio-economic as well as agro-ecological features and have a more or less similar approach to strengthen the food sovereignty concerns in the region. Eight prominent Asian countries; China, India, Indonesia, Philippines, Pakistan, Vietnam and Bangladesh put together account for around half of the world population and 60 percent of the population in these countries live in rural areas. The Asian agriculture is predominated by the rice based cropping system and the issues related to food sovereignty which encompasses access to healthy food, livelihoods of peasantry and environmental sustainability are all hovering around the rice based farming in the region. Almost 80 percent of the world area under rice crop is occupied by thesee eight Asian countries and India and China put together cultivate nearly half of the rice cropped area in the world. Owing to high pressure of population on land (around 0.29 hectare per person), small holding size (1.50 to 3 hectares) and inadequate development of infrastructure like irrigation (in less than 40 percent of the cropped area), average productivity of rice in the region is very low. Baring China, rice productivity in all other Asian countries is lower than the world average. For instance, average productivity of rice in India, Philippines, Thailand, Pakistan and Bangladesh is hovering around 28 quintals/hectare as against the world average yield of 38.45 quintals per hectare. The average rice yield in Japan and USA is 64 quintals and 66 quintals respectively. It is interesting to note that, in spite of this variation in production and productivity, these Asian countries remained active partners, in terms of exports and imports, in the trade of rice. China, India, Thailand, Vietnam and Pakistan are the major exporter of rice where as, Indonesia, Philippines and Bangladesh are relegated to net importers of rice today.

These Asian countries embarked progressive agrarian reforms, food and agricultural policies best suited to their specific socio-economic situations. Though, these measures were varied from country to country, in their approach, there was a high degree of commonalty in their objectives. In all these countries, due to high pressure on arable lands, progressive land reform measures to correct defective tenancy and redistribution of lands were undertaken first. The land reforms were envisaged in terms of assigning the ownership to the tillers, with a ceiling on the holding in countries like India, Thailand and Taiwan. It took the form of the state control and collective ownership in Communist countries such as China and Vietnam. The initiation of so called Green Revolution followed by the reforms in the supply of credit, inputs , distribution and marketing of farm outputs were undertaken during the same period in these countries.

There was also equal degree of commonness in the polices and programs pursued to strengthen the agricultural base in Asia. In almost all the Asian countries, the government 'intervention' in production, procurement, stockholding and distribution of food grains was very high. This was intended to protect the interests of peasants as well as majority of poor who otherwise were unable to bear the volatility in the prices and supply of food grains resulting from the free market forces. For instance, Government of India provides protection in the form of Minimum Support Price (MSP) for 24 commodities that includes mainly cereals, pulses, oilseeds and other essential crops. These crops not only form major components of food and nutritional basket of the masses but also account for about 82 per cent of the gross cropped area and almost 75 per cent of the total value of crop output produced in India. The buffer stock operation and Public Distribution System (PDS) of India is hailed as the most elaborate one in the world as it encompasses the entire poor people in the country. India was holding a comfortable buffer stock of 20 to 40 million tons for food security purposes through the last decade. The rice alone formed nearly half of the buffer stock maintained in India.

Other Asian countries such as Vietnam, Thailand, China and Indonesia were also following such 'market intervention' programs to protect their peasantry as well as consumers. Imposition of limits on private trading and stocking, levies on rice millers and restrictions on movements on essential food items were pervasive in all Asian countries. For instance, there was a heavy levy, up to 75 percent, to procure rice from private mills and restriction on its movement in parts of India until recently. In Vietnam too, the trade being under monopoly control of the state, there was a restriction on the movement of food grains internally. In China, the domestic market is totally under the control of state grain agencies. Even the foreign trade too was under the government control so as to protect the interests of domestic produces and consumers in these countries. For instance, export of common rice, other than Basmati, were banned from India until 1994. Vietnam too imposed such restrictions and export quotas to put a check especially on private trade which were continued until recently. Thailand, the traditional rice exporter in the region, followed export quotas along with an export tax called 'rice premium' until 1986. Malaysia too had relatively higher tariff to protect domestic rice sector. The so called STEs (State Trading Enterprises) like the FCI (Food Corporation of India), National Food Authority in Philippines, and BULOG in Indonesia have been undertaking the onerous responsibility of operationalising the government's commitment with regard to procurement, distribution and the trade so as to protect the interests of domestic producers as well consumers alike. The BULOG being the largest rice importer in the world had retained its monopoly control over imports until 1999 (Gulati and Narayanan, 2003).

In addition to the direct 'interventions', the Asian countries, in order to ensure the timely production and adequate supply of food commodities, were also providing supports and 'incentives' in various forms to the farmers. India has given input subsidies and support price (subsidy to output) to agricultural sector to the extent of US $ 7247 million which formed around 1.7 percent of Nation GDP or around 6.5 percent of agricultural GDP in the year 1999. Item wise 45 percent was electricity subsidy given to energies the pump sets, 20 percent fertilizer subsidy, 19 percent food subsidy and 17 percent for canal irrigation (Acharya, 2000 and DES, 2002) Rice occupies around 36 percent of the total cropped area under food grain and around 44 percent of the irrigated area in India. Adoption of HYVs was around 72 percent and rice consumed almost 40 percent of chemical fertilizers used for agriculture in India (Prakash and Virchow, 2003). In addition, there were other forms of supports such as credit at low interest rate, crop insurance, marketing services to ensure the timely availability of food grains in adequate quantities. Such policies and programs were very pervasive in the Asian region. This was very crucial in the context of very low earning and high level of poverty prevailing in the region. As per the recent World Development Report (2003), the Asian region is marked by the high incidence of poverty as measured through the international mark of earning less than US $ 2 per day per person. More than 65 percent of the population in the Asian countries couldn't cross this poverty line in the recent year (2001) which was highest (88 %) in Bangladesh. Equally important aspect is the spending habit of the poor in the region. On an average, more than 55 percent of the meager earning of the Asian population was going to buy food item alone which was highest (65 %) in India. The poor farmers, agricultural laborers and the urban poor are the three main common poor categories who spend more than 50 percent of their earning on food item alone in the region.

The success of agrarian reforms, food and agricultural policies pursed in Asian countries was mixed. Though they were criticized for half hearted faulty implementation, concerns behind them were never questioned. Even though the Green Revolution model of development pursed by the Asian countries was criticized severely for its environmental 'excess', long run unsustainably, it's contribution to increase agricultural production and to achieve the much needed self sufficiency in food needs was acknowledged and widely appreciated. Moreover, these policies and programs were not merely related to trade rather they had strong bearings on the food sovereignty issues with the Constitutional obligations in many cases. For instance, countries like India, China and Vietnam have chosen the planned and socialist pattern of economic development in varied degrees and contexts. India, went on to the extent of including the term socialism in the preamble of its Constitution. This is being interpreted by the Supreme Court of India, the apex legal body in the country in several occasions for its operational connotations that too in the context of the implication on food sovereignty issues ! The Apex court, while giving its ruling in 1978 expounded the scope of the word socialism as "..to provide a decent standard of living and security to every one from cradle to grave" . In another ruling in 1997, the Court elaborated the planned economy as the one "which takes note of time and space considerations in the distribution and pricing of output". In China and Vietnam, due to their strong political affiliations to Marxian ideology, the state intervention in the matter related to food security, employment and other equity concerns was total. So is the concerns of the countries on the food sovereignty issues in Asia.

II. Liberalization and WTO - Collapse of Food Sovereignty Concerns:

Structural adjustment and liberalization programs pursued at the dictates of IMF and World Bank since 80s have undermined seriously, the very spirit of the agrarian reforms, food and agricultural policies in Asian region. Agricultural trade liberalization pushed by the WTO in the mid 90's further eroded the capacity of domestic agriculture to provide food and livelihood security in the region. The greatest assault was on the supports provided to Asian farmers as discussed above. As per the dictates of IMF and World Bank, these countries, to comply with the structural adjustment measures of restricting the fiscal deficits have started reducing gradually the support given to the farmers. This has resulted in sharp increase in the cost of cultivation, ultimately pushing the poor peasantry deeper in to indebtedness and penury in the Asia region. Signing of GATT and consequent implementation of WTO's AOA forced these countries to remove all sort of restrictions especially on food items, and open up their economies for cheap imports from outside. This has virtually put a death knell on the agrarian economies in Asia. The cases of a few Asian countries amply demonstrates this.

In Indonesia, the government withdrew all forms of supports given on agricultural inputs: fertilizer, seed, pesticides and fungicide in the late 90'. In the mean time, the meager credit given to agriculture was also reduced from 1.2 percent to 1 percent of the total credit disbursed by Bank of Indonesia. As a result, the cost of production of rice has increased by almost 50 percent in Indonesia. This double blow paralyzed the farmers to such an extent that they could not tackle even the pests and disease epidemics effectively. For instance, rice crop during 1999 season hit with severe attack of stalk borer. In the absence of input and credit subsidies, farmers were unable borrow money at a soaring market interest rate of 18 percent to buy and apply pesticide to protect their rice crop (Prakash, 2003).

It is very important to note that a country like Indonesia was in fact, 'taxing' rather than 'protecting' its farmers. Protection or otherwise given to agricultural in a country is normally estimated, under WTO parlance, through what is called as the "Nominal Protection Co-efficient" (NPC). It is nothing but a simple ratio of domestic price of an agricultural commodity to the price prevailing in the international market. A NPC value of more than one for a commodity say, rice, implies that the domestic farmers receive more than what is prevailing in the international market, and hence the particular crop is considered as 'protected" in that country. It is important to note that the NPC for rice in most of the Asian countries, including Indonesia was less than one in the recent year (1998-99). As per the report of Food Research Institute, Copenhagen, the NPC was 0.67 for China, 0.76 in India, 0.82 in Vietnam and 0.85 in Indonesia, implying that rice growing farmers in these countries were 'unprotected' or 'taxed' to the extent of the difference between the unity and NPCs in the respective countries. The extent of support or protection given to rice in the developed countries was glaring. The NPC of rice was 1.15 in USA, 3.78 in Korea and a huge 6.50 in Japan during the same year (Gulati and Narayanan, 2003).

Adding salt to the wound, the market for rice was decontrolled by scuttling the monopoly power of Indonesia's STC i.e. BULOG in this respect. Indonesian market was opened for free import of rice that too with almost zero import duty during the late 90's. This has lead to the flooding of cheap rice imported at a price lower by almost 25 percent compared to the domestically produced rice. In one year, almost 6 million tons of rice was imported to Indonesia. The end result was most glaring; Indonesia from the position of being the world's 9th largest exporter (just prior to 1995), reduced to the level of world's biggest importer of rice in the recent years. Indonesia requires around 30 million tons of rice every year to feed the starving population as against the just 20 million tons supply of rice available in the world market in the recent years! All these are costing, an estimated loss of around US $ 2 billion to Indonesia's economy annually (Prakash, 2003).

The experience of Thailand in this respect is appalling in a slightly different context. Thailand was known for its bio-divers, traditional rice farming. In the course of time it has emerged as one of the leading exporter of rice in the world. Though its position was consolidated during the TWO era, its peasantry was made to suffer heavily from the woes of liberalization and globalization. The Thai government, wedded to the polices of liberalization, has withdrawn the supports to farmers. In the absence of such incentives, the cost of production, as happened in other countries, was also increased in Thailand. For instance, cost of producing a kilogram of rice has increased to a height of 3.30 baths where as the market price which the farmers could expect, did not cross 3.52 baths in the recent years. The cost to purchase agro-chemicals alone formed around 36 percent of the cost of cultivation of rice in Thailand. This again lead to a low return and indebtedness of the peasantry. Currently, almost 73 percent of Thai farmers are having the debt ranging from 5000 bath to 2,50,000 bath and over 0.8 million farm families are not in a position to continue with agriculture. The depeasantisation is increasing at the rate of 4 percent annually. The rice trade is controlled by the patronage of merchants, middlemen and multinationals who garner major chunk in the export earnings in Thailand. In addition, they also have a tight control over the price and distribution of the key inputs like seed, fertilizer and pesticides. In this way, though the trade liberalization appeared to benefit the Thailand, penury of its peasantry has mounted. The future of Thai rice export, on the other hand, appears to be very bleak. The export price of Thai rice has decreased drastically: from US $ 387 per ton in 1996 to US $ 273 per ton in 1999. If this trend continues, Thailand economy may have to face twin collapse; domestic rice farming and foreign rice trade simultaneously. The government to comply with the market access obligation of AOA had already reduced the tariff rates and removed all forms of import barriers on 23 items which include rice also! Hence, one should not be surprised, if Thailand too meets with the same fate of Indonesia, from exporter to net importer of rice very soon (Prakash, 2003).

Unmindful of the serious repercussion of disruption of national food self-sufficiency, some Asian countries have been falling, deliberately, in to the traps of the globalization. Lured by the so called 'comparative advantages' some Asian countries are giving up, 'voluntarily', the cultivation of food crops to grow export oriented commercial enterprises like floriculture. For instance, under the 'Philippines 2000 Program', the country has planned to reduce the area under rice crop by 1.2 million hectare and replace with crops like cut flowers and asparagus! The Philippines is a net importer of rice, where the productivity of rice is lowest in the region. Cheap import of around 2 million tons of rice in 1998 crashed the domestic price by almost 50 percent. Instead of taking corrective measures to enhance the yield and achieve the much needed self-sufficiency in rice production, the mindset of the policy makers in Philippines appear to by typically of 'elitists' one. Such hollow slogan as "grow rose and import rice" seems to getting momentum in Philippines. The fallacy of such a program was amply demonstrated in India.

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