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					is an international anti-poverty agency working in over 40 countries, taking sides with poor people to end poverty and injustice together. ActionAid Asia Regional Office 13th Floor, Regent House, 183 Rajdamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Telephone: +66 2 651 9066, Fax: + 66 2 651 9070 International Secretariat Office PostNet Suite #248, Private bagX31, Saxonworld 2132, Johannesburg, South Africa Telephone: +27 11 731 4500, Fax:+ 27 11 880 8082 E-mail: mail.jhb@actionaid.org www.actionaid.org

Food Foremost

A Call for Action at the ASEAN Summit

Food Foremost
A Call for Action at the ASEAN Summit

February 2009

13 reasons for price volatility

04 executive summary

to the food crisis

20 regional responses

08 the poor losing across the board

25 approaches and recommendations

www.actionaid.org

accelerate progress towards the eradication of hunger through agricultural and rural development. Most SEA countries deserve praise for reacting quickly to the emergency caused by rising food prices in 2008. However, these short-term measures have not healed the wound and the region remains highly vulnerable to future food crises. Now it is time that SEA countries take measures both regionally and nationally for a sustained impact. They must take steps to achieve an accelerated and permanent reduction in the number of hungry people over the medium term, while also addressing long run causes of food insecurity such as uneven distribution of resources and endowments, climate change and inequality. Governments must focus on how to protect the hundreds of millions of small holding farmers, the millions of urban poor and the rural women. They must enable farmers to adapt to suitable approaches such as regenerative agriculture, appropriate technologies in agriculture. There must not be another devastating green revolution, but a complete transformation in asset ownership and access to credit markets instead. Governments must face the challenges of growing populations to meet their demand, and ensure food availability. They must limit biofuel production and make public land and waterbodies available to the landless – especially to women who own less than 5 percent of the total land in SEA. The simulation conducted for the current report suggests that the number of hungry and food insecure people in the South East Asian (SEA) countries due to price escalation could rise to 112 million, an increase of 28 percent. ActionAid in its earlier report of mid-2008 estimated that the number of hungry and food insecure people in the world could soar to 1.7 billion, representing 25 percent of the world’s population. Although the financial crisis has brought drops in most food prices, it has made the overall food security picture worse rather than better. Rising unemployment and falling income will exacerbate hunger, while the FAO forecasts that farmers are under-planting due to tight credit and falling producer prices. These factors indicate that price volatility will continue with another steep rise in rice prices predicted this year by the International Rice Research Institute1. This is partly due to production uncertainty, attendant with strong demand growth as people switch to cheaper staples. This situation calls for attention and action. It has revealed how fragile is the balance between supply of food globally and the needs of the people. It has exposed the fact that our leaders have not lived up to their promise to This situation has placed unique challenges in front of SEA. It has made SEA leaders stand in front of a question of their lifetime.

executive summary
Food prices have been on the rise for last few years. While this is a global phenomenon affecting all people in the world, some have been more affected than others and it is the poor who are hit the hardest.

The number of hungry

Asian countries due to price escalation could

and food insecure people in the South East

rise to 112 million

A Call for Action
Tackling the food crisis requires a concerted effort from various agencies at the national, regional, and international levels. We call upon the governments of the ASEAN countries for: 1. Re-orienting the ASEAN Food Reserves from Trade-Focused to Humanitarian-Oriented. The current East Asia Emergency Rice Reserve (EAERR) is more trade-oriented rather than a scheme to achieve a humanitarian objective since repayment for the received rice must still be made by the recipient country. The scheme becomes an emergency rice purchasing programme rather than being a rice pool or food aid programme for the region. For poorer countries that face such disasters, repayment for such food assistance seems difficult. In addition, in time of the food price hike, it is under question whether EAERR member countries will be willing to supply the scheme with their rice stocks and sell the rice to poorer countries at discounted price, when they can sell their rice on the international

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market at a high marked-up price, because the stockpiling of rice under the EAERR scheme is done only on a voluntary basis. A re-orientation of the EAERR to make the programme become more humanitarian rather than trade-oriented is therefore deemed highly desirable. 2. Promoting Sustainable Agriculture and Organic Farming. Apart from its economic and social benefits, sustainable agriculture using little or no chemical inputs supports the fight against global climate change by reducing the carbon footprint. It also contributes to reduced consumption of fossil fuel energy, especially nitrogen fertilisers, as well as reduced carbon dioxide emissions, nitrous dioxide, and soil erosion while increasing carbon stocks. Many Asian governments have endorsed and promoted organic and low-input agriculture in their countries, although the growth of organic farming has been a result of the pull factor which is the booming trade of organic products in the West. Most production of organic crops in Asia is then geared towards exports. A more sustainable solution is to promote consumption of organic and low-input products within one’s country, to reduce the problem of food miles i.e. food travelling a long distance to be supplied to faraway markets, causing CO2 emission and damages to the environment. 3. Moratorium on Biofuels. Biofuels were a major cause of the rising food prices in 2007-8, as land previously dedicated to food production was shifted to the production of biofuel crops and commodities such as corn, palm oil and sugarcane previously produced for human consumption were bought up by biofuel producers. Biofuels compete with food production in terms of land, agriculture inputs, and the use of outputs. Therefore, a moratorium on biofuel production should be imposed for maintaining food sufficiency for the people. 4. Tackling the Problems of Land Ownership and Land Grabbing. One of the causes of poverty in developing countries’ farming population is the lack of land. Most poor farmers either cultivate crops in small plots of land, or rent the land from nearby landowners. To tackle rural poverty, a redistributive land reform policy is needed so as to grant landless peasants the right to feed themselves and earn sufficient income for their families. ASEAN countries are also experiencing corporate land grabbing. ASEAN must clearly define its stance on the issue and collectively tackle the problem so that food security can be sustained in the region. 5. Promoting Urban Agriculture and More Productive Use of Land. The rapid growth of cities encroaches on land traditionally dedicated to food production. Rural food production is predicted to decline substantially by 2010 as a result of urban area expansion. Urban agriculture thus becomes an important tool for countries to feed their rising urban population. Despite its benefits and the growing number of projects being implemented in various countries, urban agriculture continues to receive considerably little 6.

attention from the governments. With future food crises foreseeable, and the persistence of land ownership faced by farmers, a systematic urban land zone planning should be put into place to ensure availability of land for production of food for the population. Promoting equitable income distribution to the poor as part of the regional economic integration. The creation of the ASEAN Economic Community (AEC) that aims to create a single market in the region by liberalising the movements of goods, services, investment, and skilled labour should be accompanied by strong social integration of all socio-economic classes of citizens so that envisaged prosperity generated by economic integration is shared equitably by the socially and economically marginalised groups of the population. For example, there is no mention of small farmers and unskilled labour in the current AEC text. Instead, protection of larger stakeholders is being promoted in the AEC blueprint. Less powerful stakeholders such as farmers continue to be left out of the regional integration process. The AEC must address the interests of people, particularly those of disadvantaged section to make regional integration initiative meaningful, without confining its benefits only to the governments and large players in the private sector.

Biofuels are a major

cause of the rising food price

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This compares to 15 percent in Malaysia, 26 percent in Indonesia and Thailand, 28 percent in China, 33 percent in India, and around 40 percent in Vietnam, according the U.S. Department of Agriculture.2 The US also follows a similar structure as that of Singapore, considering as little as 9.9 percent of American citizens’ income is spent on food.3 This is partly because the US agriculture is heavily subsidised by the government, and this has driven down the prices of essential crops such as corn and soybean being sold in the US market. The poor are much more vulnerable to food price volatility than the rich.

the poor losing across the board
The rise of food prices has had differing impacts on countries in Asia. While some countries appear to be winners of the food crisis, others, especially those that rely much on food imports, consider themselves worse off when the prices of food dramatically rise. The group most hard hit by the crisis is the poor since a large percentage of their income is spent on food compared to that of the wellto-do. This trend follows what is called Engel’s law, which states that as the economy develops, less money is spent on sustenance such as food. Hence, we witness the differences in food spending between rich and poor countries. This is also visible within ASEAN. Singapore, for example, spends an average of only eight percent of its income on food.

The Poor Hit The Hardest
The simulation conducted for the current report suggests that the number of hungry and food insecure people in the South East Asian (SEA) countries due to price escalation could rise to 112 million, an increase of 28 percent. The current estimate is based on the number of poor people living below US $ one per day in Southeast Asia. A number of other factors have been considered: the proportion of total population and the proportion of poor people in Southeast Asia compared to the world population while reaching at the number. This estimation follows a methodology developed by University of Minnesota. According to that modelling exercise, after adjusting other factors, an increase of 1 percent in food price leads to 16 million additional hungry people in the world. Accordingly in Southeast Asia such a rise of 1 percent would result in 1.55 million additional poor. For our estimation, we took a 20 percent rise in food price. Therefore we arrived at a figure of about 31 million. The inflation rate has had sharp rise in the mid 2008 and then had a decline in the late 2008 and dearly 2009. However, every estimate shows the food price index went much above than 20 percent during the above mentioned time. However, yearly food price (point to point inflation) rarely went down below 20 percent throughout the region. Our simulation exercise for the world in mid-2008 suggests that the number

The hungry and

food insecure people could
increase by 28%

Table 1: Winners and Losers of the 2008 Food Crisis
Winners Country
Thailand Viet Nam

of hungry and food insecure people could soar to 1.7 billion, representing 25 percent of the world’s population.

Position
Net Rice Exporter Net Rice Exporter but rice export was banned in early 2008

Losers Country
Indonesia The Philippines

Position
Net Rice Importer Net Rice Importer

Although the financial crisis has brought drops in most food prices, it has made the overall food security picture worse rather than better. Rising unemployment and falling income will exacerbate hunger, while the FAO forecasts that farmers are under-planting due to tight credit and falling producer prices. These factors indicate that price volatility will continue with another steep rise in rice prices predicted this year by the International Rice Research Institute.4 This is partly due to production uncertainty, attendant with strong demand growth as people switch to cheaper staples.

Myanmar – Traditionally a small net rice exporter, but faced food insufficiency due to Cyclone Nargis in 2008. Cambodia – Newcomer in rice export although still dependent on food aid from the UN World Food Programme. A rice export ban was imposed in 2008 to secure sufficient food for the locals.

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Burned once (e.g. the price for 100 percent grade B Thai rice fell to US$575 per tonne in late October 2008 from a US$1,080 per ton in April 2008), these farmers are reducing input use for their 2009 crops. The credit crunch will also make it difficult for farmers around the world to secure credit for purchasing inputs. Signs of this trend have already emerged. Already, the Philippines has lowered its 2009 rice production estimate by almost four percent because of lower input use as farmers struggle to secure credit to buy inputs.5

Table 2: Thailand’s Imports of Fertiliser and Herbicides
Import of Chemical Fertilisers Year
2000 2002 2004 2006 2008 (Jan.-Jun.) 2,514,347 43,459 76,723 11,860

Import of Herbicides Value (Million Bath)
18,229 22,112 33,244 35,377

Volume (Tonne)
3,198,290 3,669,353 3,882,964 3,684,179

Volume (Tonne)
51,344 70,158 99,839 101,854

Value (Million Bath)
6,417 9,202 10,372 12,966

Small Farmers Losing
It is generally thought that as the price of rice increases, farmers would have benefited a great deal from the crisis. However, reality may differ from the general perception. For example, farmers in Surin province, one of the best areas in Thailand to cultivate good-quality Jasmine rice, cited that they had sold their rice crops before the increase of the market price of rice. Ms.Kanya Ornsee, Chair of the Environmental Conservation group in Surin and an organic farmer said, ‘The price of rice has increased a great deal now, but farmers who cultivate rice once a year6 do not benefit from the rising price because they have sold all of their rice produce since December 2007-January 2008 at the farmgate price of 7-8 Baht per kilogramme without knowing that the actual price was 20 Baht per kilogramme, the record price in its history. Only the merchants, capitalists, exporters, and rice mills have benefited from the situation. This year, Surin farmers are hurt the most because they sold their entire rice stock at such a cheap price, and not keeping any portion of rice for their family consumption. Now they have to buy rice from the market to eat, at the cost of 40 Baht per kilogramme. Is it worth it? It’s like we have completely lost out and what we have received does not make up for the rising costs of living.’ 7 Farmers felt they did not benefit from rising rice prices because of the rising input costs such as fertilisers and pesticides that also rose at phenomenal rates, causing the farmers to incur high debts as before. A 2007 study8 of rice production of farmers in Bang-Kud Sub-district, Chainat province revealed that the average agricultural debt incurred by a farmer’s household in 2006 was THB 116,585 (US$ 3,532.87), a rise from THB 31,387 (US$ 951.12) in 1994. A cal9

Source: Biothai (2008), Agricultural Policy and the Survival of Thailand’s Agricultural Sector and Small Farmers.

Most farmers in the Bang-kud sub-district had no land ownership and rent paddy fields from landlords in the area to cultivate rice in each season. Upon the harvest, farmers are generally compelled to sell their produce immediately without being able to store it for later sale and for higher price because of their lack of space to dry the rice (dried rice commands higher prices than the freshly harvested rice which contains a high level of moisture) and lack of storage. However, according to Witoon Liamchamroon, Director of Thai NGO ‘Biothai’, the CP seeds have been tested to produce only 900 kilogramme per rai, which is significantly lower than what is advertised by the firm. Accompanying this is the high cost associated with the seeds, which cannot be saved for re-plantation in the next season, since the seeds have been created to be sterile. Therefore, farmers need to purchase seeds from the company every year. Witoon estimated that the cost of seeds alone would cost the nation more than a hundred billion Baht a year, an astronomical sum to be spent considering seed saving has been practised by farmers from generation to generation.11

culation of farmers’ expenses found that the highest input cost (45.97 percent of the total costs) paid by the farmers was chemicals namely fertilisers, hormones, and pesticides, followed by agricultural machinery (22.78 percent) such as rental of tractors, sowing machines, harvesters, transport trucks, and fuel. Third was the land rental fee (21.85 percent), followed by rice seeds (8.74 percent), and lastly labour costs (2.65 percent).10 These figures reflect the overall situation of the entire country, as Thailand’s agriculture has been increasingly relying on the use of chemicals, most of which are imported. From the year 2000 to 2008 (January-June), the value of imported chemical fertilisers rose from 18.2 to 43.4 billion US dollars. The value of imported herbicides almost doubled during the same period, from 6.4 to 11.8 billion US dollars.

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Urban Poor Population with High Spending on Food
An Oxfam and ActionAid Viet Nam study12 estimated that, for a rice exporting country, a 10 percent rise in food prices would increase the average household welfare by 1.7 percent and makes the national poverty rate decline by 0.6 percent. If taken the rise in rice price alone, a 10 percent increase would also raise the average household welfare by 0.6 percent and decreases the national poverty rate by 0.1 percent. However, the benefits of the food price hike do not spread evenly to all groups of the population, as it was also estimated that the 10 percent increase in the price of rice would reduce the welfare of the rural households by 54 percent, and by 92 percent in the case of the urban households. In order to cope with the declining purchasing power and income, women have to search for additional employment to earn an extra income to feed their families. This may disrupt arrangements for childcare and breastfeeding. Moreover, the rising food prices also mean less money can be spent on education and healthcare. The current rate of out of pocket expenditures on health in Viet Nam was approximately 62.8 percent.13 This means that declining purchasing power would automatically lead a family to cutting other essential expenses such as health and education.

reasons for price volatility
Global Food Production Situation
The Food and Agriculture Organisation of the United Nations (FAO), as early as July 2007, had warned of a possible food price crisis in the coming years. To boost food production in the immediate term and prevent the prediction from being realised, the organisation launched in December 2007 what is called the Initiative on Soaring Food Prices which involved distribution of seeds, fertilisers, animal feed and farming tools to small farmers.16 Yet, such efforts have not been effective enough to address the outbreak of the severe food price crisis in 2008. The World Food Programme stated that it had to reduce food rations it provided to 73 million people in 78 countries who depended on its food handouts this year. Smith and Edwards17 reported that the global food prices had risen by 75 percent since 2000, with the price of wheat increasing by 200 percent and corn prices had reached its peak in 12 years. This meant that the prices of meat, poultry, eggs and dairy products had also risen. Countries in Asia such as Cambodia, China, Viet Nam, India and Pakistan had banned their rice exports to ensure sufficient food supplies for their own citizens. Consequently, the world witnessed global food riots and protests in Mexico (tortilla riot), Bolivia, Yemen, Uzbekistan, Yemen, Indonesia (soybean riot)18 , West Bengal, Senegal, Mauritania, Mozambique, Haiti, Ivory Coast, Cameroon, Niger, Burkina Faso, Egypt19 and other parts of Africa.

in the price of rice would reduce the welfare of the rural households by 54 percent, and by 92 percent in the case of the urban households

10 % increase

As a measure to curb inflation, the Vietnamese government implemented several projects many of which targeted the underprivileged. These projects covered provision of free rice to those affected by natural disasters and food shortage; extension of loan repayment periods for households that suffered from crop failures caused by diseases and bad weather; provision of cash assistance (equivalent to five litres of kerosene oil per year) to ethnic minority groups and poor households in areas with no electricity; support to fishermen for purchase/ building of ships, replacement of engines, and ship insurance; increase in the health insurance premium for the poor, from Vietnamese Dong (VND) 80,000/ person/year to VND 130,000/person/year, and others.14 As a result of these measures, consumer price index (CPI) in June 2008 began to decline, with a surge in export and the return in foreign direct investment (FDI). Despite the improvement in the situation, more long-term measures to counter poverty alleviation are necessary. A revision of the current poverty line of VND 200,000/person/month in the case of the rural population, and VND 260,000/ person/month for the urban population is essential to project a more correct picture of the poor in Viet Nam, given the high inflation rate in the past two years. While there is a government proposal for an increase of the poverty line by 50 percent to VND 300,000/person/month, the figure at the grassroots-level suggested a 200 percent increase to be more appropriate, or approximately VND 400,000-500,000/person/month.15 Once the poor or ‘near-poor’ have been correctly identified, more social protection programmes should be taken to cushion the impacts of the food crisis on these groups.

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Table 3: Increases in Prices of Staple Foods in Selected Countries, January 2007-April 2008
Country
Bangladesh Cambodia Cote d’ Ivoire Haiti Indonesia Mexico Pakistan Philippines Sri Lanka Tajikistan

the poor in developing countries, who cannot afford purchasing food to feed their families while their wages remain the same, or even reduced as some workers were laid off as a result of the economic slow-down. Causes of the food crisis were not only temporary and short-term, as mentioned above, but the roots of the problem are deeper and more systematic than when considering the problem at first glance. Low agricultural productivity in developing countries is part of the causes. According to UNCTAD, productivity in many LDCs today is lower than it was 50 years ago. One of the reasons that had to do with developing countries’ policies of abolishing or weakening key institutions that support their agricultural sector, such as abolition of statesupported agricultural extension services, marketing boards, and state subsidies for agricultural inputs such as seeds, pesticides, herbicides and fertilisers. This is mainly to follow the dictates of the international financial institutions such as World Bank and the IMF and international trade. But whereas developing countries have been imposed to reduce their alreadylow levels of agricultural subsidies, the amount of subsidies provided to farmers in the industrialised world remain large, which drives down global commodity prices. Discouraged by such low market prices, many farmers in developing nations feel discouraged and some of them were compelled to abandon farming altogether. According to UNCTAD, many traditionally food-exporting developing countries have become net food importers in the past 20 years.23

Staple Food
Rice Rice Rice Basic Food Palm Oil Tortilla Wheat Flour Rice Rice Bread

Price Increase (%)
66 100 > 100 50-100 100 66* 100 50 100 100

since 2004 the food price

has jumped at least 2.5 times

both nominal and real –

* Increase between November and December 2007. Source: Oxfam (2008) Double-Edged Prices20 Probably, the days of cheap food are over. In 30 years, the nominal food price throughout the world remained more or less the same, while the real food price went down four times. However, since 2004 the food price both nominal and real – has jumped at least 2.5 times.21

The top three reasons behind the price rise are:
1. One, Biofuel. This has led to the reduction of net availability of food for human consumption.

The Killers Behind and The Predators Ahead
Several factors contributed to the 2008 food crisis. Population growth, urbanisation, and rapid economic development in East and Southeast Asia have led to the long-term trend of increased demand for food. Droughts, floods, cyclones and other natural calamities particularly in 2008 have placed many countries particularly Myanmar in SEA on the world’s hunger map. High energy prices and the increased demand for biofuels have also raised food prices tremendously. Short-term government policies on restriction of rice exports in Viet Nam, Cambodia and India further exacerbated the crisis, leading to even greater rice price speculation resulting in the prices of rice doubling or tripling within a span of a few months. The global financial crisis that began in 2007 with the US subprime mortgage problem had also turned speculators’ attention away from the financial market and to the commodity market, which they considered a new kind of asset on which to place their bets.22 The result is the worsening livelihoods for many of

2.

Two, the cost push factors of fuel and fertiliser. Experts say cost push factor was due for many years.

3.

And three, the destruction of the agriculture system in general and cereal production in particular, in the developing countries.

Biofuel Raising Food Insecurity
Global climate change and sharply rising energy prices have forced the public and private sectors to look for alternative energy sources to replace the use of fossil fuels. Consequently, there has been a boom in the renewable energy sector and biofuel production and consumption in the past two decades. The term biofuel refers to all kinds of fuels generated from biomass, such as plants and organic wastes. First generation biofuels have now been developed from vegetable oils, agricultural feedstock and animal fats. Bio-ethanol and bio-diesel are the most known biofuels in this category. Some progress has been made in

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the development of second-generation biofuels from non-food feedstock including wood and micro-algae although it is widely forecast that these will not be commercially available much before 2020. The most widely used biofuels are made from rapeseeds, starches, sugarcane, cassava, coconut, palm oil and jatropha to name but a few. Biofuels are used to generate energy in power plants for electricity or heat consumption. Moreover, biofuels such as bio-ethanol and bio-diesel have demonstrated the potential to replace or at least reduce the use of crude oil in car petrol. However, there is now growing scientific evidence to suggest that given current technology, biofuels do not reduce greenhouse gas emissions when compared to fossil fuels. Life cycle assessments of biofuels are being continually refined and improved; the inclusion of direct and indirect land use change indicate that biofuels will contribute to increased emissions. Brazil began developing bio-ethanol from sugarcane in the 1970s with an objective of reducing its reliance on imported oil from the Middle East. However, today Germany is the world leader in biodiesel production, with production capacity in 2007 expected to reach 3.7 million tonnes. In 2008, the European
24

to have been the most important single factor behind the food price crisis, at least for its effect on current prices and market speculation. IFPRI estimates that biofuels have increased food prices by 30 percent (a World Bank study put the figure at 75 percent). ActionAid calculates that, globally, 30 million more people are now hungry as a result of biofuels and a further 260 million are at the risk of hunger. In the South East Asian context, the price of palm based cooking oil increased by over 40 percent in 2007. Whilst beneficial to small-scale producers, this also resulted in higher food and fuel prices, provoking public demonstrations in Jakarta and elsewhere. The expansion of palm oil has also been at the expense of tropical rainforests and peat-lands with resultant loss of habitats, biodiversity and homes to indigenous people. These are also very important carbon sinks. One study on palm oil in Indonesian peat-land tropical forest found that it would require 420 years of biofuel production to pay back the carbon debt that is released from the soils and vegetation. Because of the EU’s new 10 percent target, it is estimated that the Union will have to import an extra 10 billion litres of vegetable oil to meet demand, and much of this will come from South East Asia. Specifically in Indonesia, the government has earmarked 40 percent of palm oil production for biofuels and, together with Malaysia, she hopes to supply 20 percent of EU bio diesel demand in the future. But the interests of plantation owners, companies and politicians have already brought biofuels into direct confrontation with local and indigenous communities, including massive environmental impacts. The United Nations has already warned that five million indigenous people in West Kalimantan are in threat of losing their land from biofuels expansion. It is time to stop the headlong rush to biofuels production, and to assess the impacts to date. But clearly much of current production is unsustainable in terms of impacts on the environment, on people and on food security. A more sustainable approach is required that balances both local food and energy needs.

It would require

of biofuel production to

420 years

pay back the carbon debt
that is released from the soils and vegetation

Union set a target that by 2020, 10 percent of the EU’s transport fuel will be met from ‘renewable energy sources’ (i.e much if not all of this 10 percent will be met from biofuels). To meet both increasing domestic and global demand, countries such as Indonesia, the Philippines and Malaysia are among those in South East Asia that have expanded production. Not surprisingly, in the Asia-Pacific region, bio-gas production rose by 17.3 percent between 1992 and 2005, the highest growth rate among all energy sources.

bio-gas production rose
by 17.3 percent between 1992 and 2005

In the Asia-Pacific region,

Malaysia is one of the two major palm oil producers and has issued 91 licenses for bio diesel manufacturers and announced its plan to subsidise biofuel sales. Indonesia, the other major palm oil producer, was confronted with its reducing crude oil reserves and has decided to meet domestic oil consumption partly by biofuels. The government set the target that use of bio-diesel shall be equal to two percent of the national energy mix in the year 2010. Thailand announced plans to replace in the next five years, 20 percent of its domestic car petrol consumption by biofuels and natural gas. For supporting this ambitious target, a 10 percent tax break has been granted to car petrol blended with at least 10 percent bio ethanol which boosted its consumption 23-fold in 2004 from the year before, and 11-fold in 2005. The Philippines, the world’s largest coconut oil producer, also strongly promotes biofuels. The 2007 biofuel law requires that diesel has to be blended with at least one percent coconut oil and that five percent bio ethanol has to be added to other gasoline products by 2009. By 2011 this five percent bio ethanol share has to be increased to 10 percent. But the initial euphoria that surrounded biofuels has dissipated over the past few years. The sudden and dramatic growth in demand for biofuels is thought

Agriculture Production Cost Push
Price volatility in fuel has increased cost of irrigation. As natural gas is the main ingredient of fertiliser, there is a sharp rise in the fertiliser price as well. Globally the demand for fertiliser has also gone up dramatically and now, fertiliser is selling at a price three times higher than that in 2003. The high cost of seeds is another factor that contributes to farmers’ endless indebtedness. High-yielding rice varieties newly developed by private agricultural firms such as the Charoen Pokphand (CP) are being promoted to replace the farmers’ own low-yield varieties, with a promise of a productivity

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raise of 1,500 kilogram per rai. The average Thai rice productivity stood at only 481 kilograms per rai25 in 2007, the lowest figure among the worlds’ major rice producing countries.

government receives loan from both countries amounting to USD 600 million. The land lease deal is concluded as the UN World Food Programme started to ship USD 35 million worth of food aid to relieve the hunger experienced by Cambodia’s countryside.29

Table 4: Harvested Area, Production, and Productivity of World’s Major Rice Producing Countries
Country Harvested Area (1,000 Rai)
2005 China Indonesia Viet Nam Myanmar Thailand Philippines 181,978 73,994 45,808 43,800 63,906 25,440 2006 184,145 73,665 45,778 50,875 63,532 26,000 2007 182,688 76,035 45,656 51,250 66,681 26,563 2005 182,059 54,151 35,791 25,364 30,292 14,603

The problem of land grabbing may have yet to reach Thailand, however, if that happens, the livelihood of many Thai farmers will surely be threatened once land becomes properties of foreign capitalists.30 Even today, most Thai farmers are already vulnerable to the problem of the landlessness since many lack land entitlement and instead rent land from Thai capitalists to cultivate rice. With the prices of food and biofuel crops rising, many land owners are raising land rental fee. The change in leasing conditions means the cost of land rent has either doubled or tripled.

Total Production (1,000 tonnes)
2006 184,128 54,455 35,827 30,600 29,642 15,327 2007 185,490 57,049 35,567 32,610 32,099 11,080

Rice Productivity (kg./rai)
2005 1,000 732 781 579 474 539 2006 1,000 739 783 601 467 621 2007 1,015 750 779 636 481 611

Table 5: Agricultural Land Holding in Thailand, 2003
Holding size (rai)
Number

Total

Single Household

Two or more individuals of different households Number Area (Rai)

Corporations

Government Agency

Source: Thailand’s Agricultural Statistical Yearbook 2007
Total

Area (Rai)

Number

Area (Rai)

Number Area (Rai)

Number Area (Rai)

5,814,679 316,356

112,685,474 233,175

5,603,721 306,485

106,776,513 226,107

204,509 9,368

4,790,990 6,696

2,047 90

704,145 72

2,407 242

335,651 174

After subtracting all input costs and debt services, the farmers are left with little money of approximately THB 468.75 (US$ 14.20) per hectare at the end of the harvest. The report concludes, ‘It can be said that the situation of rice farmers today who produce rice for export in the area of Bang Kud Sub-district, Chainat Province, is simply one of production for debt repayment involving high input costs. After selling their rice, these farmers have to quickly use this money to pay back their debts and the interest, only to request another loan immediately in order to pay for the expenses involved in the next cycle of rice production.’26

Under 2 Rai 2-5 6-9 10-19 20-39 40-59

1,055,859 816,588 1,627,408 1,343,163 397,868 228,049 26,918 2,470

3,854,134 6,001,826 21,777,027 35,561,167 18,546,145 18,094,399 5,590,845 3,026,756

1,026,060 791,123 1,570,837 1,287,214 378,768 216,173 25,138 1,923

3,745,352 5,813,799 21,010,169 34,058,042 17,649,637 17,140,432 5,202,455 1,930,520

28,762 24,743 55,174 54,734 18,645 11,415 1,489 179

105,196 182,788 748,213 1,470,921 875,092 914,084 314,026 173,974

222 159 357 341 160 239 210 269

782 1,158 4,679 9,010 7,563 21,330 53,093 606,458

481 286 553 458 130 127 53 77

1,668 2,083 7,546 12,111 6,128 10,800 14,960 280,181

New Predator: Farmland Grab by the Corporate

60-139 140-499 500 rai and over

‘Land grabbing’ in poor countries by food import-dependent, richer economies has been raised as a concern by the head of the UN Food and Agriculture Organisation (FAO) Jacques Diouf, who warned that the rise of such land deals could create a form of ‘neo-colonialism’ in which poor states produce food for rich countries at the expense of their own hungry people. For example, the
27

Source: Thailand’s National Statistical Office According to the latest agricultural survey in 2003, a significant proportion of the large area of agricultural land (500 rai and over) in Thailand belonged to corporations, amounting to 606,458 rai of land compared to the total area of 3,026,756 rai under this category, or 20.03 percent, whereas most farmers hold between 21-39 rai of land – a medium size of land enough to feed the family. With the lack of land ownership, Thai farmers will continue to be vulnerable even when the global price of rice has shifted to their favour.

Saudi Binladin Group (SBG), for example, plans to invest in the eastern part of Indonesia (Sulawesi, Papua and Western Java) to grow Basmati rice on 500,000 hectares of land across the country with an investment of RP 39 trillion (US$ 3.3 billion).28 In 2008, Cambodia also announced the leasing of paddy fields to Qatar and Kuwait to allow both countries to produce their own rice. In return, the Cambodian

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Asean Economic Community

Since its establishment in August, 1967, the Association of South East Asian Nations (ASEAN) has made much progress, albeit slow, in regional integration among its members. At the Bali Summit in October 2003, all ASEAN members agreed to create the ASEAN Economic Community (AEC) and have a complete regional integration strengthened by two other pillars – ASEAN Security Community and ASEAN Socio-Cultural Community to be achieved by the year 2020. At the 12th ASEAN Summit in January 2007, all ASEAN members have agreed to accelerate the AEC establishment by 2015. To achieve such a vision, the ASEAN Charter was signed on November 20, 2007 to enable the organisation to function as a legal entity. By establishing the AEC, ASEAN aspires to become a single market and production base, envisaging the region to be more competitive against its competitors in other regions. One of the main goals of AEC is tariff reduction, whereby import duties on all products except those in the Sensitive and Highly Sensitive Lists will be eliminated by 2010 for ASEAN- 6 and by 2015 for CLMV (Cambodia, Laos, Myanmar, and Viet Nam). Flexibilities will be given to some of CLMV’s sensitive products and their tariff elimination can be postponed until 2018. Products under the sensitive list shall be phased into the CEPT

regional responses to the food crisis
To tackle the commodity price crisis, many governments have undertaken several immediate measures to soothe the severity of the problem targeting the poor, as mentioned in the earlier section. International organisations proposed several short- and long-term measures to counter the crisis such as more investment in agriculture, provision of infrastructure especially irrigation systems, and improvement in market connectivity so that farmers are wellinformed of market conditions which would reduce production and marketing costs. Other proposed measures include provision of rural finance and financial credits to the poor, enhancing research and development facilities, promotion of environmental sustainability in agriculture, and provision of greater access to information to the farmers. A regional and international cooperation such as regional commodity exchanges and clearing houses was proposed by the Asian Development Bank (ADB).31

(Common Effective Preferential Tariffs) scheme with tariffs reduced to 0-5 percent by January 2010 for ASEAN-6, and by January 2013 for Viet Nam, January 2015 for Lao PDR and Myanmar, and January 2017 for Cambodia. Other products under the General Exceptions List shall also be phased into the CEPT scheme.32 The trade of rice, most likely an item on many ASEAN countries’ Sensitive List, will eventually be deregulated and its import duties might be reduced. Apart from tariff reduction, the AEC also seeks cooperation in other trade-related issues including eliminating non-tariff barriers, enhancing trade facilitation among member countries, further liberalising trade in services, dealing with tax issues, promoting private sector participation in financing infrastructure projects, supporting SMEs, and improving e-commerce within ASEAN etc.

The Asean Food Reserves

Several initiatives on ASEAN-wide food security have been proposed over the 40 years of the organisation’s existence, and yet, there seems to be scepticism about achievement of concrete action. The ASEAN Food Security Reserve, signed by the initial 5 ASEAN members (Malaysia, Indonesia, the Philippines, Singapore, and Thailand) in New York on October 4, 1979, was aimed at establishing collective food self-reliance in the region by focusing on the following strategies: 1. 2. 3. Strengthening of the food production base of the ASEAN Member Countries Prevention of post-harvest losses of food grains Establishment of a food information and early warning system

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4.

Adoption of effective national stock holding policies and improved arrangements for meeting requirements of emergency food supplies

Despite the promising initiative, the scheme never really took off, partly due to the insignificant volume of reserves and its cumbersome procedures. The scheme was so inadequate that it could not address the food crisis in Indonesia in 1997 following the financial turmoil that hit many ASEAN members’ economies. This reinforces the criticism many have made of ASEAN, that ASEAN members are mainly interested in economic cooperation but completely overlook sociopolitical issues, such as matters related to people’s livelihoods. In the case of the ASEAN Emergency Rice Reserve Scheme, no progress had been made until other major Asian countries namely Japan, China and Korea, stepped in and ‘pumped life’ into the project by expanding it to the East Asia Emergency Rice Reserve (EAERR).35 The coverage of the scheme has also expanded to include rice supply for both emergency and normal scenarios, as well as the maintaining of physical stocks rather than just earmarked stocks. The pilot project of EAERR began in October 2003 and was expected to run up to March 2007; however, the ASEAN Ministers of Agriculture and Forestry (AMAF) meeting in November 2006 in Singapore had agreed to extend the initial project period, and to ultimately adopt it as a permanent mechanism. The EAERR is now part of the Strategic Plan of Action on ASEAN Cooperation in Food, Agriculture and Forestry 2004-2010, which was endorsed by the ASEAN Ministers of Agriculture in Yangon in 2004. Japan contributed US$ 380,000 to finance the EAERR Secretariat’s expenses in 2004 and 2005.36 Japan and Thailand were assigned to act as Coordinator of the scheme, although the chairpersonship of the ASEAN Food Security Reserve Board is rotated among all ASEAN member countries.

5. 6.

Promotion of stability of food prices Adoption of policies and programmes for improving consumption and nutrition, particularly of the vulnerable groups within each ASEAN member country

7.

Promotion of labour opportunities especially in rural areas and increasing the income particularly of the small farmers

8.

Other measures, including possible long-term trade arrangements33

As part of the ASEAN Food Security Reserve Agreement, the ASEAN members had agreed to establish the ASEAN Rice Reserve Scheme in 1979. The 5 signatory members were assigned to reserve an earmarked quantity of their rice stock, amounting to 50,000 tonnes in total. As ASEAN membership grew, the total earmarked reserve expanded accordingly to 87,000 tonnes. There is a provision for periodic review of the amount by the governments of the ASEAN members. In the case of emergency i.e. extreme and unexpected natural or man-induced calamity whereby member countries are unable to cope with the condition through their national reserve, or unable to purchase the required supply through normal trade, they may directly notify other members to request assistance to release rice from their national reserves for the former party’s usage. The prices and payment conditions, in whatever form, are to be negotiated between the member countries.

Despite the

scheme never really took off, partly due to the

promising initiative, the

insignificant volume of reserves and its

cumbersome procedures.

Table 6: ASEAN’s National Earmarked Rice Reserve
ASEAN-5 Country
Indonesia Malaysia The Philippines Singapore Thailand

The Asean Food Information System
ASEAN-10 Earmarked Reserve (tonnes)
12,000 6,000 12,000 5,000 15,000 3,000 14,000 3,000 14,000 3,000 87,00034

Cooperation with other non-ASEAN partners in the Asian region such as the ASEAN Food Security Information System (AFSIS), an ASEAN-Japan initiative, with participation open to both China and the Republic of Korea, has also been initiated. The objectives of the project are to facilitate food security planning, implementation, monitoring and evaluation in ASEAN through collection and management of information on food security within the region. The initial project period was 5 years, starting from January 2003 and ended in December 2007. Thailand’s Office of Agricultural Economics, Ministry of Agriculture and Cooperation, was the executing agency, with Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) as the donor through the ASEAN Trust Fund.

Earmarked Reserve (tonnes)
12,000 6,000 12,000 5,000 15,000

Country (ASEAN Accession Date)
Indonesia Malaysia The Philippines Singapore Thailand Brunei (8 Jan.1984) Viet Nam (28 July 1995) Lao PDR (23 July 1997) Myanmar (23 July 1997) Cambodia (30 April 1999)

The Organisation of Rice Exporting Countries (Orec)

The idea of establishing the Organisation of Rice Exporting Countries (OREC) was suggested by the then Prime Minister Samak Sundaravej of Thailand during the global price hike of rice in April 2008. The aim is to create a monopolistic group of rice producing/exporting countries which controls the world market

Total

50,000

Total

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prices of rice, just like what is being practised in the oil industry by the Organisation of Petroleum Exporting Countries – OPEC. The concept of the OREC establishment was agreed to by 5 South East Asian rice producing countries namely Cambodia, Lao PDR, Myanmar, Thailand, and Viet Nam, although there is a plan to invite other rice exporting countries including India, the United States, and China to join the group, making the total number of members 21. Cambodia Prime Minister Hun Sen said that the aim of OREC was not to stockpile food for price speculation, but rather to ensure food security in the Asian region and the entire world. The organisation would establish a common price of rice across countries to create price stability, which would in turn work as an incentive for farmers to continue producing rice. Hun Sen said, ‘When there are shortages, we will not stockpile the rice or increase prices. We really want to help ensure food security.’ 37 Prime Minister Hun Sen believed that a rice cartel would provide an incentive for farmers to produce, and stimulate the entire rice production in Cambodia and the entire region. Chan Sarun, Cambdia’s Minister of Agriculture, added that setting fair prices for rice would encourage farmers to go back to their paddy fields and increase productivity, while keeping in perspective the idea of exporting their harvest. With OREC, all rice-producing countries would be able to share and improve their farming techniques and reach high productivity. Thailand’s position was that if the world wished to alleviate poverty in developing countries, the plight of small farmers in the developing world including Thailand must also be taken into account. Small farmers have been affected by the international price pressure of rice, while the price of inputs of rice production and their costs of living continue to rise.

approaches and recommendations
Regional Integration should Address Food Security Agenda for the Poor
It is argued officially that establishment of the AEC will lead to economic prosperity and poverty reduction in ASEAN, making food acquisition no longer a problem for ASEAN citizens. However, economic growth does not always lead to equal distribution of wealth across social groups. This means that while some groups of the population will benefit while others may remain at the bottom of the socio-economic hierarchy. Food shortage will continue to be a problem faced by those marginalised by the economic liberalisation process. Hence, economic growth may trickle down to alleviate poverty, but rising income inequality as well as limited access of the poor to infrastructure, improved technology, and human capital formation may limit the chance of ASEAN countries achieving sustainable food security in the region. In addition, rising inequality may even slow down economic growth. People’s right to food is determined by their economic entitlement; therefore, to ensure their access to food and prevent them from starvation, economic disparity among social groups both within one country and across the ASEAN region needs o be addressed.

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An important cause of the food crisis is political instability. Paul Clarke analysed the effects of war in Afghanistan on the country’s food security, food production and the transport and marketing of food, as well as the ability of people to afford buying food in the market, and found that political conflicts have destroyed all of these elements of food security.38 This demonstrates the need to create a peaceful region where social and economic activities including food production can run their courses without political disruption. The establishment of the ASEAN Security Community (ASC) by 2020, following the ASEAN Vision 2020 Plan, can be successful in the region if adequate food security is maintained in ASEAN. Activities to achieve the ASC goals have been planned, including promoting democratic institutions, strengthening the rules of law and judiciary systems, enhancing good governance in public and private sectors, combating corruption, and strengthening effective civil services. Another activity is to promote human rights and obligations by establishing a network of human rights mechanisms.
39

mitments on market opening. By creating a common rice pool in the ASEAN region, Japan could keep rice from other countries from flooding its domestic market. On this Dano41 commented that both the previous and current EAERR schemes emphasised bilateral trade. In reality when countries face a food crisis, it is unlikely that they have adequate financial resources to compensate for the rice they request from other countries. Moreover, the rice reserve can only be tapped into in the case of emergency, but often the nations that experience political turmoil would not openly admit to their neighbours that they are facing political problems, for fear of exhibiting weaknesses to the world and further destabilising the political situations in their countries. Food-deficit countries such as Indonesia and the Philippines opted for rice imports and sought foreign loans rather than seeking help from the scheme. The bilateral nature of a supposedly multilateral scheme becomes a burden that prevents it from taking off the round, as it puts the country in need at the mercy of the more powerful, rice-surplus neighbours. The new EAERR attempts to correct that by creating a coordinating body – the Management Team (MT) – which takes stock of the rice reserves in each country and becomes a point of

be a ‘rice trade’ initiative rather than a humanitarian aid programme

The EAERR scheme de facto continues to

Implementation of these plans has begun, but assessment of its ef-

fectiveness requires further investigation.

Reorient Asean Food Reserves from ‘Trade-Focused’ to ‘Humanitarian-Oriented’
Establishing a regional rice reserve can be a crucial instrument that ensures food security within the region. Without such a regional initiative and in a state of emergency, countries will act on self-interest by taking actions to secure their food position (such as an export ban or the hoarding of food supplies) at the expense of others. This could also destabilise regional security. However, the focus of EAERR should be shifted towards the humanitarian side, or it risks becoming just another rice trade scheme. The lack of a unified definition on food security among ASEAN members makes it difficult for the region to truly achieve food security the way it is understood through universal human rights approach to food. Emphasis seems to be placed on the inter-regional rice trade. Hence, it may be justified to assume that food security in the EAERR scheme ‘is not about developing the capacity of local rice farmers to make decisions concerning production nor about increasing the capacity of each member-country to produce its own food’.40 The scheme reportedly received enthusiasm from mainly two countries: Thailand and Japan. As the world’s top rice exporter, Thailand considered EAERR as a great opportunity for its future rice exports, since it is another channel for the country to sell off their rice stocks to countries that face food emergency. Japan, on the other hand, aimed to utilise the scheme as a mechanism to protect its domestic rice farmers while at the same time complying with its WTO com-

contact for countries in need when facing an emergency situation. This is an improvement of the system compared to the earlier version. The scheme, however, seems to continue to focus on inter-regional rice trade and towards developing the international competitiveness of ASEAN member countries through technology transfer, regional cooperation, and private sector participation, over the objective of food security. The EAERR scheme de facto continues to be a ‘rice trade’ initiative rather than a humanitarian aid programme, since repayment for the received rice must still be made by the recipient country. Details on conditions and time of repayment, together with the price of rice and transport costs including international shipment and domestic transport plus operation costs must be included in the request letter submitted to the EAERR committee by a recipient member country. This seems that countries that face natural calamities and encounter the food crisis can ‘purchase’ the required rice amount from the EAERR, perhaps at a discounted rate, but the deal continues to be a rice procurement deal rather than a food aid programme.

The Asean Food Information System

While the first phase of the project focused on data collection, statistical system development, AFSIS website creation and human resource development, the second phase will add the food production monitoring feature to the system, namely the Early Warning Information System (EWIS), which is crucial for the maintaining of food security in the region. The system also produces a report

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the production of major food crops during each cultivation season. The report entails forecasts of harvested areas, production and yields, crop conditions, and damages caused by natural calamities, pests and diseases outbreaks. In addition, the second phase of AFSIS will also produce the Commodity Outlook Report which compiles and analyses data on the production, demand, and supply of major commodities from various sources such as AFSIS own system, together with information from the Food and Agriculture Organisation (FAO), the World Bank, and the Asian Development Bank (ADB). Such establishment
42

Recommendations

This situation has unfurled unique challenges in front of SEA. It has made SEA leaders stand in front of the question of their lifetime. SEA leaders must act now to address the challenges of price volatility and longterm threats to food production. This paper shows: 1. SEA countries have become extensively dependent on imported food. And once there is a crisis in the external world, they have failed to control or stabilise local markets. The countries also failed to predict the depth of the problem and they did not build up enough strategic reserves to tackle the situation.

of an information network is crucial for the forecasting of future food production and the ensuring of adequate food supplies in the region.

Food Sovereignity, Not Rice Cartel

2.

Food prices on the international market are heavily influenced by finance capital, biofuel demand and oil prices. All of these had effectively decreased the net availability of cereal for human consumption and have pushed up the price.

It is true that rice farmers in developing countries are largely underpaid for their work and are subsidising the world with their cheap food production. However, creating a rice cartel will not necessarily benefit the farmers, as most of the benefits will likely go to rice traders who are able to control the market prices of rice. Not only will farmers receive little, if any, benefits from the rice cartel, but the poor across the world who rely on rice as their daily staple food will also be adversely affected by the rising price of rice as a result of the cartel. Instead of enhancing food security in the region, the creation of OREC would most likely worsen the situation and lead to greater commodity speculation, higher prices of food, and perhaps another food crisis. 4. 3.

Those most affected by the food price rise are the poor earning less than a dollar or two a day, who spend nearly all of their earnings on food. Initial research suggests that women were particularly badly hit. Long neglected agriculture has received due attention at last. Investment in agriculture – especially public investment are essential to make agriculture viable, keep farmers of poverty, and to ensure that small holding agriculture does not disappear.

are largely underpaid for their work and are subsidising the world with their cheap food production

Rice farmers in developing countries

Support for OREC was met with disagreement by many rice importing countries such as the Philippines and Indonesia, which contend that the five rice producing countries took advantage of the situation when the world was facing both fuel and food crisis. The Philippines denounced the plan, as the country imports 10 percent of its rice consumption from abroad and has faced difficulties in sourcing rice on the world markets. The country warned that a rice cartel would lead to more poverty for the poor and could lead to an uprising, as the World Food Programme puts it, ‘Hungry men are angry men.’43 The President of the Asian Development Bank (ADB) Haruhiko Kuroda also disagreed with the plan, saying “It is not correct to let the producer rather than the markets determine the price of rice which is a basic daily need,” and warned that rising rice prices will cause serious problems in Asia, which includes one-third of the poorest nations on earth. He also added that the rice production should be subsidized, not limited.44

5.

Regional cooperation in combating the problem is missing although there are ample opportunities for coordinated and collaborative policies in the areas of import, export, subsidy among other measures.

6.

An effective forecasting system at the regional level would have eased the burden on the governments if the price rise was predicted properly.

A Call for Action

Tackling the food crisis requires a concerted effort from various agencies at the national, regional, and international levels. Within ASEAN, many plans have been initiated to address the problem. We call upon the governments to: 1. Re-orient the ASEAN Food Reserves from Trade-Focused to Humanitarian-Oriented. The current East Asia Emergency Rice Reserve (EAERR) is more trade-oriented rather than a scheme to achieve a humanitarian objective since repayment for the received rice must still be made by the recipient country. The scheme becomes an emergency rice purchasing programme rather than being a rice pool/food aid programme for the region. For poorer countries that face such disasters, repayment for such food as-

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sistance seems difficult. In addition, in time of the food price hike, it is questionable whether EAERR member countries will be willing to supply the scheme with their rice stock and sell the rice to poorer countries at discounted price, when they can sell their rice on the international market at a high marked-up price, because the stockpiling of rice under the EAERR scheme is done only on a voluntary basis. A re-orientation of the EAERR to make the programme become more humanitarian rather than trade-oriented is therefore deemed highly desirable. 6. 2. Promote Sustainable Agriculture and Organic Farming. Apart from its economic benefits, organic agriculture supports the fight against global climate change by reducing the carbon footprint. It also contributes to reduced consumption of fossil fuel energy, especially nitrogen fertilizers, as well as reduced carbon dioxide emissions, nitrous dioxide, and soil erosion while increasing carbon stocks. Many Asian governments have endorsed and promoted organic agriculture in their countries, although the growth of organic farming has been a result of the pull factor which is the booming trade of organic products in the West. Most production of organic crop in Asia is then geared towards exports. A more sustainable solution is to promote consumption of organic products within one’s country, to reduce the problem of food miles i.e. food travelling a long distance to be supplied to faraway markets, causing CO2 emission and damages the environment. 3. Impose Moratorium on Biofuels. In the face of the global food price crisis, biofuel is being attributed as a major cause of the rising food prices, as land previously dedicated to food production is being shifted to the production of biofuel crops. Commodities such as corn and sugarcane previously produced for human consumption are now being sold as biofuel raw materials. Production of biofuel competes with food production in terms of land, agriculture inputs, and the use of outputs. Therefore a moratorium on biofuel production should be imposed for maintaining food sufficiency for the people. 4. Tackle the Problems of Land Ownership and Land Grabbing. One of the causes of poverty in developing countries’ farming population is the lack of land. Most poor farmers either cultivate crops in small plots of land, or rent the land from nearby landowners. To tackle rural poverty, a land reform policy is needed so as to grant landless peasants the right to feed themselves and earn sufficient income for their families. ASEAN countries are also experiencing corporate land grabbing. ASEAN must clearly define its stance on the issue and collectively tackle the problem so that food security can be sustained in the region. 5. Encourage Urban Agriculture and More Productive Use of Land. The rapid growth of cities encroaches on land traditionally dedicated to food production. Rural food production is predicted to decline substantially by

2010 as a result of urban area expansion. Urban agriculture thus becomes an important tool for countries to feed their rising urban population. Despite its benefits and the growing number of projects being implemented in various countries, urban agriculture continues to receive considerably little attention from the government. With future food crises foreseeable, and the persistence of land ownership faced by farmers, urban land should be put into use to supply food for the population. Uphold Equitable Income Distribution to the Poor as part of the Regional Economic Integration. The creation of the ASEAN Economic Community (AEC) that aims to create a single market in the region by liberalising the movements of goods, services, investment, and skilled labour among ASEAN member countries should be accompanied by strong social integration of all socio-economic classes of ASEAN citizens. This is so that prosperity generated by economic integration is shared equitably to the socially and economically marginalised groups of the population. There is no mentioning of small farmers and unskilled labour in the current AEC text. Instead, protection of larger stakeholders such as investors through the plan to establish investor-state dispute settlement mechanism is being promoted in the AEC blueprint. This means that small groups of stakeholders such as farmers continue to be left out of the regional integration process. Thus, to make regional integration initiative meaningful not only to the governments and large players in the private sector, but to disadvantaged people in the ASEAN community, the AEC must address the interests of these people as part of their integration activities.

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End Notes:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Rice Today, January-March 2009, International Rice Research Institute (IRRI). Thomas Fuller (2008) ‘Asian Food Crisis Has Political and Civil Implications’ International Herald Tribune, April 18 http://www.iht.com/articles/2008/04/18/asia/food.php John Cloud (2007) ‘The Rising Costs of Food’ Time, June21. http://www.time.com/time/magazine/article/0,9171,1635836,00.html Rice Today, January-March 2009, International Rice Research Institute (IRRI). Rice Today, ibid The lack of a good irrigation system, as well as climatic conditions in the North East allows farmers in this region to produce rice only once a year. Biothai, (2008) ‘Agricultural Policies and the Survival of the Agricultural System and Small Farmers’ (in Thai), p.23. Areewan Kusanthia, The Real Life of Thai Rice Farmers Who Produce to Feed the World, Local Action Links. Based on the exchange rate of USD 1 = THB 33. Areewan Kusanthia. ibid Sajin Prachasan (2008) Progress Report: Recommendations on ‘Agriculture and Food in the Crisis Era’ Submitted to the National Health Assembly 2008, Sustainable Agriculture Foundation, October. http://www.sathai.org/images/Hotissue/041-pic/041-Report.pdf ‘Impacts of Price Hikes on the Lives and Livelihoods of Poor People in Viet Nam: Case Studies in Provinces of Dien Bien, Dak Lak and Quang Tri, Hai Phong City, and Go Vap District (HO Chi Minh City)’, Oxfam and ActionAid Viet Nam, November, 2008 United Nations (2008) ‘Food Prices, Vulnerability, and Food Security in Viet Nam: a UN Perspective’, p.8. Oxfam and ActionAid (2008), ibid, p. 22-23. Oxfam and ActionAid (2008), ibid., p.70. United Nations (2008) ‘The UN System Response to the World Food Security Crisis’ September. http://www.un.org/issues/food/taskforce/FACT_SHEET.pdf accessed on November 17, 2008. Kate Smith and Rob Edwards (2008) ‘2008: The Year of Global Food Crisis’ Sunday Herald, November30. http://www.sundayherald.com/news/heraldnews/display. var.2104849.0.2008_the_year_of_global_food_crisis.php David Adam (2008) ‘Food Price Rises Threaten Global Security – UN’ The Guardian, April 9. http://www.guardian.co.uk/environment/2008/apr/09/food.unitednations ‘Food-Riot Watch: Egypt Protests Spook Government’ Foreign Policy, July 4. http://blog.foreignpolicy.com/node/8588 Oxfam (2008) ‘Double-Edged Prices: Lessons from the Food Price Crisis: 10 Actions Developing Countries Should Take’ Oxfam Briefing Paper No. 121, October. http://www.oxfam.org.uk/generationwhy/cgi/process_comp/ photos/2008/10/bp121_double-edged-prices_-final_-13oct08.pdf Economist; IMF; 2008 UNCTAD (2008) ‘Tackling the GlobFood Crisis’ UNCTAD Policy Briefs, No. 2, June. www.unctad.org/en/docs/presspb20081_en.pdf UNCTAD (2008) ibid. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 24. 25. 26. 27. 28. UNCTAD (2008) ‘Making Certification Work for Sustainable Development: The Case of Biofuels’ (New York, Geneva: United Nations Conference on Trade and Development). Thai measurement of land area. 1 rai equals 0.16 hectares. Julian Borger (2008) ‘Rich Countries Launch Great Land Grab to Safeguard Food Supply’ The Guardian, November 22. http://www. guardian.co.uk/environment/2008/nov/22/food-biofuels-land-grab ‘Saudia Binladin Group Farm Investment in Indonesia Soon’ The Saudi Gazette, November 20. http://zawya.com/story.cfm/sidZAWYA20081120043342/ Saudi%Binladin%20Group%20farm20investment%20in%20 Indonesia%20soon%20 (‘Seized! The 2008 Land Grab for Food and Financial Security’ Grain Briefing, October. http://www.grain.org/briefings_files/landgrab-2008-en.pdf ‘Ministry of Agriculture Aimed to Propose Law Preventing Foreigners Buying up Farmers’ Land’ Prachatas, November 24. (Thai). http://www.afet.or.th/v081/thai/news/commodityShow.php?id=1390 Asian Development Bank (2008) Soarin Food Prices: Response to the Crisis, p. 13-14. http://www.adb.org/Documents/Papers/soaring-food-prices/soaringfood-prices.pdf ASEAN Economic Community Blueprint, http://www.aseansec.org/21083.pdf ‘Agreement on the ASEAN Food Security Reserve’, New York, October 4, 1979. http://www.aseansec.org/6170.htm ‘Towards a World Free of Starvation and Poverty: Introductory Information on the International Food Stockholding Scheme and East Asia Emergency Rice Reserve (EAERR)’ Ministry of Agriculture, Forestry and Fisheries of Japan. http://www.maff.go.jp/e/policy/pdf/eaerr.pdf Elenita Dano (2006) ‘ASEAN’s Emergency Rice Reserve Schemes: Current Development and Prospects for Engagement’ Women in Action, No.3. http://www.isiswomen.org Elenita Dano and Elpidio Peria (2006) Emergency or Expediency?: a Study of Emergency Rice Reserve Schemes in Asia, a joint publication of Asiadhrra and AFA. ‘Hun Sen: OREC can Solve World Hunger’ Bangkok Post, May 5. Paul Clarke (2000) ‘Food Security and War in Afghanistan’ Development, 43 (3) September, p.113-119. ‘Annex for ASEAN Security Community Plan of Action’ ASEAN Secretariat http://www.aseansec.org/16829.htm Dano and Peria, ibid p.8. Elenita Dano (2006) ‘ASEAN’s Emergency Rice Reserve Schemes’, p. 38. Montol Jeamchareon, ‘Draft Proposal for the 2nd Phase of the ASEAN Food Security Information (AFSIS) Project’ http://afsis.oae.go.th WFP. ‘Yes He Can Tackle Hunger!’ World Food Programme News, January 19. http://beta.wfp.org/stories/yes-he-can-tackle-hunger Suna Lee (2008)‘Solutions to the Rice Crisis in Asia: OREC’ ASAM, May 6. http://www.asam.org.tr/tr/yazigoster.asp?ID=2404&kat1=8&kat2=

Acknowledgements
This report is based on commissioned research titled, ‘Tackling Food Crisis in South East Asia’ prepared by Vilailuk Tiranutti and Jérôme René Hassler. The country case studies are prepared by Le Kim Sa, Vu Thi Quynh Hoa and Truong Quoc Can for Vietnam, Arze Glipo for the Philippines and Didin Damanhuri for Indonesia. The report has benefited from the comments of Anne Jellema, John Samuel, Ramesh Khadka, Tim Rice, Jan Boontinand, Phan Van Ngoc, Saroj Dash, Keshav Gautam, and Rangsima Deesawade. This version of the report is prepared by Rashed Al Mahmud Titumir and AFM Shahidur Rahman.

29. 30. 31.

Prepared for the ASEAN SUMMIT 2009 February 2009

32. 33. 34.

12.

13. 14. 15. 16.

17.

18. 19. 20.

21. 22. 23.

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