"Gotong Royong" is a concept familiar to many parts of Indonesia and Malaysia. Translated into English, it evokes the concepts of "reciprocity" and "mutual aid".

We use the term "Gotong Royong" to refer to the idea of doing things together and helping each other in the spirit of goodwill.

Welcome to ANGOC Gotong Royong, the e-newsletter of the Asian NGO Coalition for Agrarian Reform and Rural Development (ANGOC).

We welcome your feedback on any of the articles that appear here. We also invite you to send updates on your programs and on the socio-political situation in your country, as well as developments in agrarian reform, sustainable agriculture, and participatory governance, among others.

World Agriculture in peril

"World agriculture has entered a new, unsustainable and politically risky period," says Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI) in Washington, DC. To prove it, food riots have erupted in countries all along the equator. In Haiti, protesters chanting "We're hungry" forced the prime minister to resign; 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. "It's an explosive situation and threatens political stability," worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.

Last year wheat prices rose 77% and rice 16% (see chart below--from The Economist). These were some of the sharpest rises in food prices ever. But this year the speed of change has accelerated. Since January, rice prices have soared 141%; the price of one variety of wheat shot up 25% in a day. Some 40km outside Abidjan, Mariam Kone, who grows sweet potatoes, okra and maize but feeds her family on imported rice, laments: "Rice is very expensive, but we don't know why."

The prices mainly reflect changes in demand-not problems of supply, such as harvest failure. The changes include the gentle upward pressure from people in China and India eating more grain and meat as they grow rich and the sudden, voracious appetites of western biofuels programs, which convert cereals into fuel. This year the share of the maize (corn) crop going into ethanol in America has risen and the European Union is implementing its own biofuels targets. To make matters worse, more febrile behavior seems to be influencing markets: export quotas by large grain producers, rumors of panic-buying by grain importers, money from hedge funds looking for new markets.

But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidized in rich countries and international food markets were wildly distorted. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected.

"We are the canary in the mine," says Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid. Usually, a food crisis is clear and localized. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. "For the middle classes," says Ms Sheeran, "it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster." The poorest are selling their animals, tools, the tin roof over their heads-making recovery, when it comes, much harder.

Because the problem is not yet reflected in national statistics, its scale is hard to judge. The effect on the poor will depend on whether they are net buyers of food or net sellers; for some net buyers, the price rises may be enough to turn them into sellers. But by almost any measure, the human suffering is likely to be vast. In El Salvador the poor are eating only half as much food as they were a year ago. Afghans are now spending half their income on food, up from a tenth in 2006.

On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.

Source: "The new face of hunger," The Economist print edition,  17 April 2008.

RP food crisis prompts calls for agri policy reform

In the Philippines, the crisis in agriculture, which has been creeping up on agricultural producers through the years, suddenly unveiled itself in mid-April when the price of rice jumped from P33.75 to P38.33 per kilogram. Long queues formed at buying stations of the National Food Authority (NFA)-the government agency whose function is to stabilize rice prices by paying a fixed farmgate price for palay and selling rice at controlled prices, i.e., lower than the prevailing market price-but the NFA's stocks could not accommodate the demand. No wonder: the NFA's palay procurement capacity has plummetted in the last five decades-from buying up 10% of the domestic supply of palay in the 1970s, the NFA now takes less than 1%, and its buffer stock is good for just 30 days.

Other trends have been noted. Domestic rice production cannot meet domestic demand. As a result, imports of rice rice have been increasing, and, from 2000-2006, has been averaging at 1.1 million metric tons per year. Nevertheless, stock levels have remained low, at less than 20%, in the last three years.

Because of the current rice shortage in the country, rice exporters like Thailand and Vietnam have raised their price by as much as 60%. From US$700/ton, Thai rice exports are now priced at US$1,100/ton. Vietnam is selling at a slightly higher US$1,190-1,220/ton.  The Philippines needs to import some 500,000 metric tons of rice to cover the current shortfall, but given the tight supply and the skyrocketing prices, it can probably buy only 333,000 metric tons.     

A Multisectoral Conference on the Rice Crisis convened on 18 April put the blame on the dwindling domestic support for rice. It offered as proof the following facts:

• The Land Bank has allocated only 25% of its portfolio to agriculture.
• Only 43% of irrigable area are irrigated.
• Incentives like credit  go to export-oriented agribusiness.
• Ricelands are being converted to non-agricultural uses.
• Biofuel production for export is driving the conversion to biofuel crops. Biofuel investments are rising. The Philippine National Oil Corporation (PNOC) is targetting some 1.2 million hectares for conversion to jatropha/ other fuel crop plantation, with P5 billion financing from the Land Bank. Bionor Transformacion S.A., a subsidiary of the publicly-listed CIE Automotive of Spain, is putting up US$200million for a 100,000 hectare jatropha plantation in Pila, Laguna and Palawan. Coromato Communication is plumping $100M for a jatropha plantation in Bukidnon.

The Multisectoral Conference accused the Arroyo Government of fanning, rather than solving the current crisis, with its p-g-headed adherence to policy measures that caused the present crisis, such as import liberalization, removal of quantitative restrictions (QRs) on rice imports, and reduced subsidies for the rice sector.

The Multisectoral Conference called for the immediate implementation of both short term and long-term solutions to the rice crisis:

Short-term measures:

1.     Institute  price controls on rice and other basic commodities to avert further spikes in food prices due to continued global food uncertainty and the oil price hike.

2.     Provide comprehensive support and subsidies to small rice farmers, including input subsidies, palay support price, rehabilitation of irrigation systems, to fully modernize our food production and uplift the lives of small producers in the country.

3.     Increase wages of workers to recover the depreciation of their current wages due to inflation.

4.     Maintain quantitative restrictions (QRs) on rice imports and prohibit rice importation by private rice traders.

5.      Stop the conversion of prime agricultural lands and implement genuine agrarian reform.

6.     Promote alternative rice production methods, including organic farming.

7.     Increase government procurement of local rice production to a minimum of 30% of over-all production.

8.      Stop payment of onerous debts to free up needed money to finance agricultural modernization.

9.     Stop free trade and investment agreements, including the Japan-Philippines Economic Partnership Agreement and the RP-China Agriculture Agreements.

10.  Impose a moratorium on the Biofuels Act.

11.  Dismantle the rice cartel.

Medium and long-term solutions:

1.     Overhaul the trade and economic policy. Reverse trade liberalization and ensure the primacy of domestic food production over the needs of the international market.

2.     Embark on a sustainable agro-industrial development.

3.     Strengthen state intervention in rice trade, marketing and distribution through strong complementation between a reformed NFA and networks of people's cooperatives.

4.     Increase investment in research and development.

5.     Democratize the value chain by strengthening marketing associations and cooperatives.

6.     Rationalize a land use plan that prioritizes the production of rice in irrigable areas.

7.     Diversify incomes through a sustainable agriculture framework.

8.     Pursue a genuine agrarian reform program.

9.     Cancel all debts incurred that institutionalized neo-liberal economic policies as well as debts mired in corruption and questionable deals.

    Sources:

People's Declaration on the Rice Crisis, Statement by the Multisectoral Conference on the Rice Crisis, 18 April 2008, Philippines.

Cambodian farmers selling land in droves

Rice production will be reduced in Cambodia if rice fields continue to be sold to be converted to business, factory or residential sites.

Kit Seng, director of the planning department of the Ministry of Agriculture, Forestry and Fisheries (MAFF), said, "We are worried that, in the future, only non-fertile land will remain for cultivation because most of the rice fields will have been sold off."

Uon Sophal, a farmer in Cambodia's Kampot province, said that if current land transaction trends continue, most farmland will end up in the hands of the rich. "Then farmers will find it more difficult to afford food," he said. "I would like to appeal to farmers not to sell their land because this will cause a shortage of farmland and it will drive rice prices up, which will be a burden on the country."

Farms in Cambodia are currently run overwhelmingly by impoverished farmers, and because of their poverty, they are often tempted to sell their land for ready cash, said Chey Siyat, a member of an agricultural NGO.

Feel free to send in your comments.

Email us at: angoc@angoc.ngo.ph. Indicate in the subject line: Attention: Teresa Debuque (Editor)

Or you may write us at:

Asian NGO Coalition for Agrarian Reform and Rural Development (ANGOC)
6A Malumanay St. U.P. Village, Diliman, Quezon City, Philippines
Tel. (+63-2)4337653-54/ Fax: (+63-2)9217498/ Email: angoc@angoc.ngo.ph

Till next issue.

Sincerely,

Nathaniel Don E. Marquez, ANGOC Executive Director