Feeding Indonesia

Debates rage about the best way to feed Indonesia's growing

population- Gunawan
In 2007/08 the world witnessed a global food crisis as the cost of food staples like
rice and soybeans spiked suddenly. In Indonesia, riots broke out in January 2008
over the rise of soybean prices (soybeans are the basic ingredients for the
Indonesian staple foods tempe and tofu). Then in March of the same year people
took to the streets to protest against increasing rice prices. Concerned these
protests might escalate, the government decided to increase subsidies for food by
US$280 million. Global food prices have since stabilised, but this shock put food
security at the top of the policy agenda for the entire Southeast Asian region.
In Indonesia when policymakers and commentators talk about food security, they
mean ensuring all people have access to sufficient, healthy and affordable food.
This ambitious goal has implications for all parts of society ranging from the
economy, to agriculture and the environment. Because food security has such a
wide scope, it is also a very controversial issue in Indonesia, pitting those with
opposing ideological positions against each other. Since Indonesias independence
politicians, scientists, economists and activists have debated how best to feed
Indonesias masses. At one end of the spectrum are those who argue open markets
and free trade are the answer to ensuring affordable, accessible food for all.
Others, however, believe agrarian reform, especially distribution of land to poor
farmers, and support for local agricultural markets are keys for achieving true
food security. This edition of Inside Indonesia explores the range of perspectives
that characterise contemporary debate on food security in Indonesia.

Food security, food self-sufficiency and food sovereignty

John McCarthy and Zahari Zen open the edition with a discussion of the
difference between food security and food self-sufficiency. While Indonesias
economy continues to grow, the authors show how growth is uneven and food
security looms as a threat for many poor Indonesians. The governments current
focus on self-sufficiency is at the expense of the security of individual households,
and McCarthy and Zen argue for a more activist approach to food insecurity by
focusing on the development of agrarian policy. The most vulnerable Indonesians
are poor farmers, so food security policies should focus on supporting their
livelihoods to bring farming communities out of poverty.

A key question for scholars of food security is what role the state should play in
the management and distribution of food. Jeff Neilson shows that this question is
one that has a long history in Indonesia. Neilson discusses the evolution of
Indonesian food security policy, revealing how contemporary policies have their
roots in the early vision of Sukarno in the 1960s who framed food security as an
issue that threatened the entire nation. Like McCarthy, Nielson argues that in
reality food insecurity is felt by individual households and that the Indonesian
government needs to develop policies that enable households to look after
themselves.
One grassroots initiative that is attempting to empower households to produce
their own food is the Permablitz movement. Astrid Reza, a founding member of
Permablitz Jogja, believes that food security is an issue that needs to be tackled by
educating communities about food production and distribution. By working
communally to build gardens in Yogyakarta, Permablitz Jogja provides residents
of urban neighbourhoods the skills to produce their own food. In the process, the
organisation generates awareness about what it sees as the Indonesian
governments over-reliance on imported and genetically modified foods.
Rahmat Ajiguna, the head of AGRA, a farmers organisation, makes similar
criticisms of the Indonesian governments policies. For organisations like AGRA,
Indonesias food security cannot be separated from the security of poor farmers
and the products they sell. Food sovereignty, for Ajiguna, is the path to true food
security in Indonesia. This means investing in agrarian reform, supporting local
markets and using Indonesian farmers to feed the country, rather than importing
products that compete with local produce.
But other analysts believe that protectionist policies like those advocated by
AGRA will further exacerbate Indonesias food security problems. Kevin
ORourke, a policy analyst, argues that Indonesia should be encouraging
investment in its agricultural sector so that it can export agricultural products and
therefore afford to import staples such as tofu and rice. His view is that the
Indonesian government has been overprotective and that more market-oriented
policies will make food more affordable.

Putting food policies into practice

Regardless of the governments ideological position, it is undeniable that the
process of implementing policies that will allow all Indonesians to be food secure
is a challenge in such a geographically diverse and disparate country. Michael
Rimmer focuses on the challenges the Indonesian government faces in

safeguarding its aquaculture industry. Fish consumption in Indonesia is almost

double the global average, but, as Rimmer demonstrates, the industry is under
threat from over-fishing and environmental damage. Rimmers article highlights
the difficulties the Indonesian government faces in addressing these problems and
regulating an industry that stretches across the archipelago.
The final article in this edition examines the heated topic of the sale and import of
beef.Risty Permani asks why the government has not been able to control beef
prices in a country where consumers are demanding more. She argues that the
governments protectionist approach to beef trade is to blame, an approach guided
by political interests, rather than expert knowledge. Permani suggests that in the
interests of the many Indonesians who currently cannot afford to eat beef, the
Indonesian government should heed the knowledge of its trade and development
experts and leave political issues at the door.
This edition presents a diverse range of views about best how to achieve food
security, reflecting the technically complex and politically sensitive nature of the
problem. But the contributors all agree that the Indonesian government needs to
develop a more effective strategy for managing and distributing food. Doing so is
essential for the health, productivity and wellbeing of Indonesias people.
Inside Indonesia 114: Oct-Dec 2013

2015: The Year in Cotton Demand

Posted By: Jim Steadman | December 14, 2015
From the Cotton Grower 2015 Annual

BY DR. JODY CAMPICHE

Based on the October 2015 USDA National Agricultural Statistics Service
estimate, U.S. producers planted about 8.5 million acres of cotton in the 2015
marketing year about 23% less than last year.
Acreage is down in all regions, with some areas, such as south Texas, being
particularly low due to excessive rains.
In addition to excessively wet weather deterring some acres, lower cotton prices,
relative to prices of competing crops, resulted in lower cotton acreage in the MidSouth and Southeast.
As the 2015 U.S. cotton harvest progressed, USDA estimated a 2015 U.S. crop of
13.3 million bales, 18% less, or 3 million fewer bales, than in 2014. Upland
production was seen reaching 12.9 million bales, with Pima production forecast at
451,000 bales.
World production for 2015 is projected to be 107 million bales, which is more
than 10 million bales less than last year. China is responsible for the largest
decrease in production 4.7 million bales less than last year. The Pakistan crop is
expected to be about 1 million bales less in 2015. Production in both India and
Brazil is expected to decline by 500,000 bales in 2015, while Turkey is projected
to lower production by 400,000 bales.
For the first time in six years, world consumption is expected to exceed
production in 2015. USDA projected an increase in world mill use of about 2%.
U.S. textile mills are expected to consume 3.7 million bales 100,000 bales more
than 2014 which marks the fourth consecutive year of increased consumption as
a result of new investment and growth in textile mills in the United States.
The United States will remain the largest exporter of cotton, with 2015 shipments
estimated at 10.2 million bales.
Though China remains the largest cotton importer, it was projected to significantly
lower imports in 2015.

Chinas fiber policies have been one of the largest factors influencing cotton
markets over the past five years. For the 2011-13 crops, China supported its cotton
farmers by purchasing large amounts of Chinas production into government
reserves at a price well above the world market, essentially establishing a floor on
internal cotton prices.
By late 2011, Chinas cotton prices were well above international cotton prices
and polyester prices. As a result, Chinese mills turned to lower priced polyester
and other manmade fibers.
China continues to hold approximately 50 million cotton bales in government
reserves. Efforts to reduce the reserve have not been successful, and large ending
stocks still hang over the market.
The decline in Chinese imports is expected to be partially offset by increased
imports from Bangladesh and Vietnam. In the past five years, the share of U.S.
exports by country has changed considerably, particularly for China, Vietnam and
Indonesia.
In 2014, China accounted for 23% of U.S. cotton exports, compared with their
2010-14 average of 37%. Vietnam accounted for 15% of U.S. cotton exports in
2014, compared to its 2010-2014 average of 6%.
Turkey, Indonesia and Mexico have continued to remain important export
customers as well. Over the past five years, Turkey has continued to be our second
largest customer, accounting for about 15% of U.S. cotton exports.
However, the demand for U.S. cotton by Turkey has been affected by an ongoing
anti-dumping investigation by the Turkish government against the U.S. cotton
industry. For the past year, Turkish authorities have been investigating U.S. cotton
exporting companies to determine if U.S. cotton is being dumped into the Turkish
market.
According to international trade rules, dumping occurs when product is sold into a
market at below costs of production or at a price below that being sold in other
markets. An affirmative finding by Turkish officials would mean that an antidumping duty would be applied to U.S. cotton imports, while imports from other
countries would remain duty free.
A duty would undermine U.S. cottons competitiveness and directly affect prices
received by U.S. cotton producers.
Looking ahead, one of the key factors affecting the demand for U.S. cotton is
quality an extremely important factor in determining the price of cotton. U.S.

cotton quality has been improving continuously over the past decade due to
enhanced crop management practices and technologies, including the use of new
and improved seed varieties.
In the past 10 years, the average staple length has increased with about 60% of the
U.S. Upland crop averaging a staple length of 36 or higher. At the same time, the
average color grade is higher due to improved harvesting and ginning
technologies.
Many of our major importers prefer U.S. cotton due to the excellent quality and
longer staple length needed for certain spinning technologies.
Producing high quality U.S. cotton for textile mills in the United States and
abroad is essential for our industry to remain competitive, as about 75% of the
U.S. crop is exported each year. The main competition for U.S. cotton is from
man-made fibers, as well as other high quality machine-harvested cotton from
Brazil and Australia.

Campiche is Vice President, Economics & Policy Analysis, National Cotton

Council of America