"I Farm, therefore I Sovereign": Critical Study of ASEAN Economic Community 2015 in the Food Sector in Indonesia

"I Farm, therefore I Sovereign": Critical Study of ASEAN Economic Community 2015 in the Food Sector in Indonesia

Langitantyo Tri Gezar, Universitas Indonesia

Indonesia is the country with the greatest economic power in Southeast Asia. One of the new emerging forces of the world economy with 9th largest GDP (Gross Domestic Product) in the world, so it was appointed as a member of the G-20, together with big countries like United States of America, Russia, China, and India (World Bank, 2013)[1]. In addition, Indonesia has also become the 7th widest nation in the world, including 1.922.570 km2 of land and 3.257.483 km2 of water (majority is ocean). Not to mention, with a humid tropical climate and 3rd richest biodiversity in the world after Brazil and Congo, it is logical if Indonesia become a prosperous nation, especially in the food sector. But in reality, the sovereignty in food sector has not established yet there.

FAO on September 24, 2010 release a data that shows in those years, 1 billion people experiencing hunger. As much as 98% of it occur in developing countries, and each year 8.1 million children under five years-old died in these countries. Not to mention the problem of malnutrition which causes 60% of deaths in 2009, as well as about 130 million people who suffer from hunger because of rising food prices.[2]

Food sovereignty establishment and liberalization in food sector is a major challenge faced by Indonesia and also developing countries in the near future. With a population reaching 237,6 million in 2010 (BPS, 2010)[3] and is forecasted to reach 270 million inhabitants by 2025 (Hanafie, 2010: 272), Indonesia should immediately take strategic steps to prevent massive famine while sustaining food sovereignty by reducing dependence on imports.

ASEAN Economic Community: Food in the Middle of Liberalization

Food is the most essential needs, determining the quality of human resources as well as socio-political stability in development of a country. Food is not only a basic need but also the fundamental rights for every human being, and is mandatory to be protected. Then, “nation” or “state” as a form of human’s endeavor to aggregating the people’s needs, are obliged to ensure each individuals to get access to nutrious and decent food (Hariyadi, et al, 2009)[4].

However, liberalization of the food sector is threatening the fulfilment of these rights. The establishment of ASEAN Economic Community or AEC is perceived as a threat rather than an opportunity in face of Indonesia’s food sovereignty. The primary keys of AEC are; (a) a single market and production base, (b) a competitive economic area, (c) a fair development region, and (d) ASEAN’s integration into global economy. In spirit of neoliberalism, which means reducing government’s role in economy and public sectors, ASEAN becomes a region where goods, services, capital, and workforce are moving freely, including in the food, agriculture and forestry sector, as noted in the AEC’s blueprint, item A7 (Hertanti, 2012)[5].

As an economic paradigm, neoliberalism assumes that market is the most effective actors to determine the success of a national development. Intervention of the government, such as subsidies and tariffs, are looked as barriers that reduce the effectiveness of market mechanisms (Mantra, 2011: 4)[6]. Neoliberalism, or often called as the "Washington Consensus", designed as a response to the economic problems in Latin America in the 1980s, in which their economic policies were geared to reduce unemployment and equitable income, but thus caused a huge deficit and crisis. Neoliberals see the failure was caused by fails of state-owned enterprises, streamline protection policy which made private companies were became inefficient, as well as a loose monetary policy that lead to uncontrolled inflation (Stiglitz, 2002: 53)[7]. To answer it, World Bank and IMF  offered three pillars of reformation: fiscal austerity, privatization, and free-market liberalization. This model of policy is based on a competitive equilibrium model which rooted in the principle of Adam Smith’s "invisible hand". The basic assumption of this paradigm is putting the market as the main actors of the economy, the liberalization of the market without government’s intervention, deleting the government’s spending in the public goods, deregulating policies that restrict market mechanisms, as well as privatization of government’s assets (Mantra, 2011).

Majority of ASEAN member are agricultural countries. With its geographical and socio-cultural potentials, ASEAN has an opportunity to become the producer of the global food needs. However, liberalization in these sectors have been caused much harm for Indonesian farmers. The number of households in agricultural enterprises in Indonesia are recorded as much as 26,14 million, agricultural enterprises incorporated by law firm is 4.165 totaled, plus other types of agricultural businesses as much as 5.922 units, both in the area of crops, horticulture, animal husbandry, fisheries, forestry, and agricultural services (BPS, 2013)[8]. According to the Indonesian Farmers' Alliance (2011)[9], in 2010, China-ASEAN Free Trade Agreement (CAFTA) a neoliberal policy that preceded AEC, had harmed Indonesian farmers through the invasion of imported goods from China. For example, the importation of onions all year in 2011 reached 17.25 million kilograms with a value of 5.9 million USD, or surged 264% compared to December 2010, made Indonesian onion farmers lose a potential income amounting to 14.675.192.000.000 IDR (around 1.2 billion USD).

Neoliberalism has moved the food pricing, which were previously regulated by the government, into market mechanisms. The free market gives room for brokers to determine the price of commodities, so the food sector is no longer aiming at the fulfilment of domestic needs, but rather to satisfy the interest of conglomerates (Hertanti, 2012). The impacts of liberalization of the food sector are; (a) losses of farmers and poor, (b) causing food crisis, (c) revoke the government’s sovereignty in deciding food policy and its national needs. It has changed the  status of many food producers to become food importers, where 70% of developing countries have become a net importer, making Indonesia which once was the largest rice producers to become the biggest rice importer in the world (Ibid).

I Farm, therefore I Sovereign

Neoliberalism has become a de facto economic policy paradigm which hegemonized Indonesia. However, constitutionally, the government should still play a central role in national development regarding food sector. The opening of the 1945 Constitution states that, "to form a Indonesian Government which protects...and to promote the general welfare...based on independence, peace, and justice," then Indonesia food policy must cater for the welfare of the people.

The concept of food sovereignty is a paradigm that can be placed as replacement to neoliberal policy in the face of AEC 2015. This concept holds on; (a) organizing food production based on national needs, (b) prioritizing the fulfillment of national consumption, (c) deregulating the food policies and reserves through protection of domestic market from the negative influence of free market (Hertanti 2012). This policy can be realised with 3 ways, i.e. from bottom, from within and from outside;

(1) From bottom: building Indonesian agriculture from grass roots. Empowerment of local farmers should be conducted through subsidies for agricultural purposes such as organic fertilizer, seeds and construction of irrigation systems, developing farm communities, both in terms of capital, managerial, and technology, as well as running the reforma agraria program;

(2) From within: extending the authority of “Bulog” as government agencies that oversee, organize, and conduct national food needs to become pro-poor. These include the authority to determine the policies of the food export-import, stabilizing food prices in upstream to downstream bases, securing food accessibility, and also coordinating actively with all food sector’s stakeholders;

(3) From outside: Revising agricultural commitments with WTO and ASEAN prioritizing national interests, and seek foreign cooperation partners for mutual benefit in order to achieve a balanced food sovereignty.

Although it was assumed for Indonesia’s interest and perceived in Indonesia’s perspective, the writer think that the problem of food sector in developing countries are not much differ. The brutal liberalization in this sector is a threat for our sovereignty. We should rethink and speak it aloud in vision the government and policy makers shall change its strategy more for the sake of people rather than for the capitalists and food brokers.

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[1] World Bank. 2013. Gross domestic products 2013, PPP. http://databank.worldbank.org/data/download/GDP_PPP.pdf, retrieved on October 31, 2014.

[2] Daeng, Salamudin. 2010. Kedaulatan Pangan Solusi Mengatasi Krisis Pangan. Free Trade Watch. Hal: 97-99.

[3] Indonesia’s Central Bureau of Statistics/Badan Pusat Statistik. 2010. Hasil Sensus Penduduk 2010. http://www.bps.go.id/65tahun/SP2010_agregat_data_perProvinsi.pdf, retrieved on October 31, 2014.

[4] http://www.pps.unud.ac.id/thesis/pdf_thesis/unud-154-650390876-bab%20i,%20ii,%20iii,%20iv,%20v,%20vi,%20vii%20new.pdf, retrieved on October 31, 2014.

[5] Hertanti, Rachmi. 2012. Thesis. Kajian Atas Dampak Pasal 1 Angka 5 ASEAN Charter mengenai Pembentukan Pasar Tunggal & Basis Produksi (Single Market & Production Base) terhadap Sektor Pangan di Indonesia. Jakarta: Universitas Indonesia.

[6] Mantra, Dodi. 2011. Hegemoni dan Diskursus Neoliberalisme: Menelusuri Langkah Indonesia Menuju Masyarakat Ekonomi ASEAN 2015. Bekasi: MantraPress.

[7] Stiglitz, Joseph. 2002. Globalization and Its Discontents. London: Penguin Books.

[8] Indonesia’s Central Bureau of Statistics/Badan Pusat Statistik. 2013. Laporan Hasil Sensus Pertanian 2013. http://st2013.bps.go.id/st2013esya/booklet/at0000.pdf, , retrieved on October 31, 2014.

[9] Indonesian Farmers’ Alliance/Aliansi Petani Indonesia. Juli 2011. Impor dan Kerugian Akibat ACFTA Sektor Pertanian, Pangan, dan Perikanan.