Wednesday, 31 March 2010

More monoculture plantations in Indonesia

The deforestation and greenhouse gas emissions of Indonesia’s palm plantations are well known. Indonesia has the world’s most palm plantations at 7 million hectares, and the government plans to nearly triple palm plantations to over 20 million in the next decade. In February 2009 a freeze on palm plantation on peat land was lifted, making about 2 million hectares of peat land eligible for palm plantation. Clearing the peat releases millions of tonnes of carbon dioxide (CO2) into the atmosphere. Greenpeace estimates Indonesia’s peat land locks in 37.8 billion tonnes of CO2, mainly in the provinces of Riau, West Sumatra and Jambi. A report sponsored by the World Bank and the UK Department for International Development (DFID) found that up to 84 per cent of Indonesia’s CO2 emissions are from deforestation, forest fires and peat land degradation.

I was surprised to read that nearly half the current 7 million hectares of palm oil plantation is owned by smallholders, as little as two hectares can provide financial security for a family. This is not the picture we imagine when we hear about palm plantations, it is an important social dimension showing a broader importance of palm to the Indonesian economy, but the situation is complex and many small farmers still face losing their land for palm plantations. The World Rainforest Movement documents many recent instances of land grabbing for palm plantations. For example, PR Kresna Duta Agroindo (KDA), a subsidiary of Indonesia’s biggest holdings of palm plantations PT Sinar Mas, has been aggressively expanding, grabbing forest and rubber plantations in the village of Karang Mendapo in Jambi. Six hundred hectares of forest and rubber plantation were illegally cut down for incorporation into a larger palm plantation and ever since the villagers have suffered intimidation by people thought to be acting on behalf of KDA.

The International Finance Corporation, the private sector arm of the World Bank, continues to provide loans for palm plantations to Wilmar palm oil trading group, another firm with a record of ignoring social and environmental standards. No less than 19 Indonesian civil society and indigenous peoples’ organisations, have made reports with serious complaints of land grabbing, complicity in serious human rights abuses of communities opposing the firm’s activities, illegal clearing of forest and peat, illegal fires to clear land, failing to conduct environmental impact assessments and failing to honour assurances of areas for smallholders. Wilmar is rapidly growing its land bank towards a target of 1 million hectares of palm plantations in Indonesia and Sarawak. The company’s palm oil plantations are vertically integrated, aligned with ports, shipping facilities and refineries for incorporation into food products, detergents and cosmetics.

French fries
French fries
Now the palm plantations could become more closely integrated with the fast food industry. The Indonesian Agriculture Ministry has designated vast areas in two provinces to grow potatoes for French fries. The programme will start with 3,500 hectares in the Kerinci and Marangin districts of Jambi and South Minahasa district of North Sulawesi, then another 6,000 hectares in Jambi. In the meantime, around 11,000 hectares have been provided in South Manahasa district for the development of the particular potato variety. These areas have been identified as having the potential to be ‘potato production centres’ i.e. French fries monocultures. As is so often the case with monoculture plantations, the crop is an introduced rather than native variety and the seeds will come from foreign investors in Australia and Canada.

One enormous new plantation won’t be feeding anyone. 11,000 hectares of what is claimed by the administration to be neglected land in Pasuruan will be turned into a jatropha plantation to feed a biofuels plant in East Java. The plant will require about 550,000 tonnes of dried jatropha seeds to produce 1 million litres of fuel per year. The Pasuruan administration’s programme for farmers growing jatropha recognises that previous jatropha growing programmes had failed and farmers had lost money on the crop. The East Java jatropha plant could be just the beginning of a massive programme of new biofuel plantations, as it is claimed that Indonesia has 77 million hectares of neglected land, 50 million of which are suitable for growing jatropha.

Jatropha was hailed as the wonder biofuels crop with its black berries yielding up to 40 per cent oil, but crops have been failing around the world. Claims that the inedible plant does not compete with food supplies are crumbling, as instead of growing well on marginal, infertile land the crop is only proving successful on fertile land and requires water and fertilizers. The Action Aid report Meals per gallon: the impact of industrial biofuels on people and global hunger interviewed farmers in many countries including India, Kenya, Senegal and Ghana who have been displaced from their land for jatropha plantations or lost money on the failed jatropha crops which the authorities had encouraged them to grow. The potential rewards of successful large scale plantation of a new ‘black gold’ energy crop, both the revenues from the fuel and the technology for processing it, are sufficient to motivate large scale experiments in growing jatropha. But poor farmers are being exposed to the risks as crop yields and markets are highly uncertain.

Tuesday, 2 March 2010

The price of rice

As grain prices rose at the beginning of 2008, triggering the food crisis, India, like many countries, banned rice exports. The ban, which began in April 2008, did not apply to basmati rice, which is long grain, aromatic and fetches about twice the price of non-basmati on export markets. More than 70 per cent is exported to Gulf countries and about 12 per cent to the EU. India raised the minimum export price of basmati rice from $1,1000 to $1,200 per tonne.

Simultaneously, representatives from the Indian Ministry of Commerce and Industry met with the United Arab Emirates (UAE) Minister of Economy HE Eng Sultan Bin Saeed Al Mansouri. The goal of the meeting was to strengthen bilateral trade between the two countries, including increased UAE investment in India’s infrastructure including food processing, and an assured supply of basmati rice from India to the UAE, which imports about 300,000 tonnes of basmati rice per year from India, Thailand and Pakistan.

Ever since, UAE has piled on the pressure to cut basmati rice prices. India lowered the minimum export price of basmati to $900 per tonne in September 2009 to compete with lower cost basmati from Pakistan. In the UAE the price of rice plunged by 35 per cent January 2009, then by 15 per cent in the three months to April 2009. Many traders were offering an extra kilogramme of rice for every two purchased, which makes a minimum export price ineffectual.

Yet UAE demand for non-basmati rice is falling. The main consumers of this cheaper rice are the migrant workers from India and other South Asian countries in camps providing cheap labour for the construction boom. These camps have reduced their provision of free food in order to cut costs. There have been many reports of rates of pay too low to send money home, strikes, deaths from heat and exhaustion, suicides and malnutrition in camps, such as this from The Times in 2007. This photo gallery in the Guardian newspaper gives a glimpse of conditions for migrant labourers in Dubai. Since then, migrant workers have been at the sharp end of the recession. In March 2009 it was reported that some construction firms have cut labourers’ meals from three to one per day. The UAE Ministry of Labour itself reports overcrowding with up to 40 per cent more workers crammed into camps to cut costs, violations of labour law including late payment, reduction in wages, unpaid leave and termination of service without required end of service benefits.

India’s rice yields for 2009 are down, largely because of a weak and late monsoon, the worst monsoon since 1972. India’s ‘year of drought’ may reduce rice yields by about 18 per cent. Bad weather has also affected rice yields in the Philippines and Latin America, which may trigger a surge in prices to record levels. India might import 3 million tonnes of rice in 2010.

Yet India’s basmati rice exports for 2009-2010 are set to surpass the 2,100,000 tonne export target set by the Agricultural and Processed Food Products Export Development Authority (APEDA), an increase of about a third over the previous year. Basmati rice has coped better with the drought as the crop requires less rain than non-basmati varieties and copes better with late rain. But the crop also benefits from government support in assuring water for irrigation. APEDA Chair Asit Tripathy stated his confidence that exports will unaffected by drought as basmati rice areas benefit from access to underground water sources, and paying for a consultant to conduct an annual satellite survey of basmati rice growing areas.

Yet again, the Indian government’s food export drive takes priority over feeding hungry people, and the countries importing the Indian produce appear to have the upper hand in leveraging lower prices. My previous post about India’s food export drive as 200 million go hungry requires updating, as the estimates are rising. Vandana Shiva, calls India the ‘hunger capital of the world ’ noting that 214 million people, one in four, go hungry in India. And outside India's borders, many of the migrant workers in UAE, about 1.5 million were from India in 2008, are also at risk of hunger.

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