farmers decry plan to put transmission towers in fields

26 The Manitoba Co-operator | November 29, 2012
WORLD NEWS
F A R M I N G N E W S F R O M A B R O A D
Indonesian workers stitch sacks of flour at the Bogasari flour mill in Jakarta. The Indonesian government is considering
a wheat flour import tariff to protect domestic mills. PHOTO: REUTERS/BEAWIHARTA BEAWIHARTA
Indonesia passes
new law aimed at
food self-sufficiency
Critics fear investment may be hit; consumers to pay higher prices
By Michael Taylor
JAKARTA / REUTERS / STAFF
Indonesia has drafted a food
law to speed self-sufficiency
efforts by creating a new
“super body” that could lead to
greater curbs on imports and
exports of staples, hinder muchneeded
overseas investment
and eventually push up prices.
As Indonesia struggles to
meet rising demand from an
increasingly affluent population
of 240 million, it is now the
world’s top importer of sugar,
Asia’s largest buyer of wheat,
and imports about two million
tonnes of rice and corn each
year.
A copy of the law seen by Reuters,
which is due to be signed
off by the president by the end
of 2012, shows that it covers
areas such as food safety and
the stocks, trade, purchase,
prices, distribution and consumption
of unspecified staples.
“In the new law we stress food
sovereignty and autonomy,”
said Achmad Suryana, head of
the Food Security Agency at the
country’s Agriculture Ministry,
adding that it gave priority to
securing adequate food supplies
from domestic sources.
“So, food import would
be secondary or even the last
resort,” he said.
Consolidating many existing
curbs on food items, such as
import limits and tariffs to protect
domestic farmers, the new
law provides for the new body
to be created within three years.
It will aim to help the government
achieve self-sufficiency in
staple foods such as rice, soybeans,
sugar, beef and corn.
The new law puts domestic
output and demand and the
control of imports and exports
at the heart of its efforts, which
will finalize the expanded role of
state procurement agency Bulog
into the “super body.”
Global agribusinesses called
for greater clarity on the details
of the new food body, since its
objectives can be interpreted in
different ways and are opaque.
Greater restrictions feared
Critics say the new law could
lead to more limits and trading
curbs on the free flow of farm
commodities, hinder overseas
firms looking to invest to supply
growing demand in the archipelago
and ultimately, hurt the
poorest consumers.
“It is a misguided pursuit of
autarky in agriculture which
misses vast opportunities for
efficiency and competitiveness
in the sector,” said independent
analyst Kevin O’Rourke.
“I’ve read that the idea is to
incorporate two, three or maybe
four bodies into this new super
body,” he added. “Everything
depends on how the president
interprets the law and guides
the new food agency.”
The law could also hinder
food-processing industries,
which have been promoted
in Indonesia in recent years,
he added, as they scramble
for access to the cheapest raw
materials.
The new law also prohibits
“hoarding or storing staple
food,” a clause that may create
greater risk and uncertainty for
commodity traders who stockpile,
traders and analysts said.
Agriculture contributes
around 15 per cent to the GDP
of Indonesia, Southeast Asia’s
largest economy, employing
about 42 million people of a
growing population of roughly
240 million.
As wealth levels rise and
consumer tastes change and
grow, Indonesia has attempted
to vary its food basket beyond
rice, while expanding and
boosting yields in its homegrown
commodities with limited
success.
The law is one of a series of
policy announcements this
year, such as that on mining,
which analysts say are linked to
increasing economic nationalism
ahead of Indonesia’s presidential
elections in 2014.
“The new food law provides
vast scope for state involvement
throughout the agricultural sector,”
said O’Rourke. “It aims to
ensure adequate supplies of
affordable food, but by pursuing
this through autarky, it risks
accomplishing the opposite. You
can have autarky or affordability,
but you can’t have both.”
Bulog to grow
After the worst U.S. drought in
56 years drove global prices of
soybean and corn to all-time
highs this year, Indonesia said
it would extend the role of Bulog
beyond rice to build bigger
stockpiles of beef, corn, sugar
and soybean.
Bulog’s current role is to
maintain rice supplies and
stocks of between 1.5 million
and two million tonnes, but its
wider remit could see it protect
domestic farmers by setting
minimum prices, while consumers
would benefit from a
maximum price ceiling.
The government, which
is considering a wheat flour
import tariff to protect domestic
mills, also had its food policies
criticized last month in a report
by the OECD grouping of the
world’s top economies.
Just under 19 per cent of
the $780 million in Canadian
exports to Indonesia in 2011
were cereals.
By Gus Trompiz
GENEVA / REUTERS
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You ain’t seen nothing
yet — analyst predicts
$9 corn is on its way
AgResource says stocks are perilously tight
and if more weather woes hit,
“we don’t know how high is high”
U.S. corn prices could
rise to a record $9 a
bushel in the next
six months as global grain
markets continue to feel the
effects of severe weather disruptions,
says Chicago-based
consultancy AgResource Co.
The worst drought in half a
century in the U.S., the world’s
biggest corn grower and
exporter, triggered a price rally
that saw U.S. corn futures set
a record at $8.49 a bushel in
August, before falling back into
the $7 to $7.50 range.
Tight global corn supply will
be exacerbated by import needs
in the European Union, which
also suffered drought losses in
its 2012 harvest, and this will
help drive U.S. futures to the $9
landmark by May, said AgResource
president Dan Basse.
And further weather woes
could propel grain markets even
higher, he said.
“We’re living on the edge in
terms of grain supply,” he said.
“We better have good weather
next year. If we don’t have good
weather, we don’t know how
high is high.”
The continuing effects of the
U.S. drought are already hampering
emerging wheat plants,
which recently set a new low for
wheat crop ratings for this time
of year, while heavy rainfall is
delaying wheat sowing in major
European producers France and
the U.K.
Limited options
Corn import demand in the
EU is expected to be between
10 million and 12 million
tonnes in 2012-13, Basse said.
This would be as much
as twice last season’s EU corn
imports and the second-largest
volume on record after the
14 million tonnes imported in
2007-08, when weather-affected
harvests across the world sent
prices soaring and sparked food
riots in some poor countries.
BRIEFS
Move over Ted Turner
However, in a world corn
market showing the lowest
stocks-to-use ratio in nearly 40
years, the EU may struggle to
secure all the corn imports it
needs from favoured suppliers
Ukraine and Brazil, Basse said.
This could prompt the EU
to import some American sorghum
as an alternative livestock
feed, he added.
Weather damage this year
has also tightened supply in the
world wheat market, providing
little relief to tensions in corn.
“We think this is the year of
corn, but wheat isn’t far behind,”
Basse said.
Recent weather problems in
Argentina and Australia have
underlined limited supply
among major exporters after
poor crops in Black Sea producers
like Russia and Ukraine.
The market is facing the
prospect that some 30 million
tonnes of wheat shipped by
Black Sea and Southern Hemisphere
exporters in the second
half of last season may not be
available from these sources in
the latter half of 2012-13, Basse
said.
The U.S. will cover some of
this shortfall as the only major
exporter with relatively comfortable
stocks, but with the
EU exporting at a fast pace in
relation to its low stocks, the
wheat market will have to ration
demand, he said.
AgResource expects U.S.
export prices will rise to a peak
between $400 and $430 a tonne
— versus the current $345 — by
March for free-on-board rates in
the U.S. Gulf to reflect demand
for U.S. supply.
Despite high prices and
limited supply, global grain
demand remained strong,
driven by Chinese-led growth
in Asia.
“What we have is a supplydriven
bull market with demand
rationing occurring at the
fringes,” Basse said. “We don’t
see any evidence today that
China is slowing down on its
food consumption.”
John Malone, founder and chairman of Liberty Media, is
now the largest private landowner in the U.S., The Land
Report magazine says.
The magazine states Malone owns 2.2 million acres, which
puts him just ahead of Ted Turner with two million acres.
Malone moved into the No. 1 spot with his purchase of
one million acres of New England timber.
Prior to that purchase, he jumped into the land-buying
headlines with his purchase of the famous Bell Ranch, a
290,100-acre operation in New Mexico dating to the 1824
Montoya Land Grant.
However, Turner is still No. 1 when it comes to the size of
his bison herd, numbering 50,000.