Multinational Monitor

JUL/AUG 2000
VOL 21 No. 7


Freedom to Fail: How U.S. Farming Policies Have Helped Agribusiness And Pushed Family Farmers Toward Extinction
by Ben Lilliston and Niel Ritchie

In Firm Control: Industrial Concentration in the U.S. Livestock Market
by Michael Stumo

Flimflam on the Farm: The American Farm Bureau and the Betrayal of Family Farmers, Taxpayers and the Environment
by Vicki Monks

The Dirt on Factory Farms: Environmental and Consumer Impacts of Confined Animal Feeding Operations
by Mark Floegel


The Case for Small Farms
an interview with
Peter Rosset

In The Fields of Indonesia
an interview with Nila Ardhianie

Taking on Corporate Pork
an interview with Bryce Oates

A Serious Beef with the National Cattlemen's Beef Association
an interview with Jeanne Charter


Letters to the Editor

Behind the Lines

Agribusiness Market Hypocrisy

The Front
Truth about Trade?
- Dioxin Diet

The Lawrence Summers Memorial Award

Names In the News


In The Fields of Indonesia

An Interview with Nila Ardhianie

Nila Ardhianie is executive director of Yayasan Duta Awam (YDA), a non-governmental organization promoting community empowerment, democratization and sustainable development in Indonesia. She has led local and national advocacy campaigns for consumers', farmers' and children's rights, and is currently focusing on pesticide reform and community-based monitoring of multilateral development bank-financed programs and policies.

Multinational Monitor: What effects has the East Asian economic crisis had on farmers in Indonesia?

Nila Ardhianie: First, the economic crisis in East Asian has increased farmers' production costs. They have to pay more in order to get fertilizer, seeds, farming tools and of course pesticides. These are mostly paid for with dollars, so when our currency weakens and the dollar goes up, the price of these inputs also goes up.

Farmers' living costs have also increased because of the crisis. The price of their daily needs goes up along with the dollar.

What makes it worse is that the price of their products -- especially rice, a product of most Indonesian farmers -- does not increase significantly. This is because rice's selling price is determined by a presidential decree. Here, you can see the unfair economic system in our country; farmers are not only a group of people who have heavy burdens, but their income is determined by the government.

These problems come from the government's macroeconomic policies and commitments toward the IMF. The government suddenly cut import taxes on rice and sugar -- two important commodities in the country -- to zero percent. The importers don't have to pay a single dime, so their products are cheaper than those made by the local farmers. The farmers have to compete with them, and as a result the prices of our local products drop.

The government has changed the policy since February 2000. The tax for imported rice is now 30 percent and for sugar is 25 percent. But it is a little too late. There are already hundreds of thousands of tons of imported rice and sugar on the market.

The IMF and its agenda have made it so that our government cannot decide what policy would be most appropriate to implement in our country, based on our people's conditions and aspirations. This is especially true in the farming sector, which is the most dependable economic sector in the country in times of crisis.

The government ignored farmers when they cried out for help. Farmers asked the government to protect them from foreign products, but they were ignored because the government had signed the IMF Letter of Intent, and they are obliged to do as it says.

The $45 billion loan offered by the IMF to reform our economy was accepted at first by the people of Indonesia. The people were very encouraged because the IMF demanded some conditions that we have long dreamed of, such as no more monopolies, freedom of speech, law enforcement, etc. But the facts were quite different. The Letter of Intent has made it so that our government is no longer free to determine which policy should be implemented, according to our people's aspirations and needs.

MM: How are development banks supporting the use of pesticides in Indonesia?

Ardhianie: Together with the farmers themselves, we monitored the Integrated Swamps Development Project (ISDP) -- a project financed by the World Bank. The results were pretty shocking. The project included pesticides in their inputs package, 80 percent of which are classified as either extremely (Ia), highly (Ib) or moderately (II) hazardous by the World Health Organization (WHO).

It seems that the World Bank is implementing policies that contradict the policies of other institutions such as the WHO, an organization under the UN.

We believe this hasn't only happened in the ISDP project, but also in other projects financed by the World Bank.

But the implementation of these projects is not transparent and it is almost impossible to conduct independent monitoring. That is why we do advocacy work and ask the World Bank for explanations of its policies.

But their response to our questions about the ISDP was quite strange. They responded by conducting their own research, without using specific pesticide classifications. They said that they were using classifications from Indonesia's Department of Agriculture. As far as we know, the Department has never made any independent pesticide classification -- they use WHO's classification.

We have asked the government to slow down the introduction of pesticides that are hazardous to both consumers and farmers. That is why we really regret the fact that the World Bank -- an institution we first thought would act as a control against bad governmental policy -- is doing exactly the same thing.

Now we are asking the World Bank to be more transparent. That way we can monitor their programs. The monitoring should be conducted independently by NGOs and the people themselves, because the chances for corruption in these projects are just as big as they are in the government's bureaucracy.

The most important thing for the agricultural projects is that there be no pesticides in the input package. The consumer countries have stated that they will reject products that contain pesticide residues, so it makes no sense at all if the World Bank encourages farmers in our country to use pesticides.

MM: Have community and NGO actions had an impact on World Bank policies?

Ardhianie: Until now, we have not had much success in achieving farmers' demands -- that is, in making farming healthy and free from pesticides, or in establishing a farming culture that is safe for farmers and for our biodiversity.

Our "enemies" are not just the pesticide industry, the genetically engineered seeds industry or their distribution agencies, but also our own government and international financial institutions like the World Bank. The problem has become very complex -- a lot of parties are involved here.

When the economic crisis struck Asia, we hoped that pesticide consumption in the agriculture sector would decrease by itself because their price was consistently going up.

But that did not happen. There were no significant decreases in the amount of pesticides sold. The producers did increase prices, but big promotions were also conducted, with many prizes and exclusive meetings with farmers and distributors in fancy hotels.

MM: What role have multinational corporations had in Indonesian rural communities?

Ardhianie: The multinationals' products have penetrated the lives of people in every community although the multinationals themselves remain something that is unfamiliar and "foreign."

Some pesticide producers that have successfully introduced their products without people knowing who they really are include Bayer, Novartis, Dupont, Aventis and Monsanto. Their existence shows how the multinationals -- who only hire hundreds of people in Indonesia -- can create farmers' dependency on pesticides. Farmers buy more pesticides with each planting season. The pesticide multinationals have influenced the farmers a lot, so that they even think that pesticides are a "medicine" for their plants. This problem of course makes it harder for us to reduce pesticide use.

In our villages, the agricultural sectors is one of the most profitable markets for multinationals. Fertilizers, farming tools, seeds and pesticides -- all are connected to the multinationals. Our farmers never know where the profits from these sales go. They only know that these products are only something they must buy, even if that means they have to get loans.

That is why I personally think that since our government is not able to do maximum supervision of multinationals, it would be best to use our resources by ourselves.

MM: What is the relationship of the pesticide companies and the government? Does the government collaborate with the pesticide companies to convince farmers to use pesticides?

Ardhianie: For 10 years, until 1986, our government subsidized pesticide use in our country. We know this from our National Planning Board (Bappenas). The amounts were quite fantastic: $1.5 billion. That is a large amount for our country; it is 2 percent of our total foreign debt, which is about $70 billion. Before it was restricted, the government subsidized pesticides up to 85 percent of their selling price.

Before Presidential Decree Number 3 was launched in 1986, pesticides were a "compulsory" substance for farmers who joined the KUT (farming credit). Aside from the money, with the credit package farmers also received pesticides and fertilizers. It was a bitter experience for our farmers. That is why we now monitor to make sure that farming credit does not include any pesticides.

It's difficult to determine what the present relationship is exactly. The government -- in this case the Department of Agriculture -- provides a lot of opportunities for the companies to play an important role in the agricultural sector.

MM: Is Indonesia still officially pushing an integrated pest management (IPM, involving efforts to minimize the use of chemical pesticides and substitute biological pest control methods) strategy? How effective has it been?

Ardhianie: Yes, Indonesia is still officially pushing an IPM agricultural strategy. Officially, this program will end in the year 2001 and I don't know what will happen next. The only reason why this program might close is because of a lack of funds. On the other hand, it seems that the IPM program is one condition that must be fulfilled by our government for accepting foreign loans.

If the government shuts down their IPM program, NGOs and the farmers themselves should work together to continue implementation. If not, the agricultural sector will become much more dangerous for farmers and consumers' health. The situation would become even worse because the pesticide companies also have their own IPM training, only they train farmers on "how to use pesticides correctly." You can imagine what would happen then.

The IPM strategy is quite successful for farmers. Unfortunately the same cannot be said at a higher level -- when evaluating the policymakers. A lot of farmers realize their mistakes after joining the IPM training. That is why IPM training is effective for farmers. But the ones in high places who are responsible for making policies and decisions continue to favor the pesticide companies.

MM: Are the bankruptcies in the banking sector resulting in problems for farmers trying to access credit?

Ardhianie: It is true that our national banking system is bankrupt and of course the banks now tend to focus on farmers' credits. But farmers' difficulty in accessing credit is not because of the bank bankruptcies. The banks have only acted as a channel for credit. They don't provide the money. It's all government money. The banks only channel the money and get processing fees in return. They assume no risk, but still receive payment.

If access to credit is now more difficult, it is because the money that was used to support this credit is now cut. One reason for the cuts is because the government has to allocate hundreds of quintillions of rupiahs for banking recapitalization. Farmers' credit would only take about 1 quintillion rupiahs per year, but for bank recapitalization an amount up to 300 quintillion rupiahs has to be provided by the government. That is why I think farmers should have a special institution to provide credits and not depend on the banks.

MM: Is genetically engineered seed being introduced in Indonesia?

Ardhianie: Genetically engineered seed in our country is something that is very new. Officially, GE [genetically engineered] seed has not been sold to the public.

But we have information that a few seed and pesticide companies are now starting to try planting GE seed in Indonesia. There are field tests in South Sulawesi for Bt corn, Bt cotton and Roundup Ready Soybeans; and in East Kalimantan for acacia and eucalyptus. The government (the Department of Agriculture) and the industry deny this, but indications show that trials have been conducted in a special area.

MM: How do you think GE seeds will affect small farmers?

Ardhianie: We haven't seen the direct impact of GE seeds on our farmers yet. What worries us is those trials. What if they involve hundreds or even more farmers and landowners without their knowledge?

Before this all turns out to be disaster, I think everybody whose commitment is to preserve our nature should join hand-in-hand to oppose it. At the very least we should keep educating not only farmers and consumers about the GE seeds, but also decision makers. Because GE technology is still very strange to our ears, but the threat is just outside our mouth.

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