Farmers may pay the price for ASEAN economic growth

via Oxfam Philippines

As foreign and private investments in agriculture continue to swell in Southeast Asia, the irony isn’t lost on its small farmers.

“Instead of helping them, private investors in the region seem to have turned their backs on farmers,” said Norly Grace Mercado, East Asia regional coordinator of Oxfam’s GROW campaign at a forum held yesterday, in Manila.

The forum gathered representatives from civil society, the academe and government to discuss the impacts of investments on agriculture and small farmers in Southeast Asia and what can be done to safeguard their rights.

Foreign investments have shot up in the region on the back of demand for food and agricultural products from increasing incomes and populations in the developed world. The surge in the global requirements for biofuels has also encouraged many companies to invest in large-scale agrofuel feedstock in Asia and elsewhere.

Outsourcing food has also found currency after the 2008 rice price crises and amid continuing volatile food prices. The shift in production priorities in large economies, which have encouraged investments in other countries for agricultural production, is another contributing factor.

Governments naturally look at these investments as an economic win.

“In 2010, foreign direct investments (FDI) were valued at USD 74 billion dollars, representing an increase of 95.6% from the previous year. While this figure certainly contributes to economic growth in the ASEAN, private investments may also be a source of problems for many of its food-producing communities,” said Ms. Mercado.

For one, Oxfam has found that foreign investments acquire tracks of lands which displace thousands of poor farmers, if not forcibly evicting them.

In 2011, the Forest Peoples Programme filed a third complaint against a subsidiary of Wilmar International for the violent eviction of more than 83 families as the latter sought to gain control over 20,000 hectares of land of the Batin Sembilan people.

Based on Oxfam’s initial findings, foreign investments meant for producing food, feedstock for agrofuel or as raw material for exports, correspond to less land for domestic food production, and therefore, a recipe for food insecurity. Farmers almost often get the short end of the bargain with foreign investors. Farmers without access to credit to cultivate their farms have very little choice but to rent out their land at very dismal rates.

In cases of crop failures under contract farming arrangements where investors supply the farming technology and outputs like seeds as an advance to farmers, the latter become buried in debt. Unfair labor practices, from poor health and safety conditions to low wages, also abound, Oxfam has found.

Private agribusiness often determines the prices as well as product quality standards, without consulting farmers.

“While we see the value of private investments in boosting the ASEAN economy, we must also work to protect the rights of men and women food producers,” said former Senator Orly Mercado, secretary general of forum co-organizer Eastern Regional Organization for Public Administration (EROPA) and former Permanent Representative of the Philippines to the ASEAN, who was one of the principal reactors at the forum.

“ASEAN member countries must agree to develop a regulatory framework that encourages private investments in the region but at the same time promotes the welfare of poor communities,” said Mr. Mercado.

According to Oxfam’s Norly Mercado, this framework “includes enforcing Free, Prior and Informed Consent (FPIC) in all negotiations and developing standards for good contracts. The framework must also address the protection of areas dedicated solely for food production and the creation of a mechanism where farmers can file complaints and seek redress for any abuse committed by private entities.”

Oxfam is an international aid organization working in close to 100 countries worldwide. Under its Grow campaign, Oxfam supports poor women and men produce food sustainably and calls for the private sector and governments and citizens alike to find ways to fix the broken global food system. For more information on the Grow campaign, visit