26 May 2011

Liberalisation leading to foreign control of food sector

Kompas - May 25, 2011

Hulu-Hilir Pangan oleh Asing – Kompas. Rabu, 25 Mei 2011 <http://cetak.kompas.com/read/2011/05/25/03064394/.hulu-hilir.pangan.oleh.asing.>

Jakarta – Foreign penetration through multi-national companies in the food sector is increasing and spreading. Foreign companies in Indonesia don't just control trade, but have spread into upstream activities such as agricultural production, covering seed and medicines, through to the processing, packing, trade, transportation and the retail industry.

This was revealed by research professor Husein Sawi from the Agricultural Department's Agricultural Research and Development Agency on Tuesday May 24 in Jakarta.

Husein said that liberalisation in the trade and industrial sector had provided an opportunity to foreigners to increase their markets in Indonesia, as well as other developing countries. "They have moved like a single packet. As soon as liberalisation opened up they took control of every line", he said.

Initially they went into trading. In order to guarantee the supply of goods, they then moving into production. In order to increase the volume of production, they took control of the seed industry and created a dependency.

If that was not enough, they moved further into processing industries though the acquisition of national companies. In order to ensure that their products sold, foreign companies have got into the retail sector.

The agricultural input industries are supplied by only 10 multi-national companies (MNC) with a sales turnover of as much as US$40 billion [annually]. Five of biggest of these companies are Syngenta, Monsanto, Bayer Crop, BASF AG and Dow Agro.

Conversely, farmers still depend on the processing industries and food traders. Ten big MNCs control food sales valued at US$409 billion including Nestle, Cargill, ADM, Unilever and Kraft Foods.

Indonesia has fallen into the grip of the global network of MNC, particularly the largest ones such as Nestle, which controls the global cocoa trade, Cargill that controls the livestock feed trade and Unilever, which controls processed food.

The world's food retail sector is also controlled by MNC such as Wal-Mart, Metro Group, Tesco, Seven & I Holdings and Carrefour.

Husein revealed that many local food products have been sold to foreign companies such as Danone (France), Unilever (Holland), Nestle (Swiss), Coca Cola (US), HJ Heinz (US), Campbell's (US), Numico (Holland) and Philip Morris (US).

Agricultural Minister Suswono revealed earlier that the politics of agro-industry policies in Indonesia are controlled by a particular group, which has strong access and lobbying powers, not just within the government, but also in the legislator.

[Translated by James Balowski.]

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