One Step Forward, Two Steps Back: Food Security in Southeast Asia

In recent years, ASEAN has seen a remarkable shift in the ways in which nations, both within the regional grouping and outside, pursue their national food security interests in Southeast Asia. The most notable change has been the large-scale acquisitions of land by foreign companies and sovereign wealth funds for agricultural purposes. We see similar examples in Africa and South America. According to the Food and Agriculture Organization (FAO), the race towards the acquisition of farmlands overseas was triggered by the assessment that the era of guaranteed food security may have passed.

(left: Ryan Clarke) FAO estimates show that the price of staple food items has increased by 17 per cent in real terms compared to previous years. The global food index has also remained high despite the recent international financial crisis. The general sentiment appears to be that this is a reality that is here to stay. If accurate – economists’ views are mixed – this means that households would either spend more money on food or that they will simply eat less and consume less nutritious food. At the same time, the investing nations also believe that there is money to be made from agricultural investments. The FAO world food price index has steadily increased in the last ten years from 90 in 2000 to the present level of 162. The index peaked in 2008 at 191 and in January this year, it recorded the second highest level of 174.

(right: Nur Azha Putra) Between 2008 and 2009, investors from Kuwait, Bahrain, Saudi Arabia, Qatar and China have made inroads into ASEAN by reaching land agreements with Cambodia, Laos, the Philippines, Indonesia, and Vietnam. Hanoi has also engaged in this practice by acquiring large chunks of land in Cambodia as well as Laos although this land is officially destined to be used for rubber production. Not surprisingly, given the highly sensitive nature of this issue, combined with at-times opaque conditions surrounding the negotiations, these developments have proven to be controversial.

Several think tanks and other policy institutes have condemned this practice from the outset by claiming that it will inevitably harm the food security of the nations who are leasing out their lands.These research institutes also tend to be those which are protectionist..To be sure, acquisitions have been met with stiff resistance and even political violence in certain parts of Southeast Asia. However, in other parts of the region these developments have received a neutral or even a positive response. Finding a base line in this otherwise noisy and conflicted signal will prove to be a challenge in future analysis but it is important to take a balanced approach to this critical non-traditional security issue.

Implications for ASEAN

No ASEAN governments involved in this practice are in a desperate financial position, are pariah states, nor can any of them be classified as irrational. As such, it can be reasonably assumed that these agreements have been made under relatively normal circumstances with mostly commercial and economic interests in mind. The protests in some ASEAN states could be a measure of the failure of the government in question to adequately consult local constituencies or, conversely, these agreements could indeed be a bad deal that harms long-term national interests.

On the positive end, with large-scale foreign investment should come technology and management expertise while also enhancing food security in Southeast Asia through reducing both supply and price pressure. The companies in question will undoubtedly supply local markets and create employment. These lands would not likely have been sold off in the first place if they were operating at an optimum level. Further, in theory they should also spur competition and innovation, something which is of benefit to all parties involved. However, with land acquisition, even if it is only leased, comes political power and these governments will now have to factor in largely self-interested foreign powers into their domestic policymaking calculations.

It also begs the question of whether this will eventually alter regional understanding of the key concepts associated with sovereignty, namely the ability to develop and implement domestic policies without undue interference from external governments. However, given the highly strategic nature of food security, any future disputes will inevitably involve governments even if the companies are officially operating in a completely private capacity (even more so if they are sovereign wealth funds).

The way in which labour disputes, disagreements over land usage or the types of crops being grown, contract enforcement, or a range of other issues are managed will be crucial in maintaining the current regional understanding of sovereignty or, more controversially, in permanently altering it. 

Time for a Serious Regional Policy Debate

Given the sheer number of nations and hectares involved in a sector which is a basic tenet of every nation’s national security and the overall well-being of its population, a serious and sustained debate with regional policy formation and/or regulation in mind is likely in order. Although new provisions should not be applied ex post facto to agreements that have already been signed (unless they are flagrantly and indisputably exploitative), ASEAN can take meaningful steps to ensure that its interests will be protected and that the human security of its citizenry will not be jeopardised in the future.

However, it is advisable to resist the temptation to strictly regulate the practice right from the outset. Rather, empiricism and a balanced analysis of both the positives and negatives have a much higher probability of leading to sound actions.

Ryan Clarke and Nur Azha Putra are Visiting Research Fellow and Associate Research Fellow, respectively, at the Centre for Non-Traditional Security Studies (NTS), S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.