NCER: Who benefits more – Sime Darby or farmers?

Prime Minister Abdullah Badawi has launched the Northern Corridor Economic Region (NCER) masterplan. The masterplan was designed by Sime Darby although the project will be implemented by a regional coordinating authority.

But Sime Darby is not a disinterested party. It is eyeing the seed market and planning to produce patented “mother seed” for 10 popular crops, which it wants to sell, along with fertilisers, to the farmers. Not only that, it will buy the farmers’ produce, process it and market it via Tesco (in which Sime Darby has a 30 per cent stake).

When I contacted Jeyakumar Devaraj for comment, he told me, “It boggles the imagination that the government has come to the stage of contracting out the planning for poverty alleviation to a corporation whose primary aim is to maximise profits for shareholders.”

He said that smaller farmers could end up being pushed out or turned into agricultural labourers. Those who cannot afford to buy the expensive feed/fertilisers and don’t have economies of scale will end up losing their land. They might end up as casual labourers or be forced to move to urban areas.

“It is the invasion of corporate capital into the agriculture sector. We can see what they have done to the plantations sector: they have brought in cheap foreign labour to suppress wages below the poverty line. The same companies are moving into the traditional peasant sector.”

He pointed to how the Jabatan Hal Ehwal Orang Asli had developed plantations on Orang Asli land in the Sungai Siput area, but these are being run by private contractors who prefer to employ Indians and Bangladeshi labourers for agricultural work, leaving the Orang Asli without their land and their work.

Sarojeni Rengam of Pesticide Action Network (PAN) was also concerned. PAN’s experience of contract farming in other Asian countries suggests that the quality of the crops in the first two years would probably be acceptable. “But after that, the produce is often rejected or bought over at reduced prices” – the excuse being failure to comply with quality control standards. QC would also be used to justify “calendar spraying” according to the time of year rather than based on the actual pest problem.

Farmers may be given credit to buy proprietary seeds, pesticides and fertilisers, but this would be deducted from harvest revenue. ‘’If the produce is rejected, the farmers would be caught in a debt trap and find it impossible to survive.’’

Charles Santiago, for his part, said Sime Darby has identified the problems but the solutions have not been well thought out. “Controlling the seeds and and reorganising rice production based on agrobusiness models will not solve the systemic problems.”

“What is clear is that Sime Darby, a government-linked company, has been given the opportunity to further its investments in the country. …(and) the parties who control the seed will also control the livelihoods of the farmers.”

This is the article I wrote for IPS:

PENANG, Jul 30 (IPS) – The Malaysian government is unveiling an economic master-plan that it hopes will “revolutionise” farming and transform the economies of four northern states.

Planners say the blueprint will raise farmers’ incomes but activists are concerned that it will instead make them more dependent on a small group of large corporations, which could take control of the entire food production chain from seed to retailing. Full article: Big top-down farm revival powered by business