By Hu Yukun
Battered by the COVID-19 pandemic and Russia-Ukraine conflict, Southeast Asia is experiencing a food crisis. Many countries in the region are seeking multiple approaches to navigate out of it, and enhanced agricultural cooperation with China could play an important part.
Precarious Food Supply
For ASEAN, the world’s fifth largest economy with a population of more than 680 million, the food situation became even more gloomy in 2022. Even before the outbreak of the Russia-Ukraine conflict, the Omicron variant had already interrupted supply chains and pushed up food prices, which weakened the purchasing power of many households and kindled questions about Southeast Asia’s food security.
Russia’s ongoing “special military operation” in Ukraine, stretching into its sixth month, is another catalyst for the worsening food crisis in these countries. Since the two neighboring European countries account for 29 percent of global wheat exports, 19 percent of the world corn supply, and 80 percent of world sunflower oil exports, Southeast Asia might even be at risk of “social unrest” due to food shortages, according to Mohamed Faiz Nagutha, an ASEAN economist at Bank of America Securities, speaking to CNBC in May.
This summer, some ASEAN countries have found themselves grappling with the highest food inflation in a decade. In Laos, Indonesia, Thailand, and the Philippines, the figure has already surpassed 6 percent. After Malaysia decided to ban chicken exports on June 1 due to the food shortage, Singaporeans didn’t have enough chicken rice, their de facto national dish, to consume.
Both the COVID-19 pandemic and Russia-Ukraine conflict are contributing to the global food supply disruption, but ASEAN would not necessarily be enjoying a secure food supply otherwise. A perpetual problem persists in these countries: low productivity. The port city of Singapore, for instance, does not have natural hinterland and can only produce less than 10 percent of its nutritional needs, while according to the Asian Development Bank (ADB), Indonesia, one of the world’s largest producers and exporters of agricultural products, has constantly failed to keep up with its growing population (the world’s fourth largest).
Food production in Southeast Asia is already highly vulnerable to climate change. In March, a report from Oxford Economics warned that the region’s climate has become consistently warmer and more unpredictable in the last decade, constantly impacting food production with lowered crop yields. Increasingly common extreme weather has contributed to vulnerabilities in these economies.
Meanwhile, sustainable food production in ASEAN countries is dependent on a stable supply of migrant labor. In recent years, controversies over migrant workers’ treatment have been exposed, especially sub-standard pay, tough labor conditions, and lack of legal status. Before the pandemic, Thailand was home to over 3 million migrant workers, mostly from other countries in the region, while in 2020 all the countries in the region had their migrant workers reduced. If these already marginalized migrant farm laborers are still blocked by tightened border controls, local crop production and food supply will remain threatened.
The pandemic and Russia-Ukraine conflict are further complicating Southeast Asia’s persistent food vulnerabilities. With the increased freight costs, port congestion, and even blockades, the supply chain disruption has severely impacted necessary food imports, especially staple food for countries like Indonesia. Furthermore, the loss of fertilizer from Russia, which accounts for nearly 10 percent of the region’s supply, and the interruption to the flow of migration workers are further impeding local food production.
Emergencies around the world have helped sound the alarm about food insecurity in Southeast Asia, and now is the time for countries in this region to take firm action to address the growing crisis.
According to The State of Food Security and Nutrition in the World 2022 from the Food and Agriculture Organization of the United Nations (FAO), 828 million people around the world faced hunger last year, a 150 million increase since 2019.
The current food crisis is weakening Southeast Asia’s macroeconomy and threatening people’s livelihood. With more expensive food decreasing the purchasing power of local households, weakened consumer demand will further slow economic recovery in the region.
To climb out of the mire and ensure such problems never emerge again, Southeast Asia’s top priority is to develop self-sufficiency. Indonesia started its national Food Estate project to increase agricultural production and build food security for its growing population. It focuses on improving yields on existing farmland and developing new agricultural lands. The first regulation enacted in October 2020 allowed the government to use millions of hectares of land previously unavailable for food plantations, even including some areas of protected forests.
However, countries must ensure programs are well-designed and executed and free from corruption to guarantee they do not fail, said Stella Kusumawardhani, an economic research lead at Tenggara Strategics.
“Structural problems can’t be solved by large-scale land clearing,” said Bhima Yudhistira, an economist and director of the Center of Economic and Law Studies. Alongside enhancement of domestic farming and production, other indispensable factors for ASEAN include free flow of migrant labor, responsible food policy, and a robust fight against climate change.
But an unrealistic strategy is substantially reducing the region’s reliance on international food supply chains. Instead of food nationalism, international cooperation remains vital to ASEAN’s food security. “In light of the current conflict, it would be good if China could provide alternative wheat and fertilizer imports that ASEAN needs,” Stella suggested.
Over the past 30 years since the establishment of China-ASEAN Dialogue Relations, agricultural cooperation between the two sides has developed by leaps and bounds. Last November, Chinese President Xi Jinping announced several major initiatives to boost bilateral economic cooperation, of which the agricultural sector was a highlight. China has signed more than 30 bilateral agricultural cooperation agreements with ASEAN countries and implemented more than 200 agricultural technology exchange projects.
One of China’s initiatives is to import US$150 billion worth of agricultural products from these countries over the next five years, which, along with additional financial assistance, would support the region by stimulating its agricultural production and increasing the income of ASEAN countries.
Last September, the 5th China-ASEAN Agricultural Cooperation Forum held in Nanning was themed around food security and supply chains. ASEAN countries see innovating agricultural technology to boost production, reducing limits on trade in food products, and developing digital agriculture as highly valuable strategies to mitigate food vulnerabilities. With the signing of Regional Comprehensive Economic Partnership (RCEP) and continuing railway construction, especially the Pan-Asia Railway Network, joint efforts will play a great role in ASEAN’s fight against food insecurity.
The Chinese Ministry of Agriculture and Rural Affairs sent an encouraging signal that China would continue sending experts to ASEAN countries, sharing China’s experience on maintaining food security, and working to build a digital supply chain including a pilot scheme to expedite customs clearance of agricultural products.
Addressing perpetual risks and the present crisis together, ASEAN countries are seeking a comprehensive approach to building resilience against food insecurity.