A Critique of ADB’S Role in Food (IN)Security: Proposals for Increasing Investments on Small Farmers

Concept Paper on Forum

The occasion of an ADB-sponsored Forum addressing the challenges of food security in the Asia-Pacific region in light of the recent and ongoing crisis in global agriculture, on July 5-7, 2010, should be one of promise to specialists in the field who have long complained of the neglect of agriculture by governments and international financial institutions (IFIs). Will this Forum bolster investments in food security within the framework of sustainable, pro-poor agricultural policies in the region and correct the misguided priorities on export-oriented agriculture production and focus on market solutions? The evidence thus far suggests not. Despite the spectacular failure of rampant, unregulated free markets and their contribution to the world’s biggest financial crisis since the Great Depression, the ADB’s focus continues to be on the privatization of water and electricity resources, the promotion of big dams, and opening the door to multinational corporations, to the detriment of the Asian farmer.

The major gains in agricultural productivity in many Asian countries during the ‘60s and ‘70s were premised on public sector investment in irrigation facilities and inputs such as high-yielding rice varieties. Strong focus was put on agricultural research facilities working for the public good and not in the pursuit of profit. This relationship has since faltered under the sweep of structural adjustment programs (SAPs) advocated by the World Bank and the ADB.

More recently, the ‘Water for All’ policy of the ADB advocates ‘cost recovery in irrigation services,’ ‘private sector participation in the development and management of water resources and assets,’ and ‘autonomous and accountable service providers’ in the delivery of water services. These concepts embody the institution’s thrust of promoting privatization and corporatization of goods that rightly belong to the public domain, which ultimately harms farmers more than any other segment of the population. ADB’s loans and projects in water and irrigation have increasingly transferred the tasks of government in maintaining and operating irrigation systems to poor farmers already burdened by low farmgate prices and rising costs of production.

Examples of these kinds of projects in Indonesia and the Philippines include the Southern Philippines Irrigation Sector (SPIS) project, financed through a $600 million loan from the ADB, and the 2003 Participatory Irrigation Sector Project in Indonesia. In both projects, the interests of small-scale farmers and local communities are excluded when it comes to competing water usage due to their relative lack of bargaining power compared to local elites and big companies.

With 65% of lending (plus the numerous examples of public-private partnerships), the bank’s recent emphasis has been on large projects in the power and infrastructure area. Recent projects that have been funded by the bank include the 1,100-MW Nam Theun 2 (NT2) project in Laos and the Laiban Dam in the Philippines. The rush towards big dams has been eviscerated time and time again for the large numbers of displaced people they create, who are often indigenous people in remote areas which is where the remaining free-running rivers are, their dubious environmental benefits, and most importantly, their flooding of thousands of hectares of agricultural land in a region that can ill-afford to lose such amounts. This focus contradicts the bank’s own recognition that one constraint to achieving sustainable food security is “in relation to growing land and water shortages.”

The privatization of water and electricity pursues an agenda even further removed from the needs of ensuring stable supplies for achieving food security. Electricity privatization has proven itself a charade in the Philippines – an agenda pursued by the ADB in its support for the Electric Power Industry Reform Act (EPIRA), which mandated the full privatization of the electric power industry in the country. This is highlighted by the recent controversy over the Angat Dam hydroelectric plant privatization, whose upstream location from a drinking water source for Manila and an irrigation source will put an enormous amount of leverage in private hands.

Similarly, the ADB’s effort at addressing the persistent problems surrounding agriculture in the Philippines through the Agrarian Reform Communities Project (ARCP), which was approved in 1998 has emphasized the division of the regions into agricultural zones that promotes export crop production over food for local consumption. While land reform factors highly in the project, a solely economic grasp of land issues ignores the political ground that has been gained by agrarian struggles over the last 20 years.

This then puts into serious question current initiatives of the ADB at the regional level to promote greater investments in food security, given evidences, so far that point to its increasing role and culpability in reshaping agriculture and food policies at country level that have undermined food sovereignty of client countries and communities.

In light of this planned ADB-FAO-IFAD forum on investments, where the voices of poor farmers may not be amplified, there is a need for civil society organizations and farmers movements in the region to come together to present their views and perspectives on what relevant investments and policies are urgently needed by smallholders and landless peasants if the long-running problems of land tenure and ownership, rural poverty, and hunger are to be addressed effectively.

Towards this, the Asia-Pacific Network for Food Sovereignty, Freedom from Debt Coalition and the Focus on the Global South propose holding a round-table discussion on June 6, from 8:30 am -12:30 pm to clarify the role of the ADB in fostering the current crisis in food and agriculture, gather lessons from the implementation of ADB policies and projects as they impact on food security in the region and understand how its investment framework may further exacerbate the food crisis and intensify landgrabbing in the region. The forum will also discuss ways and approaches to promote investments in agriculture and food security that will meet the needs and constraints faced by small farmers and landless agriculture workers in the region, particularly poor rural women.