WORLD TRADE
ORGANIZATIONG/AG/NG/W/71
30 November 2000
(00-5188)
Committee on Agriculture
Special SessionOriginal:  English
FOURTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
15-17 NOVEMBER 2000
Statement by Indonesia
Non-Trade Concerns   (G/AG/NG/W/36)1. My delegation would like to extend its appreciation to a number of countries which have
submitted papers containing various issues on non-trade concerns.  We believe that the paper willcontribute positively to further discussions on these issues.
2. As mentioned earlier by previous speakers, the Preamble and Article 20 of the Agreement on
Agriculture specifically highlight the need for Members to take into account non-trade concerns, such
as food security and rural development, in the negotiations for continuing reform process.  We mustrespect our agreement on these matters.
Food Security
3. Like any other country in the world, the issue of food security will always be one of a non-
trade concern for Indonesia and I would like to dwell on this issue for a while.
4. Let me share with all of you Indonesia's concept of food security. In Indonesia's view, food
security does not only mean accessibility and availability of supply of foodstuffs, but also ability to
produce our own food needs.
5. Some Members may argue that there is no need for a country to make an effort to produce its
own food needs if it is cheaper just to import.  They believe that food security could be achieved
through trade liberalization by merely opening the market for imports.
6. Although the theory may be applicable to other countries, it is simply not applicable to the
condition and situation in my country.  Indonesia does not believe that its food security objectives canbe achieved through imports alone.  In our view, imports of food items can contribute to food security
through making up the difference between domestic production and consumption needs.
7. Under ordinary circumstances many countries may be able to rely entirely on world markets
for their food supplies because theoretically global food supplies are more than ample to meeteveryone's needs.  However, for various reasons, Indonesia cannot afford to be solely dependent on
imports of basic food needs:  First, being a country with more than 210 million people to feed, it is not
sensible for Indonesia to rely solely on food supply from imports.  Let me explain why.  Indonesia's
main staple food is rice.  According to the data in 1998 the world traded rice was approximately
20 billion metric tons, while Indonesia's domestic rice need in the same year was more than 30 billion
metric tons.  It is very clear that internationally traded rice was not enough to meet Indonesia's
demand.  Second, like many developing countries, Indonesia has limited foreign exchange reserve toG/AG/NG/W/71
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import foodstuffs.  In a situation where foreign exchange reserve is not enough, the supply of
foodstuffs from imports may be disrupted.  Third, what will happen if due to political crises such as
war or trade embargoes, the exporting countries discontinue their exports to Indonesia?  These are
among the reasons why Indonesia must be self-reliant in foodstuffs, in particular rice.
8. Having said this, I would like to state my delegation's position that although we remain
committed to further trade liberalization for agricultural products, my delegation is of the position that
policies adopted for legitimate food security purposes should not be restricted by the WTO rules.
Developing countries must be allowed to have greater flexibility for furthering food security.  The
flexibility should be reflected in any future negoti ations and agreements in the area of market access,
domestic support and export competition.
Rural development and employment
9. Another non-trade concern of importance to Indonesia is rural development and employment.
As in many countries, the agricultural sector lies at the centre of Indonesia's economy and has made a
number of major and interrelated contributions to the process of socio-economic development in ourcountry.  First , the sector contributes to the GDP and provides productive employment opportunities
and income for the bulk of the population, especially the rural population.  When the development
process started in the late 1960's, two-thirds of the labour force in Indonesia worked in agriculture and
the agricultural sector generated more than 40 per cent of the GDP. Between 1985 and 1992, the
labour force absorbed by the agricultural sector has increased from 34 million workers in 1985 to42 million workers in 1992.  In 1998, employment in the agricultural sector was more than 36 million
people or about 46 per cent of the total labour force. During the economic crisis, a massive increase in
unemployment was prevented, largely by the ability of the agricultural sector to absorb workers laid
off from non-agricultural sectors.  Second , since employment in agriculture has fallen much more
slowly than in the non-agricultural sector, this sector merits even more intense attention to increaselabour productivity and income for further poverty alleviation and food security.  The sector plays a
crucial role in eradicating poverty through a structure and pattern of production that allow small
farmers and landless agricultural workers to share in benefits of agricultural growth.  The sector also
contributes to the achievement of food security for the rural people because generation of rural
income will increase the capacity of the rural population to access sufficient and appropriate food.
Third , the sector plays an important role in improving balance of payment through increased foreign
exchange earnings and saving, as well as reduced dependence on the economy on foreign sources.
10. Against this background, it is important for Indonesia to adopt policies aimed at preserving
the viability of rural employment and development in order to protect the livelihood of more than
125 million farmers and their families from adverse affects of trade liberalization in agriculture. It is
therefore, in our view, that the WTO Agreement on Agriculture should contain specific provisions to
allow measures applied by developing countries to encourage agricultural and rural development in
order to eradicate poverty.
Market Access   (G/AG/NG/W/54)
1. Indonesia fully associates itself with the Negotiating Proposal on Market Access submitted by
the Cairns Group. It also subscribes to the statement made by Malaysia on behalf of the ASEAN
Members of the Cairns Group.  However, I would like to supplement the statement concerning some
issues.
2. Like in other WTO Agreements, my delegation is of the position that S&D treatment in the
Agreement on Agriculture should be preserved and if necessary be strengthened and adapted to theG/AG/NG/W/71
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realities and development needs of developing countries, including the least developed and net food-
importing countries.
3. It is pertinent to note that considering the present S&D provisions in the existing Agreement
on Agriculture are far from satisfactory, the Cairns Group proposal includes modifications into a moreeffective and real S&D treatment.  In Indonesia's view, the basic purpose of S&D provisions in the
Agreement is not only to provide transitional period for developing countries.  The S&D treatment
shall also aim at addressing the fundamental problems of development and growth in these countries.
The S&D provisions are also necessary to address the unlevelled playing field, as most farmers of the
developing countries are economically weak compared to farmers of the developed countries.
4. For the sake of achieving even and equitable benefits of the Agreement on Agriculture, the
situation of small-scale and subsistence farmers, which constitute the majority of the farmers in
developing countries, should be fully taken into consideration in the coming market access
negotiations.
5. The developing countries will need flexibility to ensure that their small farmers can continue
to make a livelihood out of agriculture while adjusting to trade liberalization.  In this regard,
differential modalities of developing countries are needed, such as:  (i) lower level of reduction
commitments as well as more flexible implementation timetables;  (ii) preservation of special
safeguard mechanism for developing countries, whether or not they have taken recourse to
tariffication during the Uruguay Round.  With the removal of non-tariff barriers in the developingcountries, small farmers are exposed to the risk of import surges, which could harm their production
capacity.  A normal safety course would have been through the safeguard mechanism of the GATT
1994, but injury may be technically difficult to be demonstrated  in such dispersed production as
agriculture.  Hence this course may not be practical.  Indonesia is therefore of the position that while
the SSG for developed countries should be eliminated, it is necessary for developing countries at leastto have the possibility of using special mechanism to safeguard their domestic production;  (iii)
measures for the protection of small and subsistence farmers as well as for the achievement of food
security should be excluded from the discipline on market access of the Agreement on Agriculture.
6. If developing countries are to reap  the potential gains from trade liberalization in agriculture
they should be allowed to increase their agricultural exports.  Although there have been some
improvements in market access opportunities for developing countries which resulted in the previousagricultural market access negotiations, market access problems remain in many areas.  For example,
tariffication and the manner in which tariffs were reduced have resulted in high bound tariffs in the
agricultural sectors of many developed countries.  In addition, tariff escalation imposed by developed
countries discourages processing industries in developing countries.  Also, many developing
countries' exporters are encountering additional difficulties in the SPS and TBT areas.  Tradeharassment through arbitrary use of such measures tends to be growing.
7. Another problem encountered by exports from developing countries is the frequent use of
specific rates or other non- ad valorem  rates by certain developed countries.  Non- ad valorem  rates
pose certain problems to the transparency of degree of protection, because the use of non- ad valorem
rates conceals the actual prohibitiveness of such rates in terms of ad valorem  equivalent.  Generally,
the degree of protection of such rates depends on the size of a unit import price.  Hence, a specific rate
poses a higher barrier to cheaper imports, which undermines the competitiveness of exports from
developing countries.
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