Food Insecurity Remains High Despite Global Progress

liberalization based on neoliberal principles. Economists argue that for optimal economic growth, neoliberalism advocates for minimal government intervention. The author suggests that the AoA embodies these principles. The AoA agreement consists of three main pillars.

1. Improving market access by reducing agricultural barriers trade in the form of reduction in import tariff barriers and non-tariff barriers;
2. The reduction of export subsidies;
3. Reduction in aid to farmers in the country

According to the author, the implementation of AoA is closely linked to a country's food security situation. The ability of a nation to meet its food security requirements reflects its capacity to maintain an adequate food supply.

Different Application of Agreement on Agriculture

Market Access

The commitment is centered around enhancing trade by implementing tariffs and decreasing agricultural tariffs in a binding manner. The comprehensive tariff approach includes transforming non-tariff barriers into equivalent tariff policies, thereby safeguarding the agriculture sector while maintaining the level of protection. Developing countries have set a target to reduce tariffs by 24%, with particular attention given to addressing non-tariff barriers.

Domestic Help

The policy to decrease subsidies for production or transfer funds to producers can be observed through the subsidy reduction policy. In developing nations, not all subsidy reductions are necessary as they can be categorized into various groups: Green Box, Blue Box, and Amber Box. The Green Box comprises of indirect subsidies that aid agricultural products and have minimal market disturbance. The Blue Box includes direct payment subsidies for farmers intended to restrict production quantities. The Amber

Box encompasses direct subsidies that are regarded as unorganized.

Export Subsidy

The commitment aims to govern government policies and actions related to export subsidies. It entails diminishing the export subsidies on certain commodities, which are exported at their budgetary value. Developing countries are required to lower the duty rate by 24 percent and decrease the volume by 14 percent over a ten-year span.

Food Security Policy Options

Global food trade plays a significant role in enhancing food security as it makes valuable contributions in various ways:

1. Fill the gap between consumption needs with production capabilities;
2. Reduce the volatility of domestic food supply;
3. Increase the growth of economy;
4. Use of world resources become more efficient because of food produced in areas that have a comparative advantage;
5. Enabling global production in the region is more economical to resource

However, the global food trade also poses a risk.

1. The supplied domestic food become uncertain;
2. Food prices are less stable;
3. Destructing exchange of goods in the world market

Soybean Condition in Indonesia Before and After AoA

Before the application of AoA, Indonesia's overseas trade mainly concentrated on import licensing, which proved to be successful in safeguarding agricultural commodities in the country in 1990. More than 1000 commodities were required to obtain an import license. However, after the implementation of AoA in 1996, the number significantly decreased to 200. This

reduction was a result of eliminating non-tariff barriers for WTO bonded commodities.

In Indonesia, like in other developing countries, the actual tariff rates for certain agricultural products are lower than their bound tariff rates. For example, the actual tariffs for rice and sugar are Rp 430/kg and Rp 700/kg respectively, while their bound tariffs are around 30% and 60%. On the other hand, soybean's bound tariff ranges from 27% to 210%, but currently it has no tariff rate. These numbers indicate the bound and applied tariff rates for different agricultural commodities in Indonesia.

According to the table, agricultural products in Indonesia have lower applied tariffs compared to the bound tariff. Developed and other developing countries generally have higher bound tariffs than Indonesia. The average bound tariff for Indonesia is 40%, except for rice, milk, and sugar which have higher tariffs. As a result of these low tariffs, there has been an increase in the importation of agricultural products into Indonesia from other countries.

Approximately half of Indonesia's soybean imports come from Argentina and Brazil, which are developed countries in South America. The United States is the leading exporter of soybeans to Indonesia, accounting for nearly half of the nation's annual imports. As a result, this results in reduced prices for imported agricultural goods.

In 2004, the Indonesian Agriculture Department suggested raising import tariffs on soybeans to 27 percent, which is the maximum allowed by the WTO. However, in order to keep soybean prices low in the market, the government decided to maintain the existing tariff of 0%.

Before the AoA, soybean production in Indonesia had a gradual growth. However, there

was a notable disparity between the quantity of exported and imported soybeans. The accompanying graph presents a visual representation of the export-import volume for soybeans.

Between 1985 and 1994, Indonesia saw a substantial increase in its soybean exports, with an average annual growth rate of 162.048%. At the same time, there was also a rise in imports during this period, with an average yearly increase of 12.6%.

Export and import volume did not experience any significant change after the AoA. While export volume showed a positive trend in the past, it became more unpredictable post-AoA.

The trade volume of soybeans in Indonesia has not seen a significant increase. Between 1995 and 2004, the annual growth rate for soybean exports was 44.22%, while the growth rate for imports was 28.06%. However, the import volume is much higher than the export volume. In 1995, Indonesia imported less than 1 million tons of soybeans, but this number increased to 1.7 million tons in the following year and continued to rise thereafter. Since 2000, soybean imports have consistently exceeded 2 million tons per year.

According to the aforementioned findings, it can be concluded by the author that the Age of Arrival (AoA) has a detrimental effect on the condition of soybeans in Indonesia. The three main negative impacts are as follows:

1. Indonesia became dependent on imported soybeans;
2. Changes in the soybean trade system;
3. Agricultural orientation change

Import Dependency

Low domestic soybean production results in a high degree of import dependency.

Between 1985 and 1990, Indonesia's domestic

soybean production accounted for more than 70%, with an average annual production of 71.19%. However, the country relied on imported soybeans for approximately 30%, with an average dependency rate of 28.81% per year.

The importation of soybeans in Indonesia has been steadily increasing. In 1999, imports made up half of the country's soybean demand. By 2002-2003, this proportion had grown to meet national needs at a rate of 70%. Within a span of 10 years, the average annual dependence on imported soybeans almost doubled, reaching 51.5%.

Conclusion

The implementation of AoA had an impact on Indonesia's agricultural sector, leading to a decline in soybean production due to the government's preference for oil palm plantations and other large-scale agribusiness ventures.

In developing countries, the same phenomenon is observed. The AoA has caused two major shifts in the types of goods being exported by these nations. Firstly, there has been a decline in the export of crops but a rise in the export of non-food crops such as oil palm, rubber, coconut, and coffee. Secondly, there has been an increase in the export of processed food compared to ten years ago. These changes are mainly driven by globalization's need for lifestyle internationalization.

The drawbacks of soybean farming have caused farmers to abandon their farms and switch to other commodities, resulting in a decline in the soybean production system. Additionally, Indonesia's soybean-trading system has become an oligopoly, making it vulnerable to price fluctuations and allowing importers to manipulate prices through supply control.

The government's liberal policies and lack of tariffs have led to the inefficiency of the food policy and soybean

production strategy. By eliminating import tariffs completely, cultivating soybeans as a crop food has become unappealing. Consequently, domestic soybean farming has decreased while imported soybeans have surged.

According to Syukur Nabanan, a member of the Indonesia DPR commission, there are three methods to reduce Indonesia's high dependence on soybean imports: creating a buffer stock, establishing fair pricing, and improving commodity data. The Indonesian government is currently exploring other solutions to decrease reliance on imported soybeans. The author believes that fixing this situation is achievable and wishes the best for Indonesia.