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As Indonesians tuck into their Idul Fitri feasts at the end of Ramadhan, a few may ponder the issue of food prices. Many will be grateful that their economic position allows them to enjoy their traditional dishes of ayam opor, sambal ati, gulai and the symbol of the holiday, ketupat, or rice cakes.

Most people are aware that rice prices have been steadily increasing. In 2006, the average price per kilogram was Rp 4,360 per kilogram. Today that same kilogram costs Rp 6,263.

Some people may wonder whether their indulgence is sustainable. The government insists that this year’s rice crop will outstrip demand — largely due to the ability to plant additional crops in areas where there has been more rain than usual.

In Bali, according to regular visitors, an almost unprecedented fourth crop is being planted.

Throughout the country, Ministry of Agriculture data show that a total of 13.45 million hectares have been planted on a single crop basis, up from 12.3 million hectares through the end of July.

Production grew 3.08 percent compared with last year — already well above demand — while the population increased by 1.34 percent.

The government is predicting a crop of 65.2 million tons this year, up from 64.4 million last year and sharply up from 54.5 million in 2006.

These statistics were provided by Kompas newspaper, which in the past week has been warning of the threat of rice shortages.

The paper wrote that not everyone believes that rising production will result in guaranteed food security in Indonesia over the short term.

Bustanul Arifin, an economist from the University of Lampung, has consistently warned that overconfidence could prove fatal.

In an interview with the daily, he pointed to Russia and Turkey’s recent ban on wheat exports, and moves by major exporters Thailand and Vietnam to ban rice exports.

China, he said, is importing large quantities of rice to make up for shortfalls caused by natural disasters.

Indonesia, despite good harvests over the past two years, could be affected by the tightening regional picture, further bad weather and attacks by pests.

At the very least, it is unlikely that Indonesian rice would be smuggled out of the country to relieve possible shortages elsewhere.

The price of rice in Indonesia, at about $567 per ton, makes it unlikely it would have much appeal in Thailand, where it sells for $415-$435, or in Vietnam, where the price is $360-$385.

In any country, shortages of the basic staple represent the single largest threat to stability.

On balance, there does not appear to be much danger of shortages in Indonesia this year, with the State Logistics Agency (Bulog) insisting that it has 1.4 million tons in reserve.

Even if much of Bulog’s stock is in poor condition, which is often the case, the buffer would be enough to make sure everybody can buy rice of some sort.

The current high prices are being blamed by the government on speculators, and analysts note that if prices remain high after the Idul Fitri holiday, it will be a sign that there are basic structural problems.

Unwieldy distribution systems, for instance, contribute to high prices, and speculation could worsen.

It is not necessary to look too far to find the security implications of high food prices.

Bangladeshi garment workers have greeted an 80 percent pay increase by rampaging angrily through the capital of Dhaka, burning cars and looting shops.

The increase — the first in four years — took their pay from $23 to $43 a month but still left them as the world’s lowest-paid garment workers.

The workers had demanded minimum wages of $75 a month, arguing that the raise did not provide for the survival of workers and their families, a complaint echoed recently in Indonesia when electricity rates were increased by 15 percent.

The Financial Times noted, incidentally, that the case of Bangladesh mirrors that of many formerly low-cost labor markets.

In Cambodia, the minimum wage was raised by 21 percent — from $50 a month to $61, which was still below the demands of the unions.

In Vietnam, there were 200 recorded strikes last year by workers who were hit by inflation of 9 percent. The situation in Bangladesh was exacerbated by a 31 percent increase in food prices over the past four years.

Food prices are just one issue. A longer-term problem is whether there will be enough of it.

Early 19th century scholar Thomas Malthus predicted that the world would run out of enough food to feed all people and that famine or disease would lead to countries reverting to subsistence economies.

Such a disaster has yet to transpire, but the world’s population continues to grow.

Yet while some dismiss Malthus’s theory as failing to appreciate the ability of man t o develop new ways to provide more food, others remain concerned that population pressures still remain a threat.

In 1972, global research organization The Club of Rome published “Limits to Growth,” which predicted that resources would start to run out in the 21st century and then collapse. Today, climate change has provided a new impetus to the pessimists .

The Economist, which recently looked at the Brazilian experience, notes that increasing wealth in what used to be the Third World is creating demand for First World nutrition standards and tastes.

“Between now and 2050 the world’s population will rise from seven billion to nine billion,” it wrote.

“Its income is likely to rise by more than that and the total urban population will roughly double, changing diets as well as overall demand because city dwellers tend to eat more meat.”

It notes that the Food and Agriculture Organization predicts that grain output will have to rise by about 50 percent and meat production will need to double by 2050. Yet growth in agricultural productivity has stalled and water resources are already strained.

The Economist says however that the experience of Brazil, which is turning its huge formerly unproductive savannah region, the Cerrado , into a rich agricultural area, is a positive counter to the doomsayers.

While the magazine implicitly rejects the Malthusian arguments, it also states that the United States has more than double the amount of land currently used for agriculture available for expansion, that Russia is in the same position, and that Australia could triple the area it now uses. (This last claim might sound odd to farmers in Western Australia who gambled on the continuation of above-normal rainfall patterns and made huge investments in expanding wheat growing areas, only to find the rains disappear.)

All of these points may have led to President Susilo Bambang Yudhoyono’s appeal in early August to regional governments to cooperate on a contingency plan to anticipate food shortages.

He pointed to extreme weather conditions as the likely cause of such shortages, but increased demand will almost certainly be another factor.

Commenting on the discussion at a meeting of the Democratic Party, Deputy Agriculture Minister Bayu Krisnamurthi noted that research from the US-based National Academy of Sciences shows that rising temperatures in six rice-producing Asian countries, including Indonesia, may lead to reduced food supplies.

Increasing temperatures are expected to reduce rice production within the next four to five years, Bayu said, adding that while the effects may not be as dramatic as the recent fires in Russia and the floods in Pakistan, “we must still take anticipatory steps to maintain farm productivity.”

At the least, its reassuring to know that the government is aware of the problem.

 
Keith Loveard is a security analyst at Jakarta-based Concord Consulting.