Background of the case
a.
Broad corn seed market
East
Java Province, Indonesia, is a major corn-growing area in Indonesia and has the
biggest number of seed growers/companies and the second biggest distributors in
the country. There are 3.8 million farmer’s households who depend on food crops
including corn. In history, the culture of cultivating corn is embedded in East
Java population and is suitable with the geographical condition.
b.
Hybrid corn seed companies
There
were some multinational companies established in East Java in the beginning of
1980s. Recently, five multinational corn seed companies: Monsanto, BISI,
Pioneer (Dupont Indonesia), Syngenta Thailand, and Asian Hybrid Seed
Technologies of the Phillipines located in East Java are broadly operated.
Their practices in seed market can be considered as oligopoly (a
market form in which a market or industry is dominated by a small number of
sellers [oligopolists]). It is because they can sell higher selling prices than
local companies/producers with good packages and labels, but their products are
dominated seed market so they can get high profits.
c.
Companies and farmers
cooperation in seed production
Companies
did not have sufficient farmland so they made contracts with corn seed farmers.
This kind of cooperation was begun in the beginning of 1980s when the Five
Farming Efforts System was implemented by Indonesian Ministry of Agriculture
following the Green Revolution’s concept. The system emphasized mainly on the use
of high quality hybrid seed to increase plant production so as to intensify
land use.
d.
Farmers skilled in cross
breeding techniques
After
some years of cooperation in seed production, hundreds of farmers skilled in
corn breeding. They master cross breeding using multiple varieties of corn that
they learn whether from their contact with the company in many ways (cultivating
parent seeds, cross breeding, marketing, extension and training) or their
acquired knowledge from generation to generation. Afterward,
the successfulness of producing corn seed profitably at that moment has
attracted many farmers to learn and develop corn seed production.
e.
Thousands of farmers are corn
seed producers
After
a while, more and more people went into corn trade. Thousands of people
suspected to pursue this business including farmers who produce seeds on their
own. This was triggered by rising corn demand in the market significantly. An
organization of corn seed farmers and traders, Bina Tani Makmur, was founded in
Kediri Regency, East Java in 2002 with at least 100 members from Kediri and its
surrounding.
Seed farmer’s cases
a.
Farmers no longer cooperate
with the company
The
cases distinctively occurred in the context of cooperation between BISI Company
from Kediri Regency and a number of farmers from surrounding areas. The
contracts did not last longer in most cases. The reason is that the farmers
were not satisfied with the cooperation from the losses they suffered.
Consequently, in several cases the seeds produced by farmers within the
cooperation were not purchased by the company due to low quality from the company’s
view. This incident has made the seeds from the company spread over various
places, including market and farmer’s society. Then farmers use the seeds to
cross breeding so as to produce high quality seeds.
b.
Company’s monopoly
The
contract letter itself was unclear for the farmers and founded some illegal
statements that made the incident possible to happen. From the production cost
analysis in 2006, the company got much higher profit than farmers. Moreover, the
company sold the corn seed for 26,000 to 37,000 rupiahs per kilograms in the
market, while farmers should sell their corn to the company in the context of
cooperation only for 1,200 rupiahs per kilograms. These differences indicate
that farmers were monopolized and oppressed by BISI Company and this still last
up till now.
c.
Farmers developed techniques of
cross breeding with various seeds
Without
being able to control by the company and the government and supported by
extensive seed market, farmer’s skill to perform cross breeding is broadly developed
in the society. Driven by high demand and their desire to produce more
profitable seed, farmers creatively learn how to breed various kinds of corn
seed without being aware of legal status of the seeds and the existing law.
Because many farmers do the same practices for years, they consider that there
is nothing wrong on what they are doing.
d.
Farmers price competitive
In
fact, from the production cost analysis it does not spend a lot of money to
produce corn seeds. Farmers see this opportunity to sell the seeds at lower
price than the company’s while keeping good quality by breeding in many more
creative ways. This business has been able to support hundreds of smallholders
and families at least for 20 years. Bina Tani Makmur as a leading organization
on corn production has kept on improving breeding techniques and sharing market
information among its members.
e.
Farmers went to court
From 2004 to 2010, some farmers sued by BISI Company. They were 13
corn-seed farmers from 5 regencies found guilty after undergoing legal
processes in the court: 4 of them sent to jail, 2 farmers experienced twice, but
only 3 farmers accompanied by lawyers due to lack of money and information.
Besides, one farmer won in a legal proceeding. The accusations fixed farmers to
the violation of Act 12 of 1992 on Plant Cultivation System for doing seed cultivation
and certification without permission, Act 14 of 2001 on Consumer Protection for
selling seeds without labels, and Act 29 of 2000 on Plant Variety Protection
(PVP) for producing hybrid corn seeds without permission.
f.
Irregularities in legal
proceedings
Some lawyers and NGO’s activists have assisted some farmers to deal
with the legal proceeding intensively. They found several irregularities during
the litigation, such as one-day completed proceedings, bids money, non-viable
evidence, no summons or arrest inspection, not receiving a decision letter, no
laboratory test for evidence of plant varieties, and no PVP right for the company’s
seeds. The two last facts show that there is no patent on seed by the company
because the company could not prove that the seed varieties belong to them. It
means that farmers can take the liberty to use any varieties of seeds in corn
breeding.
g.
Challenges to support farmer’s
cases
Actions to fight for farmer’s interests meet some challenges from
different parties. First, seed subsidy program by the National Government is
favorable for the company since it uses company’s seeds. Second, intimidations
to farmers by individual police or hoodlum using the incomplete laws are
continued especially for small farmers who do not fully understand the law.
Third, the farmers still find it difficult to follow certification process as
it is so complicated and very expensive; furthermore, the conflicting
regulations have also made them confused. Fourth, the company still offers cooperation
although that is usually detrimental for farmers but they have to accept it for
running their farms. Finally, in the National Corn Council and the Corn
Agribusiness Community who can influence strongly on regulations and policy
related to corn production and market there is no representation from farmer
organization in community level; instead, they are dominated by big business
actors.
