Side Views

Strategic land investment could lead to healthy returns - Charles Tan Meng Yeah

As many observers have pointed out, the haze is a perennial problem in need of a longer-term solution. The key issue, it seems to me, is one of economics.

To the average Indonesian farmer, it simply makes financial sense to slash and burn because that is how he can most efficiently clear the land for crop planting.

There are externalities that result, of course — costs imposed on those other than him — but with no immediate consequences for his actions, and more pressing concerns to address (such as providing for his family), one can understand why this goes on year after year despite the well-publicised effects it has on neighbouring countries such as ours.

While the remarks from Indonesian minister Agung Laksono were insensitive and undiplomatic, Prime Minister Lee Hsien Loong is right to urge calm and seek cooperation rather than agitating for a response from Jakarta. Mr Laksono’s flippant comments about the culpability of Singaporean-owned palm oil producers may or may not ring true, but we are all indirectly complicit in these activities through our ever-growing demand for cheaper food, which, I’ve come to believe, like most things in life can only be achieved by cutting corners and/or imposing costs on others.

In order for any solution to work now — and more importantly, continue working over the long term — there needs to be mutual engagement and any policies undertaken must be “win-win” for all involved.

Proposed actions such as cloud seeding help alleviate the symptoms, but are unilateral in nature and do not address the root of the problem. A more lasting, and perhaps appropriate, response to the haze issue would be to directly invest a few hundred million dollars — rather than donating a couple of million dollars in aid — in acquiring strategic plots of land from the thousands of farmers and turning them into sustainable farming cooperatives and surveillance outposts.

I suspect the Singaporean and Malaysian governments, as investors, could make a healthy return on their investment selling premium produce to consumers who support such environmental causes and from the expected appreciation in the capital value of the land. The Indonesian farmers, rather than being displaced, could also make a decent, stable, living wage as employees and stakeholders in these cooperatives — serving not just as farmers but enforcers as well, ensuring that their neighbours comply with the no-burning legislation.

The millions spent on this ambitious project would easily be outweighed by the billions recovered from lost GDP (consider the haze’s negative impact on tourism, productivity, consumption, etc). -, June 22, 2013.



