In a first joint report on finance for nature in the G20 countries, they estimated that spending by the bloc — which includes large emerging economies — was US$120 billion in 2020.

Co-author Ivo Mulder, who heads the climate finance unit at the United Nations Environment Program (UNEP), said the report’s focus on the G20 and nature funding gaps could help those rich nations that have shown political leadership on the issue in recent months, including at the COP26 climate summit.

“The amount of money being invested in nature-based solutions is not nearly enough,” Mulder told the Thomson Reuters Foundation. “I would hope that G20 countries can lead by example and they’re not doing that at the moment.”

The report looked at how wealthy nations can better tackle the planet’s climate, biodiversity and land degradation crises, such as by promoting sustainable farming and supply chains, or creating green spaces in cities to tackle rising heat.

Stepping up protection for natural areas, such as parks, oceans, forests and wildernesses, is seen as vital to maintaining the ecosystems on which humans depend, and to limiting global warming to internationally agreed targets.

Dozens of countries pledged to do more to conserve nature and make farming greener at November’s COP26 UN climate talks, including a commitment by more than 100 nations to halt and reverse deforestation by 2030.

Last year, a UN report said global funding for nature conservation needed to triple this decade to about US$350 billion a year by 2030 and rise to more than US$536 billion by 2050.

The new study said the spending gap was larger and more difficult to bridge outside the G20 group of countries — not helped by the fact that only two per cent of the G20’s US$120-billion investment in 2020 was directed towards overseas aid.

Funding from G20 nations represented 92 per cent of all global investment in nature, the report found, with the vast majority of this government money — 87 per cent, or US$105 billion — allocated to programs inside their own borders, the report said.

Finance from the private sector also remains small at 11 per cent of the G20 total, or US$14 billion a year, even though it contributes about 60 per cent of gross domestic product in most G20 countries.

The report’s authors called on the G20 to grab opportunities to boost their international investment in things like restoring degraded land and ecosystems, which can often be cheaper and more efficient than similar nature-based projects at home.

The report also noted that more than US$14.6 trillion was spent by 50 leading economies in 2020 to recover from the COVID-19 pandemic, of which only US$368 billion, or two per cent, was considered “green.”

Governments need to “build back better” instead of following normal spending patterns after the COVID-19 crisis, it added.

Mulder said the report’s findings could help governments implement their COP26 pledges and push forward with efforts to finalize a new global pact to halt and reverse biodiversity loss in Kunming, China, later this year.

Companies and financial institutions should fully disclose climate- and nature-related financial risks, he added, while governments should repurpose agricultural subsidies that harm nature, introduce trade-related tariffs on similarly damaging goods, and set a floor for forest carbon prices.

“The climate and nature crisis are two sides of the same coin,” said Justin Adams, director for nature-based solutions at the World Economic Forum, which co-led the report.

“We can’t turn things around unless we transform our economic models and market systems to take nature’s full value into account,” he said in a statement.

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Earlier this year, Indonesia entered talks to resume poultry shipments to Japan after a 10-year stoppage, with any agreement likely to be worth an estimated initial $200 million per year (all figures US$). These government discussions followed soon after a food safety scandal involving Chinese meat suppliers.

Cargill, which already has a presence in Indonesian palm oil, cocoa and animal feed sectors, sees great potential in the country’s poultry industry.

“Japan is looking closely at Indonesian chicken and part of it is to replace volume that has fallen off from China through various industry issues that China has had,” Cargill CEO David MacLennan told reporters during a roundtable discussion.

“That is a good place for us to play in Indonesia.”

Poultry demand in Indonesia, the world’s fourth most populous nation, is also growing due to more affluent Indonesians turning away from rice, once the staple diet, towards more bread and meat-based foods.

MacLennan, who met with the new Indonesian President Joko Widodo and other senior government officials on Monday, said part of the future investment in Indonesia would be aimed at expanding Cargill’s palm business in the country.

The firm owns palm oil plantations covering about 40,000 hectares in Indonesia, the top producer of the edible oil.

Cargill has already invested about $700 million in the country over the past four years, the chief executive said. He was speaking to reporters ahead of the official opening of Cargill’s cocoa processing plant in East Java later this week.

Cocoa processing capacity in Indonesia, the world’s third-largest cocoa producer, is rising as new facilities are being built by multinational companies such as Olam International Ltd and top chocolate maker Barry Callebaut.

Cargill has invested $100 million in its cocoa processing plant, which has an initial capacity of 70,000 tonnes.

“It’s early days,” MacLennan said when asked if there is scope to increase capacity at its cocoa processing plant. “Given the demographics of the country, changing trends in chocolate consumption in Asia… I would be optimistic about it.”

— Michael Taylor is Reuters’ senior correspondent for Indonesia, based in Jakarta.

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As Indonesia struggles to meet rising demand from an increasingly affluent population of 240 million, it is now the world’s top importer of sugar, Asia’s largest buyer of wheat, and imports about two million tonnes of rice and corn each year.

A copy of the law seen by Reuters, which is due to be signed off by the president by the end of 2012, shows that it covers areas such as food safety and the stocks, trade, purchase, prices, distribution and consumption of unspecified staples.

“In the new law we stress food sovereignty and autonomy,” said Achmad Suryana, head of the Food Security Agency at the country’s Agriculture Ministry, adding that it gave priority to securing adequate food supplies from domestic sources.

“So, food import would be secondary or even the last resort,” he said.

Consolidating many existing curbs on food items, such as import limits and tariffs to protect domestic farmers, the new law provides for the new body to be created within three years.

It will aim to help the government achieve self-sufficiency in staple foods such as rice, soybeans, sugar, beef and corn.

The new law puts domestic output and demand and the control of imports and exports at the heart of its efforts, which will finalize the expanded role of state procurement agency Bulog into the “super body.”

Global agribusinesses called for greater clarity on the details of the new food body, since its objectives can be interpreted in different ways and are opaque.

Greater restrictions feared

Critics say the new law could lead to more limits and trading curbs on the free flow of farm commodities, hinder overseas firms looking to invest to supply growing demand in the archipelago and ultimately, hurt the poorest consumers.

“It is a misguided pursuit of autarky in agriculture which misses vast opportunities for efficiency and competitiveness in the sector,” said independent analyst Kevin O’Rourke.

“I’ve read that the idea is to incorporate two, three or maybe four bodies into this new super body,” he added. “Everything depends on how the president interprets the law and guides the new food agency.”

The law could also hinder food-processing industries, which have been promoted in Indonesia in recent years, he added, as they scramble for access to the cheapest raw materials.

The new law also prohibits “hoarding or storing staple food,” a clause that may create greater risk and uncertainty for commodity traders who stockpile, traders and analysts said.

Agriculture contributes around 15 per cent to the GDP of Indonesia, Southeast Asia’s largest economy, employing about 42 million people of a growing population of roughly 240 million.

As wealth levels rise and consumer tastes change and grow, Indonesia has attempted to vary its food basket beyond rice, while expanding and boosting yields in its homegrown commodities with limited success.

The law is one of a series of policy announcements this year, such as that on mining, which analysts say are linked to increasing economic nationalism ahead of Indonesia’s presidential elections in 2014.

“The new food law provides vast scope for state involvement throughout the agricultural sector,” said O’Rourke. “It aims to ensure adequate supplies of affordable food, but by pursuing this through autarky, it risks accomplishing the opposite. You can have autarky or affordability, but you can’t have both.”

Bulog to grow

After the worst U.S. drought in 56 years drove global prices of soybean and corn to all-time highs this year, Indonesia said it would extend the role of Bulog beyond rice to build bigger stockpiles of beef, corn, sugar and soybean.

Bulog’s current role is to maintain rice supplies and stocks of between 1.5 million and two million tonnes, but its wider remit could see it protect domestic farmers by setting minimum prices, while consumers would benefit from a maximum price ceiling.

The government, which is considering a wheat flour import tariff to protect domestic mills, also had its food policies criticized last month in a report by the OECD grouping of the world’s top economies.

Just under 19 per cent of the $780 million in Canadian exports to Indonesia in 2011 were cereals.

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As Indonesia struggles to meet rising demand from an increasingly affluent population of 240 million, it is now the world’s top importer of sugar, Asia’s largest buyer of wheat, and imports about two million tonnes of rice and corn each year.

A copy of the law seen by Reuters, which is due to be signed off by the president by the end of 2012, shows that it covers areas such as food safety and the stocks, trade, purchase, prices, distribution and consumption of unspecified staples.

"In the new law we stress food sovereignty and autonomy," said Achmad Suryana, head of the Food Security Agency at the country’s agriculture ministry, adding that it gave priority to securing adequate food supplies from domestic sources.

"So, food import would be secondary or even the last resort," he said.

Consolidating many existing curbs on food items, such as import limits and tariffs to protect domestic farmers, the new law provides for the new body to be created within three years.

It will aim to help the government achieve self-sufficiency in staple foods such as rice, soybeans, sugar, beef and corn.

The new law puts domestic output and demand and the control of imports and exports at the heart of its efforts, which will finalize the expanded role of the state procurement agency, Bulog, into the "super body."

As with recent changes to the country’s mining laws, however, the framework of the food law leaves many details to be filled in or drafted later, making unclear its precise impact on business practices.

Global agribusinesses called for greater clarity on the details of the new food body, since its objectives can be interpreted in different ways and are opaque.

Greater restrictions feared

Critics say the new law could lead to more limits and trading curbs on the free flow of farm commodities, hinder overseas firms looking to invest to supply growing demand in the archipelago and ultimately, hurt the poorest consumers.

"It is a misguided pursuit of autarky (self-sufficiency) in agriculture which misses vast opportunities for efficiency and competitiveness in the sector," said independent analyst Kevin O’Rourke.

"I’ve read that the idea is to incorporate two, three of maybe four bodies into this new super body," he added. "Everything depends on how the president interprets the law and guides the new food agency."

The law could also hinder food processing industries, which have been promoted in Indonesia in recent years, he added, as they scramble for access to the cheapest raw materials.

Major food importers include U.S. giant Cargill for soybeans and Singapore’s Wilmar for sugar.

The new law also prohibits "hoarding or storing staple food," a clause that may create greater risk and uncertainty for commodity traders who stockpile, traders and analysts said.

Agriculture contributes around 15 per cent to the GDP of Indonesia, Southeast Asia’s largest economy, employing about 42 million people of a growing population of roughly 240 million.

As wealth levels rise and consumer tastes change and grows, Indonesia has attempted to vary its food basket beyond rice, while expanding and boosting yields in its home-grown commodities with limited success.

The law is one of a series of policy announcements this year, such as that on mining, which analysts say are linked to increasing economic nationalism ahead of Indonesia’s presidential elections in 2014.

"The new food law provides vast scope for state involvement throughout the agricultural sector," said O’Rourke. "It aims to ensure adequate supplies of affordable food, but by pursuing this through autarky, it risks accomplishing the opposite. You can have autarky or affordability, but you can’t have both."

Bulog to grow

After the worst U.S. drought in 56 years drove global prices of soybean and corn to all-time highs this year, Indonesia said it would extend the role of Bulog beyond rice to build bigger stockpiles of beef, corn, sugar and soybean.

Last month, Bulog sounded out U.S. government officials about securing soybean imports.

Bulog’s current role is to maintain rice supplies and stocks of between 1.5 million and two million tonnes, but its wider remit could see it protect domestic farmers by setting minimum prices, while consumers would benefit from a maximum price ceiling.

Although Indonesia sets import curbs and tariffs on commodities, it often scraps them when global prices spike.

In the past year, food producers have protested against soybean and corn import taxes, while farmers demonstrated against plans to import more sugar. Beef prices doubled because of cuts to import quotas.

The government, which is considering a wheat flour import tariff to protect domestic mills, also had its food policies criticized last month in a report by the OECD grouping of the world’s top economies.

"The moment you start having entities that control what can be imported and exported in what amounts, you drive up food inflation," said an executive at a major international agriculture firm, who asked not to be identified.

— Michael Taylor is a correspondent for Reuters in Jakarta.

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As affluent Indonesians turn away from rice, their country is vying with Japan to be Asia’s leading wheat buyer, while the latter battles economic crisis in the wake of a devastating earthquake and an aging population boosts protein in its diet.

“We are coming up on a par with, or even more than, Japan,” said Franciscus Welirang, chairman of the Indonesian Wheat Flour Mills Association, known as Aptindo. “It could be this year that we overtake.”

With Indonesia’s imports of the staple set to rise more than 10 per cent this year and three per cent a year in the period to 2015, the trend could even carry Indonesia to second place among the ranks of the world’s largest importers this year.

Listed firms that could gain from any rise in Indonesian wheat consumption include Indofood Sukses Makmur, Singapore’s Wilmar International and Malaysia’s PPB Group.

Indonesia, which relies entirely on imports for its wheat, gets around 60 per cent of supplies from Australia, with Canada and the United States accounting for about 30 per cent.

Western Australian wheat suppliers will benefit from the trend and continue to dominate Indonesian demand, analysts say, as geographic proximity and consumers’ preference for premium and standard white wheat head off competition from mainly soft white and hard red wheat producers in the U.S. and Canada.

Premium wheat from Western Australia, used to make bread and noodles, is also a favourite of East Asian countries, such as Vietnam and Taiwan.

Global wheat output is set to show a small deficit this year, with stocks meeting any shortfall as output hits around 663 million to 673 million tonnes, analysts say.

“In such a finely balanced market, any change in supply or demand will have an outsized impact on prices,” said Deepak Gopinath, director at Trusted Sources Research. “The continued rapid growth of Southeast Asian wheat imports will be bullish for wheat prices over the medium term.”

Southeast Asia now accounts for about 12 per cent of global wheat imports, up from nine per cent in 2009. While wheat imports by neighbouring Vietnam, Thailand and Malaysia have held under three million tonnes over the past decade, Indonesian intake has almost doubled.

This is due in part to a wheat consumption push by the Indonesian government, an effort to avoid an overreliance on the staple diet rice of which it is not a major exporter like many of its neighbours.

“Asia is a new market and one of the big issues in terms of food security,” said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

“We’re looking for increased production but it is not meeting the new demand from emerging economies – that’s the problem because it’s moving outside traditional food sources.”

Behind Indonesia’s rapidly rising wheat imports stands a booming economy, set to rise about 6.5 per cent this year, boosted by domestic consumption and mineral exports.

Appetites are changing, with bread-based breakfast favoured by the upper middle classes and noodles preferred by the middle classes, a shift away from the previous breakfast staple, rice.

Such changes are easy to spot on a walk through the smog-filled streets of Indonesia’s capital, Jakarta, where new fast-food outlets and billboards for the likes of McDonald’s, Dunkin’ Donuts, Pizza Hut and KFC, have mushroomed.

McDonald’s Indonesian licensee says the hamburger chain now has 117 restaurants in the country versus 98 at the end of 2009.

“The increasing westernization of diets throughout Southeast Asia over the past couple of years, has certainly driven feed wheat demand,” said Michael Creed, an agribusiness economist for National Australia Bank.

About 60 per cent of Indonesian wheat imports are now used to make noodles, with 20 per cent consumed by bakeries.

Aptindo Indonesia recently forecast wheat imports would grow 10 per cent this year to 5.1 million tonnes.

According to forecasts by the United States Department of Agriculture (USDA), Indonesia is already ahead in Asia in the trade year July 2010 to June 2011, with wheat and flour imports at 6.1 million tonnes compared to 5.5 million tonnes in Japan.

USDA data showed 2009- 10 imports for Indonesia and Japan at 5.36 million tonnes and 5.5 million tonnes respectively. It adds that Indonesian wheat consumption is estimated to rise to 5.8 million tonnes in 2010-11, versus 5.25 million in 2009-10.

A combination of aging population, rising incomes leading to consumers favouring less starch and more high-protein foods, are all helping to push Japan’s wheat consumption lower, analysts say.

Analysts say Indonesian wheat imports are seen rising about three per cent annually in three to five years, with huge scope for further growth, given that its annual consumption of wheat per capita of 18 kg puts the country among the world’s lowest.

But as tastes widen beyond rice, any negative impact on the traditional staple grain is limited due to Indonesia’s ambitious aims to be self-sufficient in rice production.

“The Indonesian government’s goal is to maintain rice self-sufficiency at all costs,” said Gopinath. “That means encouraging Indonesians to substitute wheat for rice as much as possible to slow the growth in rice consumption.”

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