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Korea faces dilemma over rice market opening

Publication Date : 23-06-2014

 

South Korea is set to make a decision on opening its rice market with the deadline set by the World Trade Organisation approaching.

Up to now, a quota system has limited rice imports to some 8 per cent of the local market, but the deal with the WTO ends this year.

Now, the government has two possible options: to liberalise its rice market or to ask the world trade body for another waiver to the rice market opening.

The Ministry of Agriculture, Food and Rural Affairs is expected to announce its stance later this week, following a public hearing last Friday and most market watchers expect the ministry to push for the market opening option.

The ministry has insisted that liberalising the country’s rice market was “inevitable,” given the already overly high rice import quota that had been growing steadily since 1993. Since 2004, the country has imported around 7.96 per cent of its domestic rice consumption per year.

The ministry is trying hard to convince local farmers to accept the market opening by promising that they would impose high-level tariffs on rice imports. It also promised to exclude rice from the negotiation tables for free trade deals.

Farmers are divided over the liberalisation of the rice market. The Korean Advanced Farmers Federation, a lobby group of local rice farmers, said it could accept the opening of the market if the government would keep the tariffs on imported rice as high as possible. They are asking for 300 per cent to 500 per cent tariffs.

The progressive Korean Peasants League, however, is strongly protesting against the market opening, citing worries about free trade agreements’ potential threats to the local agricultural industry.

“If we open the market, we will lose the ground of our rice farming and food sovereignty,” an official from the Korean Peasants League said.

The farmers insist that the government should request a waiver from the WTO to keep its restrictions on imported rice, though it still requires approval from the members of trade organisation.

But the problem, experts point out, is that the delay in the market opening could result in a significant increase in rice import quota, given the case of the Philippines.

The Philippines was given last week another five-year extension delaying the market opening in exchange for the doubling of its mandatory rice imports to over 800,000 tonnes per year.

A continued decline in South Korea’s rice consumption has become a roadblock to extension of the rice quota system. Per capita consumption is expected to shrink 1.75 per cent on-year to 67.3 kilograms, according to the ministry.

“If we opt to go for another waiver, we have no choice but to significantly reduce our own rice production to avoid an oversupply,” a ministry official said.


 

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