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South Korea may open rice market
Publication Date : 10-09-2013
The Korean government may open its rice market from 2015 to foreign suppliers after an extension of the current quota system in the rice market ends next year, according to a report from the National Assembly Research Institute.
In its analysis, which was submitted to Rep. Shim Jae-kwon of main opposition Democratic Party, the institute said the rice market opening with tariffs could be an option to take.
The report said the government considers that the time is ripe for opening the rice market, and further tariffs could be preferable to the current import cap that has been pushed up every year under the quota system.
In response to the report, the Ministry of Agriculture, Food and Rural Affairs issued a statement Monday, saying that the government had yet to decide whether to open the market or not.
Korea has delayed opening the rice market until 2014 based on an agreement reached in 2004 with the World Trade Organisation in exchange for an annual increase in rice imports, known as the minimum market access quota.
Under the extended quota system, rice imports have increased around 4 per cent on average annually. Rice imports stood at 225,575 tonnes in 2005, and reached 368,006 tonnes last year. Next year, Korea plans to import 408,700 tonnes.
“The government seems to have no choice but to open the market. Most of all, the government is under pressure from the rising purchase and inventory costs,” an official from the Korea Rural Economic Research Institute said on condition of anonymity.
Market watchers said an additional extension of the quota system would not be an option, as the government failed to make room for a second extension during the 2004 negotiations.
Meanwhile, farmers’ groups raised concerns about rice market opening.
“We don’t understand why the government only thinks about opening the rice market. We have proposed to the government a third option: maintaining a ‘status quo,’ as the Doha Development Agenda, the current trade negotiation round of the WTO for developing countries, has been in limbo since 2004,” said Jang Kyung-ho from the Institute for the Agricultural Industry and Farmers.
“When the market is open, a more-than 400 per cent tariff is required to protect the local rice market from competition from China, which produces much cheaper rice, but in reality, it will not be an easy task for the government to achieve.”
The previous government also sought early tariff implementation of the rice market, but it abandoned the plan due to strong resistance from farmers.