According to Reuters, farmers in South Korea have opposed the government’s plan to end its 20-year long rice import quota and liberalize rice imports in 2014. In order to gain access for other products such as automobiles in various countries, the government is supporting free trade and has open its rice markets as well.

But according to USDA, South Korea rice production is expected to reach around 4.2 million tons in MY 2013-14 versus consumption of about 4.5 million tons and under World Trade Organization (WTO) obligations the country must import 400,000 tons of rice, hence causing excess of supply and less consumption due to changing food habits and economic growth.

In order to protect interests of local rice farmers, the government is trying to reduce rice production and cap rice imports. Current Cap rate as per WTO regulation is 7.96% and the agreement may be extended this year, commented South Korea’s Agriculture Minister.

Now, the government is left only with two options, either to double import quotas again or place high tariffs (between 300-500%) on rice imports exceeding obligatory purchases of about 408,700 tons per year. Imposing high tariff is a helpful solution but may have challenges like eventually South Korea will be forced to lower tariff if negotiation with China over free trade under Trans- Pacific partnership finalizes and WTO may also not agree to high tariff rates.

 

Farmers are agitated by the proposal and have asked that government should fix a support price for farmers and encourage domestic rice production.

LEAVE A REPLY