Hearing paves the way for opening rice market

Ahead of an announcement next week on a comprehensive plan to open Korea’s rice market, the Ministry of Agriculture, Food and Rural Affairs made it clear there is no alternative to tariffication.

At a public hearing held by the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee yesterday, Yeo In-hong, vice minister of agriculture, said it is impossible to postpone determining tariff rates again.

“Costs would be unavoidable if Korea is given another waiver for tariffication,” Yeo said at the hearing. “The government cannot put off the task anymore and there is no other alternative.”

Tariffication refers to the conversion of all non-tariff barriers to agricultural trade to tariffs that have a “ceiling” and to reduce them over time.

Korea currently faces something of a dilemma. If the World Trade Organization (WTO) extends a waiver for a few more years, the country will have a higher tariff rate quota (TRQ) like the Philippines, which just last month was granted its second waiver, until 2017, with a 230 percent TRQ increase. TRQs stipulate a level of reduced tariff imports beyond which the tariff rises significantly.

After the WTO extended the TRO for the Philippines, experts and farmers groups gathered to discuss Korea’s options. Korea’s current waiver will expire at the end of the year.

The WTO Agreement on Agriculture stipulates an unexceptional tariffication principle for all agricultural products of member countries, though Korea was given a 10-year waiver in 1995 and another in 2004. If the WTO rejects a third waiver, tariffs will be reduced next year.

The country this year agreed to import the minimum market access (MMA) volume - 408,700 tons - or about 9 percent of rice consumed (4.5 million tons) last year. The MMA volume has steadily increased from 51,307 tons in 1995.

The Agriculture Ministry said a third extension of the waiver would only increase the required MMA volume, which would bring significantly more rice into the country at a time when domestic consumption is declining.

That would likely cause rice prices to drop and increase the burden on farmers, according to the ministry.

Per capita rice consumption has decreased by 1.2 kilograms (2.64 pounds) to 1.6 kilograms annually.

“For the past 20 years, the Korean rice industry has been changing rapidly in terms of production, distribution and consumption,” Yeo said. “Owing to the government and farms’ constant efforts and investment, the industry has secured competitiveness. Opening the market is an opportunity for the industry to develop further.”

Choi Won-mok, a professor of law at Ewha Womans University, called for early notification of the rice tariffication.

“It is a legitimate policy internationally,” Choi said at the hearing. “The government should make it official that the Korean market is open from Jan. 1.”

BY SONG SU-HYUN [ssh@joongang.co.kr]