East Asian nations closer to agreement on emergency rice reserve+

SINGAPORE, April 29 Kyodo -
Ten Southeast Asian nations plus Japan, China and South Korea are close to
realizing their goal of establishing an emergency rice reserve to ensure food
security in the face of sudden instabilities in supply and production,
according to official sources.
Agricultural and forestry ministers from the 13 countries aim to sign the
agreement when they meet in October in Cambodia, following more meetings among
senior officials to thresh out the details, the sources said.
It would be the first time for the region to have a permanent mechanism for an
emergency rice reserve and stock based on cooperation among the 10 members of
the Association of Southeast Asian Nations and the three Northeast Asian
countries.
The sources said Japan earlier this year withdrew its opposition to a legally
binding agreement for the ASEAN-plus-Three Emergency Rice Reserve scheme, while
other details have been ironed out by senior officials of the 13 governments.
The 13 countries have agreed in principle to earmark rice stock amounting to a
total 787,000 tons for the emergency rice reserve, with pledges of 87,000 tons
from ASEAN member countries, 250,000 tons from Japan, 300,000 from China and
150,000 from South Korea. The earmarked rice stock will be kept in their
respective countries for use as emergency reserve for Southeast Asia.
They are also expected to contribute a smaller amount for an actual rice
stockpile, which will be stored in a Southeast Asian location yet to be
decided.
There is also a proposal from ASEAN members for the 13 countries to establish a
US$4 million endowment fund to cover the operation costs of running and
maintaining the emergency rice reserve, out of which $1 million would be
contributed by ASEAN as a group with Japan, China and South Korea each
contributing $1 million, the sources said.
One of the sticking points for the emergency rice reserve plan is rule of
origin concerning the source of the rice. Some ASEAN rice-growing countries
like Thailand have insisted that the rice used for the emergency reserve should
not come from outside East Asia.
Japan has a problem with that, however, as it is difficult for it to provide
its own locally grown rice for Southeast Asia's emergency rice reserve.
For the East Asia Emergency Rice Reserve Pilot Project, a Japan-initiated
project in the region that started in 2004 and ended in February this year,
Japan had contributed rice it imported from such places as the United States.
Under the World Trade Organization rules on fair trade, Japan is obliged to
import some foreign rice, so it prefers to use this rice for Southeast Asia's
emergency rice reserve.
The EAERR Pilot Project was used to help disaster victims in Cambodia,
Indonesia and Myanmar as well as for malnourishment eradication programs in
Cambodia and Indonesia, for example.
ASEAN had launched its food security reserve in 1979, but officials said the
plan never really got off the ground and member countries normally turned to
each other for help on a bilateral basis when food crises broke out.
Southeast Asia as a whole enjoys a surplus in food production, with only
Singapore and Brunei relying on imports, but the rising incidence of natural
disasters and volatility in food prices in recent years have made ASEAN more
anxious to launch cooperation in food security.
In particular, some countries in the region were badly hit by skyrocketing rice
prices between 2007 and 2008 in line with a global surge in the price of food
commodities in the rest of the world.
At their summit meeting in Thailand last October, leaders of ASEAN, Japan,
China and South Korea agreed to explore the possibility of establishing the
proposed ASEAN-Plus-Three Emergency Rice Reserve, based on the experience of
the EAERR Pilot Project.
Before an agreement can be signed, ASEAN officials have to fine-tune the
decision-making process regarding release of emergency rice as one of the main
concerns is the negative side effects on local farmers, traders and the rice
market when a country hit by a food crisis suddenly receives a deluge of
emergency rice aid from overseas.
''We are developing the guidelines, the trigger mechanism, the decision-making
process. We don't want it to interfere with normal trade. We also need a
realistic funding mechanism,'' an ASEAN official said.
''Rice is more of a political commodity than economic. Every country has vested
interest,'' he said.
==Kyodo