ASEAN Food Security; Cooperate, Don’t Compete

  • 21 November 2014, Friday

Source: Malaya Business Insight
13 Nov 2014

Cooperate, don’t compete, the head of an agricultural think tank yesterday urged the Association of Southeast Asian Nations, as a leading Asian economist called for  private companies to play a bigger role in food security.
 
“We should get ready for Asean 2015, and member countries should not see it an opportunity to compete but rather to complement each other’s strengths,’” said Dr. Gil C. Saguiguit Jr., director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA). 
 
“Rather than competition, a common market means complementing each other’s strengths.”
 
Countries  strong in rice production, for example, should help those who are weak, he said at the sidelines of the 2nd International Conference on Agricultural and Rural Development in Southeast Asia.
 
If rice self-sufficiency is not attainable, countries with surplus rice should help those who need the cereal, Saguiguit said, adding that this is important during a food crisis. 
 
The sharp increases in international food prices in 2007-2008 prompted Asean member states to develop the Integrated Food Security Framework program to ensure long-term food security; it covers food security and emergency/shortage relief; sustainable food trade development; an integrated food security information system; and agricultural innovation.
 
The Asean Emergency Rice Reserve, in place since 1979, has expanded since 2002 with the Asean Plus Three Emergency Rice Reserve that includes China, Japan and South Korea. 
 
In an emergency, rice will be dispatched to countries in need; each country holds a reserve stock that could be in the form of advance contracts. 
 
Regular meetings are held to assess the regional rice supply and to stabilize prizes. The initiative could potentially include other food items.
 
“The availability of food supply is not only a public issue because the private sector is the real actor,” said Dr. Suthad Setboonsarng, one of Southeast Asia’s top experts in international trade and investment. “The private sector has to play a larger role in the rice market and it can be involved in assuring its supply.”
 
The private sector must come forward with a proposal to help manage regional food security, he said, citing the case of Singapore where all rice traders are mandated to hold certain levels of stock and to release the stock when required.
 
“There is a need to strengthen regional agreements on rice to allow more private involvement in managing regional stock rice reserves, such as the Asean Plus Three Emergency Rice Reserve program,” said Setboonsarng who has served as a special representative of the Prime Minister of Thailand in coordinating and executing international trade and investment. He currently sits in a member of the board of directors of the Cambodia Development Research Institute and the Board of Trustees of the International Rice Research Institute.
 
“Food security might very well be most efficiently approached through regional cooperation rather than primarily at the national or local levels,” he said. 
 
“The dynamics of intra- and extra-regional trade in agricultural commodities will inevitably and increasingly receive prominent attention, particularly because sensitive agricultural products have been among the longest holdouts to the full liberalization of trade in goods within the region, and globally.”
 
“We all have our individual strengths, so we will all benefit,” Saguiguit said. “The challenge is how to fit the pieces together. This will be highlighted in the conference (and) this will be SEARCA’s contribution to the Asean community.”
 
The conference “underscores how important agricultural and rural development is for Southeast Asia, as we anticipate the Asean Economic Community in 2015,” Saguguit said in his opening remarks. “With the changing Asean landscape, agricultural and rural development remains a vital cog in the efforts of each country and the region to work towards food security and poverty alleviation, against the backdrop of increasing population, dwindling natural resources, erratic climate change and pressures due to multiple and conflicting land uses, among others.”
 
Over 400 delegates from 22 countries are attending the conference organized by SEARCA; it  aims to highlight innovative technological and practical approaches in agriculture, showcase and derive useful lessons from institutional successes and failures, and draw evidence-based policy implications.
 
Southeast Asia is the world’s top producer of rice, cashew nuts and palm oil. Trade in food products among  Asean countries is relatively low compared to food exported outside the region. 
 
While Asean  countries are major producers of many food items despite the declining contribution of agriculture to gross domestic product, they import large volumes of corn, soybean and wheat from outside the region. 
 
To create a single market, Asean countries are reducing tariffs to zero percent by 2015; rice is an exception where import duty is reduced to 20 percent. The Asean Comprehensive Investment Agreement puts a restriction on investments in rice production; Philippine companies, for example, cannot invest on a rice mill in Thailand – and vice versa. 
 
The Framework Agreement on Services allows investment from Asean entities up to 70 percent equity in agreed services; there are no restrictions  on foreign investment in agricultural services like warehousing. The free movement of capital and labor is also allowed although these have been moving slowly.
 
More than 80 percent of agricultural trade is already free but not for rice, sugar, palm oil, tobacco and other sensitive commodities.