April 18, 2011

 

South Korea may lift ban on Canadian beef imports

 

 

South Korea is likely to lift an eight-year ban on Canadian beef imports by end June, and has plans to make changes in its grain growing and import policies in the face of rising global food prices, South Korea's farm minister said.

 

Rising global food prices have prompted the country to eye participation in grain operations abroad and encouraged farmers to grow more corn and wheat while easing rice import policies, said Yoo Jeong-bok, South Korea's food, agriculture, forestry and fisheries minister.

 

South Korea is working with Canada to solve a dispute on beef imports banned over mad cow disease concerns in 2003, he said, as South Korea recovers from an outbreak of foot-and-mouth-disease which cost the country nearly KRW3 trillion (US$2.75 billion).

 

"A decision (on allowing Canadian beef imports) is likely to be made through bilateral talks instead of a WTO panel ruling. The decision is seen coming this quarter," said Yoo, a former member of the parliament.

 

Global grain market volatility is worsening and prices are likely to rise due to soaring demand, said Yoo, who represented the Asia-Pacific region at the UN Food and Agriculture Organisation (FAO).

 

South Korea, the world's fourth-largest grain importer, is responding to high prices with a range of measures such as buying US grain storage elevators and increasing its overseas grain farming, Yoo said.

 

"We want to ensure supplies by expanding growing fields ... On top of (direct grain) imports, we will raise importing through overseas farming to 10% of our total imports by 2018," he said, adding that imports from overseas grain farming could reach 1.38 million tonnes by 2018 from 281 tonnes in 2010.

 

South Korea may also allow open rice imports at an unspecified higher tariff instead of quota limits now, which incur a 5% levy. It is also encouraging farmers to plant more corn and wheat as the country already produces more than enough rice to meet domestic demand, Yoo said.

 

Moving to a tariff-based rice system could give South Korea more flexibility to change imports volumes during price spikes through modifying levies on incoming shipments. Now, imports are constricted by an import quota cap.

 

In 2011, South Korea will allow rice imports of 347,658 tonnes, compared to 327,311 tonnes bought last year. The rice import quota is set to grow by about 20,000 tonnes per year to 408,700 tonnes by 2014. South Korea could move to solely tariff-based rice imports by the start of 2012, at higher tariff rates, as part of a five-year plan to encourage corn and wheat planting, Yoo said.

 

"We are trying to raise production of wheat, beans and corn to reduce imports and ensure supplies, as local production of wheat and corn is less than 1% each," Yoo said, adding that 40,000 hectares of rice fields would be used to grow other grains this year, and expanded in the next three years.

 

South Korea is vulnerable to increasingly volatile global grain markets and price rallies, as it imports three quarters of its 20 million-tonne grain consumption, he said.