Asean countries to 'work together on rice crisis'

Straits Times 4 May 08;

No concrete measures agreed on but proposal for cartel is shot down
Nusa Dua (Bali) - Asean nations agreed yesterday to cooperate over the rice market, but stopped short of concrete measures to deal with rocketing prices of the region's staple.

A proposal for a South-east Asian rice cartel also came in for criticism by Philippine officials and the Asian Development Bank (ADB), as countries continued to seek ways to keep rice prices stable and supplies secure.

Trade ministers from the 10 Asean countries had met on the Indonesian resort island over the weekend to discuss topics such as freeing up trade in Asean, but the issue of food security hijacked discussions.

'The ministers affirmed that access to adequate and reliable supply of rice and stable prices are fundamental to the region's economic and social well-being,' they said in a statement.

They added that they recognised the need to improve productivity through technology transfers, research and development as well as making more land available for agriculture and lifting spending.

Indonesian Trade Minister Mari Pangestu told a news conference that while Asean stopped short of 'concrete actions', the group 'did agree very strongly to communicate and cooperate among ourselves'.

Asean already has an emergency reserve with about 87,000 tonnes of rice committed, she added.

The agreement to cooperate over the looming rice crisis came as Thailand, the world's largest importer, yesterday said it planned to stick to its policy of not curbing rice exports.

Countries including India, Vietnam, Indonesia and Brazil have restricted food exports in a bid to secure domestic supplies and limit inflation, but Thai Commerce Minister Mingkwan Sangsuwan stressed yesterday that Thailand would not follow suit.

'For Thailand, as the No. 1 leader in rice exports, we still keep the policy of free exports,' he said. 'I will try my best not to do an export ban.'

Thailand had earlier mooted forming an Opec-style rice cartel with other South-east Asian producers, but this drew flak from senior Philippine officials as well as the ADB.

Setting up an Organisation of Rice Exporting Countries would only cause greater problems as it is 'anti-poor and will only exacerbate hunger and poverty rather than ease it', Philippine Senate majority leader Francis Pangilinan said yesterday.

ADB president Haruhiko Kuroda also opposed such a cartel, saying: 'Agricultural markets should be market- oriented. It would not be good for exporters and it certainly would not be good for importers.'

The threat of a food crisis could hit more than 100 million people on every continent, and has prompted a response from global aid providers.

Yesterday, the ADB announced emergency funding in the form of soft loans for the governments of countries hardest hit by the global food crisis, such as Bangladesh.

Mr Kuroda declined to give a figure, saying it would depend on requests made by governments. He said the amount would be 'sizeable, but not enormous'.

'We believe targeted interventions to protect food entitlements of the most vulnerable and poor are more effective to mitigate the immediate impact of rising food prices,' he said.

Earlier last week, US President George W. Bush proposed US$770 million (S$1 billion) in new US food aid to stave off a global food crisis. He pledged that Washington would take the lead in combating global hunger.

Reuters, AFP, AP