PPT: ASEAN & SAARC Regional Rice Trade: Status & Opportunities for Ensuring Food Security

7/22/2019 PPT: ASEAN & SAARC Regional Rice Trade: Status & Opportunities for Ensuring Food Security

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SESSION 4.2

ASEAN and SAARC Regional Trade:Status and Opportunities

for Ensuring Food Security

Pramod K. Joshi and Devesh Roy

International Food Policy Research Institute (IFPRI)


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Outline

1. About SAARC Food Bank, Seed Bank, Regional trade

2. Contrast between SAARC and ASEAN Approaches in ensuring food security

cooperation

3. Existing areas of cooperation betweenASEAN and SAARC

4. Potential areas for cooperation betweenASEAN and SAARC countries Food trade and food reserve

5. Way forward


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1. About SAARC

Food reserve and trade


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1. SAARC Food Bank

Reserve food grain to be maintained by membercountries of either rice or wheat or a combination ofboth

Committed reserve: 486,000 metric tons

India sharing 306,400 metric tons (about 63%)

Objectives

Act as a regional food security reserve for the SAARCMember States during food shortages and emergencies

Provide regional support to national food security efforts Foster inter-country partnerships to solve regional food

shortages through collective action

Withdrawal procedure and replacement


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2. SAARC Seed Bank

Agreement signed in 2011 for establishing SAARCSeed Bank in Sri Lanka

Objectives: Provide regional support to national seed security efforts,

address regional seed shortages through collective actions Increase Seed Replacement Rate (SRR)

Act as a Regional Seed Security reserve for the MemberStates

Make available quality seeds, exchange seeds and plant

genetic resources and share best practices, technologiesand techniques among countries to produce quality seeds

Each member country is expected to contribute1% of their total seed requirement


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An illustration from Indias food reserveand food security efforts


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Indian government strategy for ensuringfood security (national and household)

Food Security Mission Subsidy in fertilizer and irrigation MSP and assured procurement

Production

Food reserve and stocks (>80 milliontons)

500 thousand fair price shopsAvailability

Mahatma Gandhi National RuralEmployment Guarantee Program

Direct Cash Transfer

Access

Subsidized food to people BPL Food Security Bill (Right to Food)

Affordability


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Trade, Agricultural Policies and Structural Changes in Indias Agrifood System

Indian food stock and prices (MSP) of rice and wheat


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Indian rice stocks and domestic rice prices

0.2

0.25

0.3

0.35

0.4

0.45

0.5

2000 2002 2004 2006 2008 2010 2012

0

50

100

150

200

250

300

350Rice_stock (right)

Price_rice (left)

100.0

00

ton

nes

US$/kg


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Indian wheat stocks and domestic prices

US$/kg

100.0

00

ton

nes

0.15

0.2

0.25

0.3

0.35

0.4

2000 2002 2004 2006 2008 2010 2012

0

50

100

150

200

250

300

350

400

450

500

550Wheat_stock (right)

Price_wheat (left)


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Pressure on stocks through prices

Export ban on rice and wheat

Wheat: February 2007 to September 2011

Rice: September 2007 to September 2011

Pressure from farmers to increase MSP

Few states give bonus above MSPs When MSPs increase, stocks increase, but

domestic prices also went up!

Assured procurement of rice and wheat

Not adequate off-take of rice and wheat forPublic Distribution Program


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3. South Asia Free Trade Area (SAFTA)

Trade liberalization program commencedfrom 1 January 2006

Objective of SAFTA Promote competition in the free trade area

Promote trade by reducing tariff and barriers, and give specialpreference to the Least Developed Countries

Benefit the people by bringing transparency and integrityamong nations

Tariff Developing countries (India, Pakistan and Sri Lanka) bring

duties down to 20% by 2007 and to zero by 2012

Least developed countries (Nepal, Bangladesh, Afghanistanand Maldives) have additional three years (2015) to reducetariffs to zero


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SAFTA contd

Sensitive list

Commodities/items are not included for tariffconcessions

SAFTA internal trade increased USD 69,000 in 2006 to USD 342 million in 2012; with a

peak of USD 663 million in 2010

Total trade from 2006 to 2012 was USD 2 billion

Intra-SAARC trade is mere 2% of total external trade;intra-ASEAN trade is 25% of all external trade

India (65%) and Bangladesh (27%) are majorcontributors (92%) in intra-regional trade


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2. Compare and contrastSAARC and ASEAN


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Per capita supply offood grain and protein

Food grain availability(kg/capita/year)

140145

150

155

160

165

170

175

1990 2009

167

161

151

173

SAARC ASEAN

Protein availability(g/capita/day)

05

10

15

20

25

30

35

40

1990 2009

40

29.2

38.7

33.4

SAARC ASEAN


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Agriculture trade by SAARC and ASEANcountries (Constant US Billion $)

SAARC countries

0

5

10

15

20

25

30

35

Export Import

5.6

6.88.3

10.7

32 33

1990 2000 2010

ASEAN countries

0

20

40

60

80

100

120

Export Import

17.3 10.825.1 19.3

104

61

1990 2000 2010


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SAARC and ASEAN in world agriculture trade

Export (% of world) Import (% of world)

Year 1990 2010 1990 2010

SAARC countries 1.73 2.97 1.94 3.02

ASEAN countries 5.53 9.64 3.07 5.49

India in South Asia 55.0 62.0 16.0 31.0

Export/import ratio in SAARC countries was < 1 (0.83 in 1990 and 0.96 in 2010)Trade deficit region (- USD 1.33 billion)

Export/import ratio of ASEAN countries was >1 (1.60 in 1990 and 1.74 in 2010)Trade surplus region (+ USD 43 billion)

Indias E/I ratio was 2.83 in 1990 and fallen to 1.92 in 2010Trade surplus (+ USD 9.52 billion)


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Imports of rice by Asian regions (mt)

Region 1990 2011

East Asia 0.53 1.98

SoutheastAsia

1.27 (10%) 4.47 (14%)(2% of production)

South Asia 0.63 (5%) 0.98 (3%)(


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Exports of rice by Asian regions (mt)

Region 1990 2010

East Asia 0.47 0.67SoutheastAsia

5.86 (47%) 16.05 (49%)(8% of production)

South Asia 1.25 (10%) 6.42 (20%)(3% of production)

Asia 7.77 (62%) 23.83 (72.7%)

Africa 0.10 1.05

Americas 3.04 5.77

Europe 1.12 2.06

Oceania 0.43 0.06

World 12.46 32.77


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Important export commodities from ASEAN andimport commodities from SAARC countries

Exporter

Indonesia

Palm oil; rubber; palm kernel oil;cocoa beans; coffee green

Malaysia

Palm oil; rubber; oil hydrogenated;cocoa butter; palm kernel oil

Philippines

Coconut oil; bananas; milk, dried;pineapple, canned; cigarettes

Thailand

Rubber; rice; chicken meat,canned; refined sugar; cassava

Viet Nam

Rice; rubber; coffee, green;cashew nut; pepper

Importer Bhutan

Rice; raw sugar; soybean oil;barley beer; skimmed milk

BangladeshPalm oil; raw sugar; wheat;

cotton; soybean oil India

Palm oil; soybean oil; dry beans;rubber; cashew nuts

NepalPalm oil; soybean oil; arecanuts;rice; soybean cake

PakistanPalm oil; refined sugar; cottonlint; rapeseeds; tea

Sri LankaPalm oil; sugar; wheat; milk;lentil


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Important import commodities by ASEAN andexport commodities by SAARC countries

Importer Indonesia

Soybean cake; cotton lint; rice;wheat; soybean; raw sugar

MalaysiaPalm oil; rubber; cocoa bean; rubbernatural dry; sugar

Philippines

Rice; soybean cake; wheat; food prenes; skimmed milk; refined sugar

ThailandSoybean cake; soybean; cotton lint;wheat; food prep nes

Viet NamPasrty; chicken meat; cigarettes;beverages (dist alc)

Exporter Bhutan

Oranges; cardamom; potatoes;apples; fruit juices nes; mushrooms

BangladeshCotton lint; jute; tobacco; nuts; freshvegetables; sesame seeds

India

Soybean cake; cotton lint; rice;sugar; buffalo meat; tobacco; tea

NepalLentil; tea; cardamom; beverages(non alc); nuts; ginger

PakistanCotton lint; rice; tangerines; oilhydrogenated; cattle meat; potatoes

Sri LankaTea; rubber; wheat flour; cinnamon;coconut; food wastes; food prep nes;pepper


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Exports of rice by India to SAARC andASEAN countries (000 tons)

-500

0

500

1000

1500

2000

2500

SAARC ASEAN


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Imports of rice by ASEAN countrieswithin the region (000 tons)

-500

0

500

1000

1500

2000

2500

3000

3500

Indonesia Malaysia Philippines Singapore


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Existing partnership

Indo-ASEAN Trade

Trade increased from US$ 30.7 b in 2006-07 to US$ 39.08 bin 2007-08; 45.34 b in 2008-09 and approached to US$ 70 bin 2012

India 7th

largest trading partner with ASEAN and 6th

largestinvestor (FDI) in ASEAN

India-ASEAN Green Fund

Promote agriculture sector and R&D

US$ 5 million for pilot projects to promote adaptation and

mitigation technologies on climate change ASEAN-India Scientist & Technology Fund

Promote science and technology in a partnership mode


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4. Potential areas ofcooperation between

SAARC and ASEAN


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Important areas for cooperation

Research &

Education

Agricultural

Trade

Knowledge

Platform


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ASEAN-SAARC Trade

Opportunities for trade between ASEANand SAARC countries Palm oil; rubber, rice from ASEAN to SAARC Rice, wheat, milk, cotton lint, soybean and

soybean cake from SAARC to ASEAN Food safety issues

Biotechnology and biosafety standards inAsia

Intra-regional trade flow AFTA effective but not SAFTA Trade flow within SAARC region is poor


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5. Way forward


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Way forward

Rice+: include livestock and horticulture Develop common agriculture policy to prepare for post

AEC 2015 Learn lessons on best practices from both the regions

ASEAN from SAARC on building SAARC food bank and seed

bank ASEAN from India on building food reserve SAARC from ASEAN on increasing productivity and promoting

export

Identify commodities and assess their competitiveness forpromoting inter-regional trade in agricultural commodities Analyze constraints in promoting trade between ASEAN and

SAARC countries

Develop networks to share knowledge and best practices Sensitize policy makers to promote inter-regional cooperation


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For information, contact:

Pramod K. Joshi orDevesh [email protected]

[email protected]

PPT: ASEAN & SAARC Regional Rice Trade: Status & Opportunities for Ensuring Food Security

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