South Korea is mulling an early imposition of tariffs on rice imports in a bid to better cope with its growing rice reserves amid dwindling consumption of the staple grain, the government said Tuesday.

   A deal signed in 2004 with nine rice exporting countries requires South Korea to buy rice through the so-called minimum market access (MMA) arrangement without imposing tariffs until 2014, when imports will be raised to 7.96 percent of domestic demand.

   Starting in 2015, South Korea can switch to a rice tariffication system, but it should continue to bring in rice equivalent to the 2014 MMA quota on top of amounts imported through tariffication.

   "No detailed plans have been drawn up to discontinue the present policy of regulating rice imports, but policymakers are weighing the pros and cons of rice tariffication," the Ministry for Food, Agriculture, Forestry and Agriculture said.

   The need for early rice tariffication has gained momentum because local consumption of rice has fallen steadily, reaching a record low of 72.8 kilograms per person in 2010. The drop in consumption and good harvests has caused domestic reserves of the staple grain to exceed 1.5 million tons last year, which costs the government billions of won to maintain.

   "Seoul has been considering tariffication for some time, but there is a need to examine various factors," a ministry official, who declined to be identified, said. "Despite benefits, some farmers are opposed to opening the market through tariffication."

   The early switch to tariffication could allow South Korea to import less rice, helping the government save money and control the size of rice reserves that affect local rice prices, he said.

   "If, for example, South Korea switches to tariffication next year, the country will only be obliged to import 348,000 tons of rice in the following years instead of 408,700 tons it must import if the present policy is maintained up till 2014," the official said.

   Critics, however, said that a switch to tariffication could exert negative influence on the ongoing Doha Development Agenda (DDA) talks on global trade liberalization and future negotiations on bilateral free trade agreements.

   South Korea wants to be classified as a "developing economy" in DDA agricultural negotiations, and has adopted the MMA system to highlight the weakness of its farming sector to secure concessions.

Source: Yonhap News (May 24, 2011)