S. Korean rice industry to be hit hard by FTA with US: Report
Asia Pulse News
S. KOREAN RICE INDUSTRY TO BE HIT HARD BY FTA WITH U.S.: REPORT
Wednesday February 15, 2006
SEOUL, Feb 15 Asia Pulse - South Korea’s rice industry could suffer a significant drop in earnings and production if the country signs a free trade pact with the United States, a report said Wednesday.
The Korea Rural Economic Institute (KREI) estimated losses to exceed 200 billion won (US$206 million) a year, even if Seoul exempts rice from any market liberalization deal. The report, released during a symposium on the impact of market opening and agriculture, said a free trade agreement (FTA) will cause lowering of duties on a wide range of agricultural products, which can cause a shift of capital and people into other fields.
It could also provide access to cheaper types of food and thus reduce the country’s already diminishing demand for rice, according to the study. A drop in demand can cause a general weakening of the rice-producing infrastructure.
"The loss in earnings can reach 211.4 billion won in the worst-case scenario or be limited to around 100 billion won," said Kwon O-bok, a researcher for the KREI. He also said that besides rice, an FTA will cause agricultural imports from the United States to rise by 1.83-3.17 trillion won, possibly leading to a large number of layoffs in the sector.
The expert said there is no way of predicting the exact number of jobs affected, but speculated it could be between 71,000 to 142,000. Such predictions are causing farm and livestock groups to ask the government to reconsider an FTA with the United States.
The Ministry of Agriculture and Forestry said it was aware of concerns and had already pledged to spend 100 trillion won to build up rural production infrastructure for the raising of competitiveness.
In addition, Agriculture Minister Park Hong-soo said earlier in the week that import restrictions on such sensitive items as rice, meat, and certain fruits will be maintained.
(Yonhap)
