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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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Trade, Agricultural Policies and Structural Changes in Indias Agrifood System
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$/kg
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Trade, Agricultural Policies and Structural Changes in Indias Agrifood System
Indian wheat stocks and domestic prices
US$/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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Trade, Agricultural Policies and Structural Changes in Indias Agrifood System
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]