South Korea is likely to lift an eight-year ban on Canadian beef imports by end June and plans sweeping changes in its grain growing and import policies in the face of rising global food prices, the country’s farm minister said.
Rising global food prices have prompted the country to eye participation in grain operations abroad and move to encourage farmers to grow more corn and wheat while easing rice import policies, said Yoo Jeong-bok, South Korea’s food, agriculture, forestry and fisheries minister.
The country is working with Canada to solve a dispute on beef imports banned over mad cow disease concerns in 2003, he said, as South Korea recovers from an outbreak of foot and mouth disease that cost the country nearly three trillion won (US$2.76 billion).
“A decision (on allowing Canadian beef imports) is likely to be made through bilateral talks instead of a (World Trade Organization) panel ruling. The decision is seen coming this quarter,” Yoo, 54, a former member of the parliament, told Reuters in an interview late Thursday.
Global grain market volatility is worsening and prices are likely to rise due to soaring demand, said Yoo, who represents the Asia-Pacific region at the U.N. Food and Agriculture Organization (FAO).
South Korea, the world’s fourth-largest grain importer, is responding to high prices with a range of measures such as buying U.S. grain storage elevators and increasing its overseas grain farming, Yoo said.
“We want to ensure supplies by expanding growing fields… On top of (direct grain) imports, we will raise importing through overseas farming to 10 per cent of our total imports by 2018,” he said, adding that imports from overseas grain farming could reach 1.38 million tonnes by 2018 from 281 tonnes in 2010.
South Korea may also allow open rice imports at an unspecified higher tariff instead of quota limits now, which incur a five per cent levy. It is also encouraging farmers to plant more corn and wheat as the country already produces more than enough rice to meet domestic demand, Yoo said.
Moving to a tariff-based rice system could give South Korea more flexibility to change imports volumes during price spikes through modifying levies on incoming shipments. Now, imports are constricted by an import quota cap.
South Korea could move to solely tariff-based rice imports by the start of 2012, at higher tariff rates, as part of a five-year plan to encourage corn and wheat planting, Yoo said.
“We are trying to raise production of wheat, beans and corn to reduce imports and ensure supplies… as local production of wheat and corn is less than one per cent each,” Yoo said, adding 40,000 hectares (about 99,000 acres) of rice fields would be used to grow other grains this year, and expanded in the next three years.
South Korea is vulnerable to increasingly volatile global grain markets and price rallies, as it imports three quarters of its 20 million-tonne grain consumption, he said.
South Korea will likely allow imports of Canadian cattle under 30 months of age when it lifts the import ban, similar to rules covering U.S. beef, Yoo said.
Canada’s Agriculture Minister Gerry Ritz said last month that the two countries were close to resolving the import dispute ahead of any decision from a WTO panel on the issue.
Canada is the world’s third-biggest beef shipper and South Korea was its No. 4 market in 2002 prior to the ban.
Last year South Korea imported a combined of 261,159 tonnes of frozen and chilled beef, and of the total, 53 per cent came from Australia and 32 per cent from the U.S.
Seoul culled a third of its hog population and about five per cent of cattle to contain its worst foot-and-mouth outbreak.
The government has turned to imports to alleviate meat price spikes. It cut import tariffs on pork to ease the shortage while the domestic livestock population recovers — which may take as long as two years.
The ministry would closely monitor prices to decide whether to extend tariff-free pork imports to the end of the year, Yoo added.
The government said it would also continue to test domestic and some imported food for radiation levels due to ongoing concerns about leaks from Japan’s earthquake and tsunami damaged nuclear plants, he said. But South Korea would not impose an outright ban.