Transcript WTO/FTA Negotiation and Recent Trend of Rice Market Masaru KAGATSUME

WTO/FTA Negotiation and
Recent Trend of Rice Market
Korea-Japan Joint Workshop,
on World Rice Consumption Strategies
July 23, 2004
Masaru KAGATSUME
Professor
Graduate School of Agriculture,
Kyoto University, Japan
Abstruct
1. WTO/FTA negotiation and agreement
2. Reform of Rice Distribution System
3. Situation of Rice Import & Reserve Stock
4. Determining Factors of Rice Demand
1. WTO/FTA negotiation and agreement
Outline of Agricultural Negotiation Result of the Uruguay Round on Rice
Agreement
Dec 15, 1993
Implementation Jan 1, 1995
(1) Tariffication is not carried out. Tariff equivalent is not set. ( Import Quota system is
maintained)
(2) State Trade system is maintained
(3) Minimum Access is accepted. Following this, the government charges the mark-up through the
state trade from the imported rice.
・ minimum access quantity
4% equivalent (1995) of the domestic consumption in basis period (1986-1988),
increasing to 8% equivalent (2000)
< 379 thousand tons milled rice (1995) to 758 thousand tons milled rice (2000) >
・ Mark-up
Setting based on the gap between selling price and buying price of the imported rice (Thailand Rice)
purchased by the government food agency in the basis period (1986-1988).
<Specific tax>
( maximum \292/kg )
(4) others
・ The simultaneous buying-selling system (SBS) is introduced in order to establish reasonable
domestic market evaluation of the imported rice following the minimum access
・ The same is applied to the rice processing commodity
Content of rice tariffication in Japan
•
•
•
1.
2.
Date of implementation
Basic Tariff Equivalence (TE)
1999.4.1
\402/kg
(milled rice, upper grade)
-------------------------------------------------<Calculation Basis>----------------------------------------------Base year
International Price (A) Domestic Pricre (B)
B-A
( average in the 3
(import cif price)
(wholesale price)
years 1986-88 )
-------------------------------------------------------------------------------------------------------------------------------1986
\29/kg
\438/kg
\409/kg
1987
\31/kg
\435/kg
\404/kg
\402/kg
1988
\37/kg
\429/kg
\392/kg
---------------------------------------------------------------------------------------------------------------------------------
3.
The second tariff rate (over quota rate)
1999
2000
•
4.
(*) Under the agricultural agreement
the basic tariff equivalent has to be
reduced 15% for 6 years to 2000.
the minimum access quantity (paddy)
•
1999
•
2000
•
\351.17/kg
\341.00/kg
724,000 mt (6.8% of domestic consumption in the base year)
<43000mt less than the case of the old special measure>
767,000 mt (7.2% of domestic consumption in the basis year)
<85000mt less than the case of the old special measure>
5. other
As for the minimum access import, the current state trade system is maintained.
Shifting into the rice tariffication system in April, 1999
the annual growth rate of the minimum access quantity had reduced by 50% in comparison with the case of
continuing the non-tariffication with special measures (i.e. 0.8%/year to 0.4%/year).
1999
767 --- 724 thousand ton ( paddy ) < 682 --- 644 thousand ton ( milled rice) >
2000
852 --- 767 thousand ton ( paddy )
< 758 --- 682 thousand ton ( milled rice) >
a) abolishment of licensing of rice trading
Licensing system of rice export-import is abolished, following this, the compulsory
selling of rice imported through permission to government is abolished
b) implementation of payment to government for rice import
For rice which is imported under the second (over quota) tariff rate, the government
can charge one part of second tariff rate as a payment to the government ( \292/kg ) .
This payment to the government from the rice import is appropriated for the imported
food administration account of the staple food administration special account.
c) implementation of the notification system on rice import-export
the rice import-export have to be notified to the government.
d) setting the second ( over quota ) tariff rate
(1)the basic primary rate( \402/kg ) is set to be tariff equivalent based on the agricultural agreement
(2)the second ( over quota ) rate is calculated based on the agreement. The rest of the second rate
from which the payment to government is deducted is set to be the preliminary rate.
Second rate
1999
\351.17/kg
of which, preliminary rate
\59.17/kg
2000
\341/kg
\49/kg
(3) rice can be protected by the special emergency tariff system ( special safeguard system)
The mechanism of the switching to rice tariffication
( old system )
( after tariffication )
Selling price
Import markup
(maximum ¥ 292/kg)
second rate
(¥ 341/kg after 2000.4.1)
Buying price
(minimum access qty)
<within TRQ import>
(minimum access qty)
<within TRQ import> < over TRQ import >
(at first tariff rate) (at second tariff rate )
(*)import markup means the gap between government selling price and buying price
Border Protection Measures
• Agricultural Protection
– rice, wheat, dairy products
– IQ into TQ at the UR
• Tariff Rate Equivalent
– Rice(490%), wheat(210%), barley(190%), butter(330%),
SMP(200%), silk(190%), vegetables(3%), fruits(6-20%)
• Modality Proposal by Mr Harbinson
<tariff rate>
<average> <minimum>
more than 90%
60% ↓ 45%↓
15 to 90%
50% ↓
35%↓
less than 15%
40% ↓ 25% ↓
２．Reform of Rice Distribution System
1941
1969
1990
1992
1995
2004
Food Control Law
Voluntary Distributed Rice system
Voluntary Distributed Rice Price Formation Organization
New Agricultural Policy
New Food Law
Abolishment of Planned Distributed Rice system
Producers
Unplanned
Distribution Rice
Trading Firms
Planned Distribution Rice
Voluntary
Distribution Rice
Government
Distribution Rice
Imported Rice
( Government
Distribution Rice )
Unregistered Collection Traders
Registered Collection Traders of Type 1
( collection by Farm Cooperatives, Merchant )
Registered Trader of Type 2
( collection by Economic Farm Coop, Collective Union )
Voluntary Distribution Corporation
( National Federation of Farm Coop,
National Federation of Collective Union, etc. )
Unregistered Selling Traders
Voluntary Distribution Rice
Price Formation Center
(Auction Trade)
Registered Wholesalers
Registered Retailers
Consumers
distribution route of unplanned distribution rice under the New Food Law
distribution route of planned distribution rice under the New Food Law
distribution route under the Food Control Law
Government
Processors
Reservation Stock
Government
Rice
Normal Import
Imported Rice
SBS Import
Government
Selling Traders
Label Regulation
Notified Traders
Rice Stable Supply Support Organization
Rice Consumers
(trading place)
Shipping Traders
Commodity test (optional)
Private Distribution Rice
Rice Producers
Rice Price
Formation Center
rice distribution flow
3. Situation of Rice Import and Rice Reserve stock
Rice Import in 2003 fiscal year
・Rice Import under the Minimum Access system based
on the Uruguay Round Agreement since 1995
・0.77 million tons of paddy ( SBS import 0.10 million
tons)
・The 0.08 million tons (the twice of usual years ) of
glutinous rice were imported to stabilize supply
・All of the 0.10 million tons of SBS imported rice were
sold out through auction although only 0.05 million
tons (half of the predicted amounts ) of SBS import rice
were sold in the previous year 2002
Rice import in 2004 fiscal year
– Until the new agreement in WTO is realized,
the Minimum Access import is maintained at
the same level of 2000 and so, 0.77 million tons
of paddy were imported in 2004.
– Also, 0.10 million tons of paddy are imported
under the SBS import system through the 4
auctions a year
Demand for the Minimum Access Rice (million tons)
・Cultivation Conversion is not enforced due to the minimum access import rice
・try to sell for processing demand at low price which is not enough for domestic rice
・redundant stock is aimed to food aids
Carry over stock in October 2002
0.95
Rice demand in 2003
for food
0.04
Import in 2002
0.77
0.45
for processing
0.21
for food aids
0.20
Carry over stock at October 2003
( increased by 0.30 from 2002)
<Including reservation stock for feed and aids>
1.27
Reserve Stock
• 1.63 million tons at June 2003
(exceeding optimal reservation level)
decreased due to strong demand by wholesaler
& production decline after August 2003
0.73million tons at June 2004
• Stock by wholesalers increased to 0.76 at February 2004 <increase by 0.43 from
preceding year>
• Reserve Stock Policy
– Optimum level = 1 million tons
by Revolving Reserve method by 0.5 million tons a year
not by Set Aside method
– from Arbitrary Negotiation (Direct trading) system to Auction trading (bidding) system
Quantity of SBS import rice
35
Quantity (thousand t)
30
U.S.A.
Itaｌy
India
Australia
Spain
Thailand
ailand
China
Pakistan
Vietnam
25
20
15
10
5
0
1
2
3
2001
4
1
2
3
4
2002
Year･Term
1
2
3
2003
4
1
2004
Selling-buying price gap of SBS import rice
400
350
Price (thousand \/t)
300
250
U.S.A buying price
Australia buying price
200
Thailand buying price
China buying price
150
U.S.A. selling price
100
Australia selling price
Thailand selling price
50
China selling price
0
1
2
3
2001
4
1
2
3
4
2002
Year・Term
Year・Term
1
2
3
2003
4
1
2004
Quantity of MA general import rice
140
120
Quantity (thousand ton)
100
Thailand
U.S.A.
Australia
China
Vietnam
80
60
40
20
0
1
2
3
4
2001
5
6
1
2
3
4
5
2002
・Term
Year・Term
6
7
1
2
3
4
2003
5
6
1
2004
Average price of MA general import price
70
Average price (thousand \/t)
60
50
40
30
20
10
0
1
2
3
2001
4
5
6
1
2
3
4
5
2002
Year・Term
Year・Term
6
7
1
2
3
2003
4
5
6
1
2004
4. Determining Factors of Rice Demand
（１）ClusterAnalysis
Overall images of price gaps between rice brands distinguished by production area
（２）Hedonic Regression Analysis
The significance of each variables as the determining factors of price gaps
Table 1 Relation between Price and Taste Evaluation ( Tokyo market )
High Price Rice
Low Price Rice
High Evaluation in Taste
Low Evaluation in taste
Hitomebore produced in Iwate pref.
Sasanishiki produced in Miyagi pref.
Hitomebore produced in Miyagi pref.
Akitakomachi produced in Akita pref.
Sasanishiki produced in Yamagata town
Haenuki produced in Yamagata town
Sasanishiki produced in Shounai town
Haenuki produced in Shounai town
Hitomebore produced in Fukushima pref.
Koshihikari produced in Fukushima pref.
Koshihikari produced in Ibaraki pref.
Koshihikari produced in Tochigi pref.
Koshihikari produced in Chiba pref.
Koshihikari produced in Nagano pref.
Koshihikari produced in Niigata town
Koshihikari produced in Uonuma town
Koshihikari produced in Ishikawa pref.
Koshihikari produced in Toyama pref.
Sasanishiki produced in Akita pref
Sasanishiki produced in Iwate pref
Hananomai produced in Yamagata town
Domannaka produced in Yamagata town
Domannaka produced in Shonai town
Sasanishiki produced in Fukushima pref
Hatsuboshi produced in Fukushima town
Kinuhikari produced in Ibaraki pref
Yukihikari produced in Hokkaido
Kirara397 produced in Hokkaido
Mutsukaori produced in Aomori town
Mutsuhomare produced in Aomori town
Tsugaruotome produced in Aomori pref
Akitakomachi produced in Iwate pref
Hatsuboshi produced in Chiba pref
Echigowase produced in Niigata pref
Niigatawase produced in Niigata pref
Yukinosei produced in Niigata pref
Table 2 Relation between Price and Taste Evaluation ( Osaka market )
High Price Rice
Low Price Rice
High Evaluation in Taste
Low Evaluation in taste
Hitomebore produced in Iwate pref.
Sasanishiki produced in Miyagi pref.
Hitomebore produced in Miyagi pref.
Akitakomachi produced in Akita pref.
Sasanishiki produced in Yamagata town
Haenuki produced in Yamagata town
Sasanishiki produced in Shounai town
Haenuki produced in Shounai town
Hitomebore produced in Fukushima pref..
Koshihikari produced in Nagano pref.
Koshihikari produced in Niigata town
Koshihikari produced in Uonuma town
Koshihikari produced in Toyama pref.
Koshihikari produced in Ishikawa pref.
Koshihikari produced in Fukui pref.
Koshihikari produced in Mie pref.
Koshihikari produced in Shimane pref.
Koshihikari produced in Okayama pref.
Hatsushimo produced in Gifu pref
Koshihikari produced in Shiga pref.
Kinuhikari produced in Shiga pref.
Koshihikari produced in Tottori pref.
Koshihikari produced in Kagawa pref.
Sasanishiki produced in Iwate pref
Hananomai produced in Yamagata town
Domannaka produced in Yamagata town
Domannaka produced in Shonai town
Sasanishiki produced in Fukushima pref
Hatsuboshi produced in Fukushima town
Kinuhikari produced in Ibaraki pref
Yukihikari produced in Hokkaido
Kirara397 produced in Hokkaido
Mutsuhomareproduced in Aomori town
Akitakomachi produced in Iwate pref
Echigowase produced in Niigata pref
Niigatawase produced in Niigata pref
Yukinosei produced in Niigata pref
Notohikari produced in Ishikawa pref
Hohohonoho produced in Ishikawa pref
Fukuechizen produced in Fukui pref
Nihonbare produced in Shiga pref
Akebono produced in Okayama pref
Yamahoushi producedinYamaguchi ref
Yamahikari produced in Yamaguchi pref
Hinohikari produced in Kumamoto pref
Hinohikari produced in Oita pref
Table 3 Results of Hedonic Regression Approach ( Tokyo Market )
( ** : statistically significant at 1% level, * : at 5% level
Variables
meaning of the variables
Regression oefficient
t-value
p-value
X1
X2
X3
X4
X5
X6
X7
X8
X9
X10
X11
X12
X13
X14
X15
X16
X17
X18
X19
X20
X21
α
appearance
smell
flavor
stickiness
softness
blend suitability
shipment period dummy
weak stem dummy
strong stem dummy
tolerance for falling dummy
tolerance for cold weather dummy
tolerance for disease dummy
Koshihikari dummy
Uonume local brand dummy
Niigata local brand dummy
1990 year dummy
1991 year dummy
1992 year dummy
1993 year dummy
1994 year dummy
1995 year dummy
定数項
0.009 **
0.0004 **
0.013 **
0.018 **
0.006 **
0.012 **
0.006 **
0.0007 **
-0.029 **
-0.053 **
-0.012 **
-0.032 **
0.023 **
0.343 **
0.111 **
0.041 **
0.088 **
0.098 **
0.126 **
0.064 **
0.008 *
9.430 **
5.09
0.22
6.41
9.68
4.91
7.26
3.00
0.26
-8.10
-13.69
-4.26
-6.13
6.67
35.74
16.55
11.24
23.83
26.55
23.89
18.70
2.43
258.65
0
0.82
0
0
0
0
0.002
0.78
0
0
0
0
0
0
0
0
0
0
0
0
0.01
0
Sample size = 1140,
R2 ( ad. Df. ) = 0.899,
AIC = -7.258
Table 4 Results of Hedonic Regression Approach ( Osaka Market
)
( ** : statistically significant at 1% level, * : at 5% level )
Variables
meaning of the variables
X1
X2
X3
X4
X5
X6
X7
X8
X9
X10
X11
X12
X13
X14
X15
X16
X17
X18
X19
X20
X21
α
Appearance
smell
flavor
stickiness
softness
blend suitability
shipment period dummy
weak stem dummy
strong stem dummy
tolerance for falling dummy
tolerance for cold weather dummy
tolerance for disease dummy
Koshihikari dummy
Uonume local brand dummy
Niigata local brand dummy
1990 year dummy
1991 year dummy
1992 year dummy
1993 year dummy
1994 year dummy
1995 year dummy
定数項
Sample size = 1800,
R2 ( ad. fd. ) = 0.862,
Regression
oefficient
0.011 **
0.003 *
0.014 **
0.018 **
0.0006 **
-0.005 **
0.006 **
0.006 *
-0.014 **
-0.009 *
-0.016 **
-0.025 **
0.034 **
0.329 **
0.091 **
0.037 **
0.084 **
0.086 **
0.118 **
0.059 **
-0.0003 *
9.837 **
AIC = -7.15
t-value
p-value
7.19
2.37
8.20
9.62
0.50
-4.97
3.88
2.24
-3.66
-1.96
-5.39
-4.33
13.45
29.27
13.32
11.24
26.22
28.43
26.86
20.95
-0.12
358.54
0
0.01
0
0
0.61
0
0.0001
0.02
0.0003
0.049
0
0
0
0
0
0
0
0
0
0
0.89
0
Table 5. Factors affecting rice price gaps
i) Taste element
Quality factor
appearance,
flavor,
stickiness,
softness,
smell
Non-Quality factor
i) advantage in marketing
element,
suitability to blend,
timing of shipment
ii) Crop Characteristics element
stem strength,
tolerance against falling,
tolerance to cold weather,
tolerance to disease
ii) brand power element
brand power in variety name
brand power in local brand name
＜Summary＞
1. Supply of Blended Rice
2. Consistency between WTO & FTA
(1)substantially all commodities,
(2) not worsening trade conditions to non FTA members
(3) complete of liberalization within reasonable period,
3. Type of FTA and Related Issues
(1) FTA, Tariff Union, EPA, Common Market, Economic Union,,
(2) rule of origin
(3)intra-industry trade and inter-industry trade
4. Coordination of MA import & Reserve Stock/Aid Scheme
5. Consistency with Grain Reserve Stock Policy among East Asia
Buying price of SBS import rice
350
Buying price (thousand \/t)
300
U.S.A.
Itaｌy
250
India
Australia
200
Spain
150
Thailand
China
100
Pakistan
Vietnam
50
0
1
2
2001
3
4
1
2
3
2002
Year・Term
Year・Term
4
1
2
3
2003
4
1
2004
Selling price of SBS import rice
600
Selling price (thousand \/t)
500
U.S.A.
Itaｌy
India
Australia
Spain
Thailand
ailand
China
Pakistan
Vietnam
400
300
200
100
0
1
2
3
2001
4
1
2
3
4
2002
Year・Term
Year・Term
1
2
3
2003
4
1
2004
Quantity of SBS import rice (nonglutinous rice)
25
Quantity (thousand t)
20
U.S.A.
Italy
India
Australia
Spain
Thailand
ailand
China
Pakistan
Vietnam
15
10
5
0
1
2
3
2001
4
1
2
3
4
2002
Year・Term
Year・Term
1
2
3
2003
4
1
2004
Quantity of SBS import rice (glutinous rice)
18
16
Quantity (thousand t)
14
12
U.S.A.
10
Thailand
China
8
Vietnam
6
4
2
0
1
2
3
2001
4
1
2
3
2002
Year・Term
Year・Term
4
1
2
2003
3
4
1
2004
Selling-buying price gap of SBS import rice
(nonglutinous rice)
350
Price (thousand \/t)
300
U.S.A buying price
Australia buying price
Thailand buying price
China buying price
U.S.A. selling price
Australia selling price
Thailand selling price
China selling price
250
200
150
100
50
0
1
2
3
2001
4
1
2
3
4
2002
Year・Term
Year・Term
1
2
3
2003
4
1
2004
Selling-buying price gap of SBS import rice
(glutinous rice)
450
400
Price (thousand \/t)
350
300
U.S.A buying price
Thailand buying price
China buying price
U.S.A. selling price
Thailand selling price
China selling price
250
200
150
100
50
0
1
2
3
2001
4
1
2
3
4
2002
Year・Term
Year・Term
1
2
3
2003
4
1
2004