GWACHEON: 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 attempts to recover from an outbreak of foot and mouth disease late last year that drove up meat prices.
"A decision (on allowing Canadian beef imports) is likely to be made through bilateral talks instead of a WTO panel ruling. The decision is seen coming this quarter," Yoo, 54, a former member of the parliament, told Reuters in an interview late on Thursday.
Global grain market instability is worsening and prices are likely to rise due to soaring demand globally, said Yoo, who is also Asia general meeting chairman of the UN Food and Agriculture Organization (FAO).
S outh Korea, the world's fourth-largest grain importer, is responding to high prices with a range of measures such as buying US 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 percent 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 5 percent 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.
In 2011, South Korea will allow rice imports of 347,658 tonnes, compared to 327,311 tonnes bought last year.
The rice import quota is set to grow by about 20,000 tonnes per year to 408,700 tonnes by 2014, according to ministry data.
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 percent each," Yoo said, adding 40,000 hectares 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.
The country is looking to set up grain firms in the United States, Brazil, Ukraine, Siberia and Southeast Asia. Through a consortium of state-run Korea Agro-Fisheries Trade Corp and private firms -- Samsung C&T , STX and Hanjin Transportation -- it aims to import four million tonnes of grains and beans in 2015.
South Korea will likely allow imports of Canadian cattle under 30 months of age when it lifts the import ban, similar to rules covering US Beef, Yoo said.
Canadian Agriculture Minister Gerry Ritz said last month that the two countries were close to resolving the import dispute ahead of any decision from a World Trade Organization 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 percent came from Australia and 32 percent from the United States.
Seoul has battled its worst-ever foot-and-mouth outbreak since November last year, culling a third of its hog population and about five percent of cattle to contain the disease and costing the country nearly 3 trillion Korean won ($2.76 billion).
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.
"Pork prices are still 20 percent higher than those before foot-and-mouth, and seen to remain at such levels for a while. But the tariff-free imports are soon to be released into the market, and will weigh on prices," Yoo said, referring to 110,000 tonnes of imports that it allowed in during the first half of 2011 free of the usual 25-percent tariff.
The central bank on Wednesday lifted its forecast for 2011 annual consumer inflation to 3.9 percent from its December forecast of 3.5 percent and last year's 2.9 percent.
The ministry would closely monitor prices to decide if it would extend the tariff-free pork import to the year end, Yoo added.
The government would 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. But South Korea would not impose an outright ban, he said.
The Korea Food and Drug Administration said on Thursday that it would ask the Japanese government for radiation safety documentation on imports of food from eight areas of Japan.
The new rules are on top of its import ban on food from five prefectures of Japan.
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