Pact prompts smuggling concern

ASEAN FREE TRADE ACCORD 'MAY LEAD TO BLACK MARKET RICE'

3/01/2010

The Agriculture and Cooperatives Ministry has aired concerns about smuggled rice from neighbouring countries after the full implementation of the Asean Free Trade Area (Afta) agreement.

Key elements of the agreement between members of the accord, which came into force on Friday, are zero tariffs and unlimited quotas for 23 farm products which include rice. The full trade liberalisation applies only to six members at present - Thailand, Brunei, Indonesia, Malaysia, the Philippines and Singapore. Burma, Cambodia, Laos and Vietnam will join in 2015.

The ministry is concerned gangs may take the opportunity to smuggle cheaper rice from neighbouring countries which at present do not benefit from the free trade pact into Thailand for exporting to the five other Asean members, according to Agriculture and Cooperatives Minister Theera Wongsamut.

Vichien Phuanglamjiak, vice-president of the Thai Rice Farmers Association, agreed with the ministry's assessment, saying that the trade liberalisation on rice will possibly encourage traders of bagged rice to use cheaper rice from Asean neighbours instead of locally produced rice.

The problem might not surface now when the rice price is high but it would emerge when the price drops and exporters opt for cost-cutting measures, he pointed out.

Mr Theera said the ministry had requested customs and security authorities at border checkpoints to stay alert to possible smuggling.

Tosapol Wangsilabut, chairman of the Federation of Thai Industries in Ayutthaya, urged the government to come up with better measures to boost competitiveness for rice farmers in the long run when they will face stiffer competition from other Asean members, especially Vietnam.

Thai farmers are increasingly growing rice which gives quick yields but had relatively poorer qualities including shorter storage time, he said.

He urged the government to improve rice strains for farmers, enhance irrigation systems, help farmers cut costs and increase productivity, and improve cultivation techniques.

"Rice cultivation is the main occupation of Thai people. It is undeniable that the government does not pay much attention to it today," Mr Tosapol said.

However, Mr Theera insisted that Afta would give benefits for Thailand which has an advantage on productivity over other countries in the region.

With Afta, Thailand would be able to export more farm products and foods to the Asean market at lower costs.