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Interview: OREC proposal "inappropriate" in current situation
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20:52, May 06, 2008

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Raising up the idea of setting up an" organization of rice exporting countries" (OREC) at a time when worry is high about a possible global food crisis, should be deemed inappropriate, and may not be beneficial to the rice exporting countries and their farmers in long term, Ph.D. He Changchui the Asian regional head of the Food and Agriculture Organization of the United Nations (FAO) told Xinhua Tuesday.

Dr. He, the Bangkok-based Assistant Director-General and Regional Representative for Asia and the Pacific of FAO, said the idea, floated by Thai Prime Minister Samak Sundaravej on April 30 and incurring much controversy domestically and internationally, though by now is only a verbal proposal with no details provided, could easily lead to suspicions that the rice exporting countries would take measures to curb rice export.

In a time when the global food market is experiencing continuous price hikes, hoarding and panic buying, the proposal is inappropriate and could double the current plight, said He in a telephone interview with Xinhua.

Even in long term, an "OREC", comprising Thailand, Cambodia, Laos, Myanmar and Vietnam as Samak proposed, may not be of benefit to the rice exporting countries, because rice as a commercial, unlike oil, is subject to weather and other volatile elements, and relies more on an open market and convenient channels, according to He.

If Thailand and other major exporting countries impose any control measure on export, other countries in the world could take the initiative to grow rice, and it would be a blow to the economies and farmers' income in these traditional rice exporting countries like Thailand, said He.

He noted that hoarding and panic buying of rice and other staple food products due to recent measures of curbing export in some agricultural-product exporting countries, is one of the causes of the food shortage and price hikes.

He said FAO has always encouraged Thailand to continue its policy on an open rice market.

Last year, Thailand, the NO. 1 rice exporter in the world, recorded an export volume of 9.5 million tons, some one-third of the world's total, and Vietnam followed with five million tons. The export rice price in Thailand has almost tripled in the past three years.

The idea of setting up a bloc of major rice exporting countries to use their prestigious positions in the market to influence world rice prices, were first put on the table at a meeting of senior government officials from major rice exporting countries from ASEAN and India in 2002, but to no avail, as the countries realized the difficulty of coordinating actions of different producers on setting up prices for rice as the OPEC does to oil.

When Samak raised up the issue when international organizations including FAO are warning about an imminent global food shortage, it was met with heavy criticism, especially by rice-importing countries like the Philippines, which accused it of an "anti-poor" approach.

By now Cambodia has voiced support for Samak's idea, saying it may help stabilize rice prices in the world market.

Source: Xinhua

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