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Synthesis

Session 1-4

Dr. Lourdes Adriano,


Advisor (Agriculture, Food Security,
& Rural Development), ADB
E-mail: ladriano@adb.org
Outline
 Setting the context: “Unique” Opening Remarks
 What’s the issue? Sources for variability
 What’s the story
Session 1: Market situation and outlook
Session 2: Was trade the culprit or can trade
reduce volatility?
Session 3: What if we have a big disaster?
Session 4: Options for price discovery
Summary and takeaways
 Segue to Sessions 5 & 6
Setting the context:
Q: Is the ASEAN Rice Trade Forum like
any other forum? Yes and No
A: YES & NO
 Yes: Platform for discussing particular issue/s about
regional rice market
 Issue: Extreme rice price volatility and how do we prevent
extreme price swings (up & down)

 No: Forum is a “pilot” for AFSRB (in context of the


ASEAN Integrated Food Security Framework)
 Rice market information (gather, share, exchange)
 Rice market intelligence: platform for informed dialogue
with major stakeholders in the regional rice value chain
 Part of participatory-based policy planning process
Setting the context: backdrop &
principles for the exchange of
views
 Asian agriculture competitiveness will soon be
challenged: needs to shape up or lose it
 Regional context: lay the roots for sustainable
competitiveness; requires working together 2015
ASEAN becomes one regional economic
community
 Priority agenda # 1: Rice because its still the staple
food; but dialogue needs to be broadened-> mutli-
stakeholders  AIFS but key would be trade (“balck
box”)
 Discussions have to be science- and evidence-
based
What’s the issue?

•Extreme rice price swings (up & down) in the


regional rice market
•Focusing on the regional (ASEAN) rice market
(trade- “black box”)
What are the sources of variability
and can ASEAN do something
about it?
Rice Prices in 2008, Export Restrictions and Panic Buying

•Government policies may have influenced the price


surges; climate change
•ASEAN can provide regional public service:
coordinated & coherent policies
What’s the story & what are the
takeaways?
1. Session 1: Rice market situation (2011/12) and
outlook (2011-2021) – globally & ASEAN
2. Session 2 Scenario: Is trade the culprit or can
trade reduce volatility?
3. Session 3 Scenario: What if a natural calamity
strikes? Will the APTERR, a regional rice safety net,
be adequate to contain price spikes?
4. Session 4: What other options may be considered
for managing rice price risks and volatility?
Session 1: Significance of ASEAN in
World Rice Markets from to present and till
2022 (as it was in 1912)
100%
90%
80%
70%
60%
50%
40%
30%
ROW
20% ASEAN
10%
0%
Session 1: Downward price
range trend
Session 1: Upward rice net
trade
Session 1:Crystal ball versus
AGRM/Rice flow model
Session 2: Was trade the culprit or
can trade reduce volatility?
 Trade was not the culprit: lack of information about
supply-demand leading to government imposing trade
restrictions & consumers started hoarding; low global
stocks but certainly not about rice shortage
 What is a price shock? 2007-2008, world rice prices rose
from 117% to 149%; How about price slumps
 Why are price surges not good? Poverty increases
 Price variability of < 10% :“stable trend”
 Using the rice flow model, trade can reduce volatility.
 How do we build the confidence on trade?
Session 2: Information shared,
validated, and more
 What did we learn: (i) ASEAN economies generally self-sufficient
in rice; same exporters & importers since 1912- comparative
edge; changes in competitiveness may be due to policy
measures; (ii) look at concerns of actors in rice value chain
what would make them more competitive? (iii) views from
farmers’ groups, traders, national government
 Ok on ASEAN’s food security response (AIFS: emergency rice
reserve, fostering trade, market information) was appropriate but
can be more proactive
 Suggests AIFS + on the basis of 2 criteria: (i) effect on reducing
volatility, and (ii) transactions costs of implementation
 AIFS + suggestions: (i) trade facilitation (forward contracting
reduced elf-sufficiency for guaranteed imports, talks with India);
(ii) market information & market intelligence; (iii) national &
regional rice stocks
 Other suggestions: (i) code of conduct on how to relate during
times of crisis, (ii) investments for small scale farmers
Session 2: What’s the role of the
forum?
 Information sharing & verification

 Gathering information from various stakeholders

 Understanding the views & concerns of stakeholders in the rice


chain

 Gain knowledge: rice flow model not just for market


information but for market intelligence (e.g., what are the
possible impact of government policies if it invests on making
small scale farmers more productive? )

 Question: Should the forum be a platform for discussing &


soliciting policy recommendations based on informed
analysis?
Session 3: What if we have a big
natural disaster? Would APTERR be
sufficient?
Session 3: Additional learning
from the forum
Session 4: Options for price discovery
& price risk management
Sessions 1-4 Takeaways- Forum to
unbundle trade as a “black box”
What’s next & ways forward

Enter Sessions 5 & 6


For information, contact:
Lourdes Adriano
ladriano@adb.org