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Increased Rice Imports Upset Farmers in South Korea

South Korea's rice farmers are angry over the government's agreement to import more rice. And a new budget airline has taken to the skies in Singapore, part of a growing industry in Asia.

South Korea will allow rice imports of up to eight percent of domestic consumption by 2014.

The agreement was reached under World Trade Organization auspices, between South Korea and rice exporting countries such as China, Thailand and the United States. A 1994 global free-trade agreement allowing Korea to limit rice imports to four percent of domestic consumption expires this month.

The negotiations have angered South Korea's debt-laden farmers, who fear that imports of cheaper rice will worsen their situation.

But Choi Nak Gyoon, an economist at the Korea Institute for International Economic Policy, says the government will try to reduce any damage to the country's agricultural sector.

"Firstly, it can support the farmers through direct cash payment. Secondly, the price of rice products [in Korea] is very high compared to those of neighboring countries," said Mr. Gyoon. "So the agricultural sector must increase its price competitiveness and productivity."

Singapore-based budget airline Jetstar Asia launched its first flight last week, flying from its home base to Hong Kong. The carrier, which is partly owned by Australia's Qantas Airways, is due to fly to Taiwan and Thailand for the first time later this month, and flights to other Asian destinations are set to start in January. Jetstar Asia says it will provide 140 flights a week to Southeast Asian and Australian destinations.

Singapore is building a $27 million terminal catering to discount carriers, scheduled to be completed in 2006. Singapore welcomes discount carriers because their cheaper air fares encourage more tourists to visit the country.

At the same time, Malaysia's AirAsia, Southeast Asia's largest discount carrier, has ordered 40 aircraft from plane maker Airbus, the largest-ever order placed by an Asian carrier. Some economists say the purchase will ensure that AirAsia remains the dominant discount carrier in Asia, staying ahead of its Singapore-based rivals.

AirAsia is expanding its fleet to keep up with a growing demand for air travel. It will begin flying in 2005 to China, where the government is relaxing restrictions on the freedom of the nation's more than one billion people to travel abroad.