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ASEAN plus Three Emergency Rice Reserve (APTERR): A Neo-liberal Solution to
Food Security

October last year, ASEAN member countries along with its three big trading partners China, South Korea
and Japan (ASEAN plus Three) concluded a regional cooperation agreement dubbed as ASEAN plus Three
Emergency Rice Reserve (APTERR). APTERR is seen as a regional cooperation tool to avert future adverse
impact of either man-made or natural emergencies that gravely affects food security in the region.

The 2008 food crisis and the impacts of Climate Change have set the condition for ASEAN to seriously
consider and put in place a regional rice reserve. Under its ASEAN Integrated Food Security Framework
(AISF), the setting-up of a regional rice reserve was identified as a major component that will help ASEAN
member countries to deal with its food security issue in the region.

Both ASEAN and the Asian Development Bank consider the creation of APTERR as a major
accomplishment in its quest for regional economic integration. It is likewise, hailed as a correct path in
confronting global food price volatility and the effects of extreme weather events in both food security
and poverty issues in the region. Much is expected from the formation of emergency rice reserve in
averting another food crisis in the future and is seen a model that can be replicated in the global level.

APTERR a Rehash Solution

The set-up of a regional emergency rice reserve is not new with ASEAN. Its first attempt was in 1979
under the ASEAN Food Security Reserve (AFSR) to shield the region from global food price fluctuation by
setting-up a rice reserve and through strengthening of food production in member states.

In the 1979 scheme, ASEAN agreed to collectively set-aside 50,000 mt of rice that can be utilize by
member countries in time of emergencies. Likewise a regional monitoring and information system to
monitor the regions rice situation was set in place and a Regional Food Security Board that will act as its
coordinating body.

However, APFSR was unsuccessful in dealing with emergencies during its existence. Aside from the very
insignificant volume of reserve that only reach 70,000mt, tedious procedure in availing rice assistance
and high cost of maintenance hampered its operation.

APTERR did not veer away from the original intent and purpose of the 1979 scheme. However, APTERR
have several distinguishing features apart from APFSR. APTERR is much broader in scope as it includes
ASEAN’s three big trading partners (China, South Korea and Japan). It is also much bigger in volume as
the agreement earmarked an emergency rice reserve of 872,000mt. It likewise, infuses a fund of US$ 4M
to make it operable. Some operational rules were also proposed but were not included in the
agreement as guidelines and mechanism were agreed to be discuss in the meeting of the coordinating
council.

APTERR’s concepts and mechanisms are mainly derived from the findings and experiences of the East
Asia Emergency Rice Reserve (EAERR) that started in 2004 ended in 2010 under the auspices of JAPAN
and supported by JICA and ADB.

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However, its effectiveness remains to be seen despite its distinct features, in its operation in the coming
years as it face the challenges of continued rice price volatility and impacts of climate change in food
production.

APTERR more than an EMERGENCY TOOL

The global food crisis in 2007/2008 set the impetus for ASEAN to draw an integrated food security
framework for the region to address its impact in the socio-economic and political stability of the region.
In 2009, ASEAN concluded the ASEAN Integrated Food Security Framework (AIFS) and subsequently
drafted its Strategic Plan of Action on Food Security (SPA-FS). Its goal is to ensure long-term food security
and improve livelihood of farmers in the region.

Among the objectives of AIFS strategic action plan is the operationalization of a regional food emergency
relief arrangement. APTERR is the concretization of this objective.

However, APTERR goes beyond its emergency food reserve function. Taking its cue from the experience
of the East Asia Emergency Rice Reserve (AERR) from 2004 to 2010, APTERR envisions operating not only
as the region’s food relief center but also as a rice price and supply stabilizer in the region. Relief
assistance is only one of the three functions that it will fulfill. The other two functions of APTERR is
outside of the relief assistance and more related to stabilizing the regions rice supply and market
through facilitation of rice supply among member countries utilizing both loans and commercial
transactions. A big chunk of the earmarked rice reserve is intended for this purpose.

Likewise, it is interesting to note that APTERR envision to include other food commodities in the future
and promotes the establishment of a futures market as a long term solution in stabilizing prices and
mitigating risks and uncertainties in the regions food supply.

APTERR’s NEOLIBERAL FRAME

Although APTERR’s existence was a reaction to the impacts of the global food crisis, its operational
concepts and mechanisms remain anchored on Neoliberal economic framework. ASEAN’s approach in
ensuring regional food security continues to be predominated by the role of the market and the private
sector in both stabilizing the supply and price of food in the region.

ASEAN analysis of the global food crisis downplayed the role of state intervention in curbing out the
effects of the crisis in food security. Protectionist policies and market regulations are rejected as tool to
resolve the crisis and counter posed regional cooperation under free market as the most viable solution.
As such, regional cooperation projects like APTERR is ensured that its operation and mechanism will not
be price and market distorting but will further private sector participation in the regional relief and rice
reserve operation.

This can be glean from APTERR’s several mechanisms such as opening up relief and storage maintenance
of rice reserve to the private sector. Its function as a rice supply broker matching supply needs with
current supply in the region base on market prices and promotion of commercial transactions in securing
rice supply attest to the dominance of pro-market principles in the operation of the present emergency
rice reserve.

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Likewise, APTERR’s conclusion last year seems to be driven primarily by economic interest beyond
ASEAN. In particular, it is obvious that the prime mover for the realization of APTERR came from Japan
and its big partners in Asia. The dramatic increase in earmarked reserve and even APTERR’s initial funds
for operation are primarily due to its big three partners in Asia. Each contributed US$ 1M in the
endowment fund and earmarked more that 300,000 mt. of rice in the rice reserve.

As such, there seems to be a grain of truth to that observation that APTERR is a virtual dumping ground
for excess rice supply of these big three trading partners in order to protect their respective economies.
Sending most of the excess supply in the reserve can protect the Big Three’s domestic market from price
fluctuations. If this is so, the ASEAN region’s rice price may be undermine as it become competitive with
region’s own rice market and price.

Lastly, in terms of APTERR’s financing, ASEAN member’s annual commitment in the endowment can
cause further financial burden to each member country as each country commits to shoulder the
financial cost of maintaining the reserve spread within individual countries. More so, the scheme of the
regional reserve as a rice supply broker can also further poor member countries fiscal standing as it is
force them to fulfill its commitment through loans and borrowings.