Asean Plus Three Emergency Rice Reserve
Monday - Friday 08:30 - 17:00
Saturday and Sunday - CLOSED
2nd Floor, Innovation Bldg., Office of Agricultural Economics, Kasetsart University Complex, Phahonyothin Road, Ladyao, Chatuchak, Bangkok 10900 Thailand
The ASEAN Plus Three Emergency Rice Reserve (APTERR) is a regional cooperation scheme aimed at strengthening food security and reducing poverty within the ASEAN Member States, the People’s Republic of China, Japan, and the Republic of Korea.
APTERR directly addresses the immediate threats to food security in the ASEAN Plus Three
- Disasters, both natural and artificial, threaten food supplies at the local level, and if sufficiently severe, even at the national level.
- Market volatility greatly amplifies the risks posed by calamities; moreover, a severe price increase can itself trigger a food crisis, as experienced worldwide in 2008.
APTERR was established under an agreement signed by the Ministers of Agriculture and Forestry of the 13 member countries of the ASEAN Plus Three on 7 October 2011 in Jakarta, Indonesia.
The history of APTERR dates back to the ASEAN Food Security Reserve (AFSR) Agreement of 1979. The agreement instituted the earmarked rice reserve system, which was called the ASEAN Emergency Rice Reserve (AERR). The total stocks under the AERR were 87,000 tons. However, no releases were effectively made under the AERR until 2003.
In 2003, the ASEAN Plus Three Ministers of Agriculture and Forestry undertook a pilot project called the East Asia Emergency Rice Reserve (EAERR). The EAERR established both earmarked and stockpiled emergency rice reserves.
In the case of ASEAN countries, earmarked stocks were mobilized from the AERR. The Plus Three countries each made a new commitment for earmarking rice reserves. Funding for the EAERR was provided by Japan through ASEAN Trust Fund while in-kind support was extended by Thailand, in cooperation with other ASEAN Plus Three countries.
The pilot project ended in 2010. By then, the EAERR had distributed nearly 3,000 tons of stockipiled rice to disaster victims and poor households in Cambodia, Indonesia, LAO PDR, Myanmar, and the Philippines. The EAERR also released 10,000 tons of earmarked stocks from Viet Nam to support the recovery of the Philippines from a devastating typhoon in 2010.
Based on the experience of the pilot project, the ASEAN Plus Three countries decided to establish the emergency rice reserve scheme as a permanent mechanism.
There are two types of rice reserves provided under APTERR:
- Earmarked emergency rice reserves
- Stockpiled emergency rice reserves
Rice reserved under APTERR must be fit for human consumption based on international food safety standards.
Earmarked emergency rice reserves are specific quantities of milled rice which remain owned and/or controlled by the government of the earmarking country for the purpose of meeting emergency requirements of one or more APTERR member countries.
The earmarked stocks total 787,000 tons, consisting of 87,000 tons from the ASEAN member countries and 700,000 tons from the Plus Three countries. The breakdown by country is as follows:
Stockpiled emergency rice reserves are rice voluntarily donated to APTERR in the form of cash (termed stockpiled cash) and/or physical rice stocks (termed stockpiled rice) which are owned collectively by the APTERR member countries and managed by the APTERR Secretariat under the supervision of the APTERR Council.
APTERR releases are made in cases of emergency. An emergency is defined as “the state or condition in which an APTERR member country, due to extreme and unexpected calamity, is unable to cope with the state or condition through its national reserve and is unable to procure the needed supply of rice through normal trade.”
APTERR will address rice shortfalls due to the following conditions:
- Emergencies that threaten food availability at the national level.
- Acute emergencies that threaten accessibility of food for affected households. Such emergencies may be localized, wherein a subset of the population may requirehumanitarian food assistance, whether or not sufficient rice stocks are available at the national level.
Corresponding to specific distinctions of emergencies are three APTERR programs:
- Tier 1 involves the release of earmarked stocks under a prearranged scheme to address problems of food availability. This program is designed for anticipated emergencies.
- Tier 2 involves the release of earmarked stocks for emergencies not addressed by Tier 1. This program is designed for unanticipated emergencies.
- Tier 3 involves the release of stockpiled emergency rice reserves to address problems of food accessibility. This program is designed for acute emergencies and for other humanitarian responses to food insecurity.
The pre-arranged release of rice reserves under Tier 1 is formalized as a forward contract, stating the specific quantity and grade of rice, pricing method, terms of payment and delivery, and other requirements between a supplying country and a recipient country. Delivery of rice from the supplying country will be made in the event of an emergency in the recipient country, with payment based on the prevailing international market price. The amount of rice under a forward contract is based on an estimate of rice shortfall in the event of an emergency over the medium term.
The release of rice reserves under Tier 2 is made available to an APTERR member country to meet an emergency requirement of rice under other arrangements. This program provides for the release of rice reserves beyond what is already arranged under Tier 1. Delivery follows an on-the-spot agreement between a supplying country and a recipient country. Pricing is similar to Tier 1: payment can be made in cash or through long-term loan or grant, based on mutual agreement of the countries involved.
The release of rice reserves under Tier 3 is a donation of rice as humanitarian assistance to a recipient country affected by calamity upon their request in response to acute emergency. In special cases, rice distribution can be fast-tracked under automatic trigger. Moreover, rice stocks may be also released for poverty alleviation and malnourishment eradication programs to address other humanitarian purposes.
Releases from APTERR are authorized only in the event of an emergency. Tier 1 releases are limited by the quantity of stocks stated in the forward contract. Furthermore, the total releases by any APTERR member country over each 12-month cycle under Tier 1 and Tier 2 may not exceed its respective earmarked stock commitment. However, a member country must replenish its earmarked reserves back to its original commitment on an annual basis. Tier 2 and Tier 3 releases are limited by the estimate of rice needed to address the emergency.
Day-to-day management of APTERR operations is undertaken by the APTERR Secretariat, which is under the supervision of the APTERR Council. The Secretariat is based in a host country selected by the Council and is headed by a General Manager appointed by the Council.
The Council is composed of one representative from the government of each APTERR member country. The responsibilities of the Council include deciding on the approval of releases from APTERR stocks by consensus;making decisions by consensus; and meeting regularly at least once a year, including convening ad hoc meetings.
To enable APTERR to function, financial and other resources (including stockpiled or earmarked rice as well as management support) are sourced from cash and in-kind assistance provided by member countries.
Other countries and donor organizations may provide donations for the stockpiled emergency rice reserves.
The earmarking country stores the earmarked stocks. Based on proven viability under the EAERR, the stockpiled rice is stored by a host country (a member of the ASEAN Plus Three), under contract with the APTERR Secretariat. Currently, there is no provision for an APTERR warehouse.
For earmarked stocks, storage responsibility is a permanent commitment of the member country. For stockpiled rice, the host country remains responsible until the end of the storage contract. Beyond this, the APTERR Secretariat is in charge of extending storage or releasing the stockpiled rice.
In any case, the agency storing the APTERR stocks guarantees that quality standards are maintained.
The stocks released by APTERR are distributed by the national food security agency of the member country affected by an emergency.
Tier 1 and Tier 2 releases would likely be used to augment the national food security reserves of the affected country.
Tier 3 releases are directly distributed to needy households by the public food aid agency in the affected country. Distribution may also be done in partnership with international organizations (e.g., the World Food Programme) and nongovernmental organizations.
Following its signing in October 2011, the APTERR Agreement entered into force on 12 July 2012. Preparations are under way to expedite formal launch of APTERR in early 2013.