Government Announces '2021 Rice Harvest Season Measures'
"Supply and Demand Management to Prevent Sharp Rice Price Fluctuations During Harvest"
On February 18, when the government decided to supply an additional 60,000 tons of government rice to stabilize rice supply and demand, an official at the public reserve rice storage warehouse in Ochang-eup, Cheongju-si, Chungcheongbuk-do, is seen inspecting the condition of the stored rice. (Image source=Yonhap News)
[Sejong=Asia Economy Reporter Moon Chaeseok] The government is implementing measures to support stable rice shipments from farms during the harvest season by purchasing 350,000 tons of public stockpiled rice and providing 3.3 trillion won in rice purchase funds to mountain region distribution companies.
The Ministry of Agriculture, Food and Rural Affairs announced on the 11th that it held the Grain Supply and Demand Stabilization Committee chaired by Vice Minister Park Young-beom on the 8th and prepared the "2021 Rice Harvest Season Measures." First, the plan was made based on this year's expected rice production announced by Statistics Korea on the 8th, and the final production volume to be announced by Statistics Korea on the 15th of next month will be reflected.
According to Statistics Korea, this year's expected rice production is 3.83 million tons. The expected production volume increased by 320,000 tons compared to last year. However, damage from pests and diseases in some regions has increased compared to the average year, and there remains a possibility that crop conditions may change depending on weather conditions. The mountain region rice price was 56,803 won per 20kg as of the 5th, higher than 54,822 won last year and 47,978 won in 2019.
The Ministry of Agriculture, Food and Rural Affairs plans to purchase 350,000 tons of public stockpiled rice during the harvest season to stabilize rice supply and demand this year. It will provide 3.3 trillion won in rice purchase funds to mountain region distribution companies such as Rice Processing Complexes (RPC) and Drying and Storage Facilities (DSC).
Furthermore, if market isolation requirements arise under the supply and demand stabilization system according to the Statistics Korea announcement on the 15th of next month, the government plans to supplement measures such as market isolation and decide alternatives through discussions with related ministries and the Grain Supply and Demand Stabilization Committee. Since the Grain Management Act was amended last year, the government has established a system to formulate supply and demand stabilization measures by October 15 each year and determine purchase volumes based on excess production.
According to the stabilization measures, if excess production exceeds 3% of production volume or if harvest season prices fall more than 5% compared to the average year, the excess can be purchased. However, considering the impact of COVID-19, rice produced from last year to this year can be purchased even if prices fall more than 5% compared to the previous year. Conversely, if prices continuously rise due to private stock shortages or if the price increase rate maintains over 1% for three consecutive periods, government stockpiled rice can be sold on the market.
Additionally, the government plans to purchase desired quantities only for rice damaged by pests, diseases, or black water, provide insurance payments to disaster insurance subscribers from next month, conduct special inspections for mixed domestic-imported rice and mixed production years for two months starting next month, and focus on inspecting the distribution and management status of government stockpiled rice.
A Ministry of Agriculture, Food and Rural Affairs official said, "Going forward, the ministry will reassess the supply and demand situation considering the final rice production volume and mountain region rice prices to be announced on the 15th of next month and prepare additional supply and demand stabilization measures if necessary."
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