Assemblyman Seo Samsuk: "Urgent Need for Scenario-Based Response Strategies in JaeGomi Market Isolation"

Bid Announcement for Isolation of Only 100,000 Tons of Gugok, Market Isolation Effect Insufficient

[Sinan=Asia Economy Honam Reporting Headquarters Reporter Choi Jae-kyung] Following the announcement on the 7th of the bidding notice to promote 100,000 tons of rice from the 450,000 tons of rice market isolation volume recently announced by the government, claims have emerged that scenario-based response strategies are necessary for price stabilization.

The government plans to conduct the bidding on the 19th and begin purchasing from the 20th, following the announcement.

According to the status of Nonghyup's rice inventory submitted by Representative Seo Sam-seok to the Nonghyup Central Association, as of September 2022, there was 193,000 tons of regular rice, which is an excess of 123,000 tons compared to 70,000 tons in the same period the previous year. In addition, there may be quantities held by private RPCs and farmers, which are not captured in government statistics, thus becoming a variable in the stock of old rice.

Ultimately, there is at least 123,000 tons of rice inventory existing in the market.

Representative Seo Sam-seok (Democratic Party, Yeongam Muan Sinan), a member of the National Assembly's Agriculture, Forestry, Livestock, Food, and Maritime Affairs Committee, stated on the 7th, “The 100,000 tons of old rice that the government plans to promote is less than the inventory held by Nonghyup as of the end of September,” adding, “If tailored response measures according to the situation are not prepared, the market isolation effect, which was achieved through the earnest demands of the National Assembly and farmers, could be in vain.”

The Ministry of Agriculture, Food and Rural Affairs is reportedly judging that 350,000 tons of new rice plus 100,000 tons of old rice is sufficient to achieve a price support effect.

Based on the price rise trend, such as the price of a 40kg bag of paddy rice rising from about 43,000 won before the market isolation announcement to the 50,000 won range after the announcement, it is estimated that many inventory-holding Nonghyup branches and private entities may not submit old rice for reverse auction bidding.

Representative Seo Sam-seok said, “Among the six cases of market isolation over ten years from 2011 to 2020, only in 2017, when the volume, timing, and purchase price were all aligned, was there an effect,” and strongly urged, “Scenario-based response strategies assuming whether the old rice volume participating in the bidding is less than or exceeds 100,000 tons are urgently needed.”

He continued, “If the old rice bidding volume falls short of 100,000 tons, additional purchases of 2022 new rice should be made equivalent to the unsold volume, and in the opposite case, since the old rice estimate is incorrect, an emergency plan to absorb the excess volume must be established.”

Finally, Representative Seo emphasized, “The Ministry of Agriculture, Food and Rural Affairs and Nonghyup must proactively prepare tailored strategies according to the situation in advance and make every effort to drive rice prices.”