[Exclusive] "Will Recommend Reconsideration of Grain Management Act Amendment to the President"… Prime Minister Han's National Address

Prime Minister Han Duck-soo is delivering opening remarks at the 'Regulatory Sandbox Innovative Companies Meeting' held on the 15th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Yoon Dong-joo doso7@

Dear fellow citizens,

Today, with a truly heavy heart,

I would like to share the government's position on the ‘Partial Amendment to the Grain Management Act’ passed by the National Assembly on March 23.

To get straight to the point,

this ‘Grain Management Act Amendment’

is a “forced purchase law for surplus rice” that requires the government to buy all the rice overproduced by farmers regardless of how much rice our people consume.

Such a law is of no help

either to farmers or to the development of agriculture.

So far, the government has

continuously explained to the National Assembly

that there are many problems and side effects related to this amendment,

and has earnestly requested reconsideration of the bill.

This bill

has raised concerns among many experts in the agricultural sector

that it could undermine the self-sustainability of the rice industry and agriculture.

Farmers' organizations such as the Korea Farmers Federation and the Rice Farmers Association

have also voiced opposition to the bill.

Despite this situation,

I deeply regret that the National Assembly unilaterally passed the ‘Grain Management Act Amendment.’

Dear citizens,

Rice is the staple food of our people,

and the core of agriculture and the rural economy.

If it is truly a way to revive agriculture,

we can spend 10 trillion won, 20 trillion won, or more.

However, this approach is unacceptable.

Our current rice industry is already

repeatedly facing overproduction and price instability.

The ‘Grain Management Act Amendment’

is feared to push the rice industry into even greater crisis.

After gathering opinions from various sectors

and holding a government-party consultation today,

we agreed that it is appropriate to inform the public about the harms of this bill

and to request reconsideration from the National Assembly.

Therefore, I take this opportunity today

to explain in detail to the public the problems with the ‘Grain Management Act Amendment.’

The executive branch's request for reconsideration of a problematic bill

is a constitutionally guaranteed procedure for proper governance.

First, the amendment paralyzes the market's supply and demand adjustment function.

The damage will fall squarely on the farmers.

Currently, the government

implements ‘rice market isolation’ by purchasing surplus rice when prices collapse due to repeated overproduction.

However, this measure

should be carried out only at a minimal level in urgent situations where the market fails to function properly.

Buying rice unconditionally and permanently despite surplus

further disables the market's supply and demand adjustment function.

Oversupply will worsen,

and prices will fall further.

Many farmers are currently striving to increase rice consumption

and produce high-quality rice, but

the amendment will remove even the reason to do so in the future.

If the amendment is implemented,

the current surplus of about 230,000 tons

is expected to exceed 630,000 tons by 2030, and

rice prices are projected by the Korea Rural Economic Institute to remain in the low 170,000 won range,

lower than now.

The damage will be borne entirely by farmers,

especially small-scale farmers who will suffer the most.

Contrary to the stated purpose of stabilizing rice prices and protecting farmers,

the amendment will drive our agriculture to ruin.

Second, the resources that should be invested in future agriculture will disappear.

The financial burden from the amendment exceeds 1 trillion won annually.

With this amount, we could establish 300 advanced smart farms,

train 3,000 young venture farmers,

and nurture 50,000 talents who will lead the future of rural areas.

If resources meant to strengthen agricultural competitiveness and foster young farmers

are poured into purchasing surplus rice,

innovation in rural areas will become even more distant.

Storing overproduced rice in government warehouses for years

and disposing of it as ethanol or feed at prices less than one-fifth or one-tenth

is a waste of taxpayers' money.

Precious agricultural resources should be used

to support young farmers who are the future leaders of rural communities

and to develop agriculture as a future growth industry.

Third, it does not help strengthen genuine food security.

Food security is indeed important,

especially given recent climate change and the Ukraine war,

which have destabilized international grain supply chains.

However,

we must consider what true food security means.

Producing more rice, which already has a high self-sufficiency rate,

is not a reasonable decision.

Rather, expanding domestic production of crops like wheat and soybeans,

which are heavily dependent on imports,

is a decision that benefits the nation and farmers.

The era of measuring food security by rice alone is over.

We must balance supply and demand across other sectors such as livestock products, fisheries, and processed goods,

in line with changing consumer food demands.

The amendment

only leads to producing more surplus rice

and does nothing to increase the self-sufficiency of deficient crops.

Fourth, excessive government intervention in agricultural supply and demand

is a policy that has already failed overseas.

In the 1960s, Europe implemented price guarantees,

but discontinued them due to side effects such as increased production, price drops, and reduced farm incomes.

Thailand also implemented price intervention policies in 2011,

but abolished them within three years due to failures in supply and demand adjustment and excessive fiscal burdens.

‘Populist policies’ that go against market principles can never succeed.

This amendment was already opposed by the previous government for these reasons.

Reintroducing it with the argument that ‘it was wrong then but right now’

is unfair to the taxpayers.

Dear farmers,

the previous government caused a sharp drop in rice prices due to policy failures.

Our government is firmly committed to stabilizing rice prices and restoring supply-demand balance.

Last year, through the largest market isolation measure during harvest season of 450,000 tons,

we quickly stabilized rice prices.

Today, the government and ruling party seriously discussed

the future development of agriculture and rice supply stability.

Our government will not pursue policies that distort the market,

but will balance food production supply and demand

through various support policies that truly revive agriculture.

We will focus on strengthening the competitiveness of the rice industry,

maximizing rice consumption demand, and enhancing the high-quality rice production system.

We must no longer produce rice alone.

We will also provide direct payments to farmers cultivating diverse crops such as wheat and soybeans.

We will revitalize the powdered rice industry that can substitute imported wheat.

We will boldly invest and support the future development of agriculture and rural areas.

Dear citizens,

issues related to food and agriculture, rural areas, and farmers' lives

should not be exploited for political gain.

The amendment

does not benefit anyone.

The government cannot take a path destined to fail.

Therefore, to protect the development of our rice industry and the future of agriculture,

the government intends to recommend to the President

a request for reconsideration of the ‘Grain Management Act Amendment.’

This decision

is a determination to serve the national interest and farmers,

and to take the right path,

and I earnestly ask the National Assembly, the agricultural sector, and the public

to understand this.

Going forward, the government will make greater efforts

to truly support agriculture, the life industry, and rural communities, the foundation of our society.

Thank you.