[Exclusive] Urgent Crisis in Seafood Consumption Due to Japan's Contaminated Water Discharge... Government to Release Up to 60 Billion Won in Contingency Funds

Request for Contingency Funds to the Ministry of Economy and Finance by the Ministry of Oceans and Fisheries over Japan's Contaminated Water Discharge
Considering up to 60 Billion Won Investment to Stabilize Seafood Prices

Following the Japanese government's official decision on the 24th to discharge contaminated water from the Fukushima Daiichi Nuclear Power Plant into the ocean, our government has confirmed that it is preparing a large-scale response to promote seafood consumption by immediately allocating hundreds of billions of won in contingency funds. This measure aims to promptly prevent the spread of consumer anxiety and the resulting decline in seafood consumption, separate from the scientific safety of the contaminated water discharge.

According to a compilation of reports by Asia Economy on the 23rd, the government is actively considering the allocation of contingency funds for 'seafood value and consumption promotion.' The Ministry of Oceans and Fisheries recently requested related contingency funds from the Ministry of Economy and Finance, which is reportedly positively considering the budget allocation, taking into account seafood price stabilization. The size of the contingency funds is expected to be between 50% and 100% of this year's seafood consumption promotion budget (64 billion won) related to the Fukushima contaminated water discharge. In this case, the contingency funds are estimated to be between 30 billion and 60 billion won.

The government plans to announce the contingency fund allocation plan and additional large-scale seafood stabilization measures as early as the day Japan begins discharging the contaminated water. Specifically, it is expected to include extending the duration of ongoing online and offline seafood discount periods significantly, expanding the variety of fish species and the discount rates. The government also stated that it would consider compensation measures if direct damage to fishermen caused by the Fukushima contaminated water discharge is confirmed in the future.

The Japanese government has officially decided to begin the ocean discharge of contaminated water from the Fukushima Daiichi Nuclear Power Plant (referred to as "treated water" by the Japanese government) starting on the 24th. The photo shows merchants waiting for customers at the Noryangjin Fish Market in Seoul. Photo by Jo Yongjun jun21@

The government's active consideration of contingency fund allocation stems from concerns that once consumer sentiment weakens, the resulting prolonged stagnation in related industries could cause widespread damage. This situation was confirmed during the 2004 mad cow disease crisis involving U.S. beef. According to a report titled 'Changes in Beef Consumption After the U.S. Mad Cow Disease Outbreak' by the Korea Rural Economic Institute, beef retail sales in the first half of 2004 plummeted by 29.4% compared to the same period the previous year, and farm prices dropped by 19% due to the spread of the mad cow disease crisis. The report warned that "psychological factors have a greater impact on consumption decline than economic factors," and that "while changes in consumption volume due to economic variables such as price and income can be estimated, changes due to psychological factors are difficult to quantify."

Another major reason for the contingency fund allocation is the early depletion of this year's seafood promotion budget in response to the contaminated water. Since early this year, the Ministry of Oceans and Fisheries has strengthened support measures such as discount events and issuance of consumption coupons to prevent damage to fishermen caused by reduced seafood consumption. As the budget allocated this year is expected to be exhausted by October, after the Chuseok holiday, additional budget securing is inevitable.

Contingency fund allocation related to seafood was also carried out last year. The government allocated 20 billion won in the main budget for seafood consumption promotion last year, but as the timing of the contaminated water discharge became clearer, it additionally injected supplementary budgets (20 billion won) and contingency funds (20 billion won). This is a government measure to support the prevention of damage spread due to the contaminated water discharge while maintaining a fiscal austerity policy. A government official said, "Practical consultations regarding the allocation of contingency funds for seafood promotion have been completed," but added, "However, the final decision has not yet been made."