Government: "Difficult to Agree on Grain Management Act and Agricultural Security Act... Not Helpful for Rural Development"

On the 18th, the government clearly opposed the Grain Management Act and the Agricultural Product Price Stabilization Act, which were passed solely by the opposition party at the National Assembly's Agriculture, Forestry, Livestock, Food, and Maritime Affairs Committee, stating that they "do not help rural development."

On the same day, the Ministry of Agriculture, Food and Rural Affairs stated, "The government finds it difficult to agree with the current amendment bill due to concerns about side effects."

Earlier that morning, the Agriculture, Forestry, Livestock, Food, and Maritime Affairs Committee approved the request for plenary session deliberation on the 'Partial Amendment to the Grain Management Act,' which mainly includes mandatory rice purchase, and the 'Partial Amendment to the Act on Distribution and Price Stabilization of Agricultural and Fishery Products,' which compensates the difference when agricultural product prices fall below the standard price, with support from Democratic Party members and independent lawmakers.

A Ministry of Agriculture, Food and Rural Affairs official pointed out, "The amendment to the Grain Management Act again includes the provision for the government to forcibly purchase surplus rice, which was rejected by the National Assembly after the government's reconsideration request in April last year," adding, "If surplus rice is forcibly purchased, it will provide strong incentives for farmers to maintain rice production, which is expected to exacerbate the oversupply structure of rice."

Additionally, the Ministry noted that forcibly purchasing surplus rice would require enormous financial resources, making it difficult to secure budgets for future agricultural development such as fostering young farmers and smart agriculture.

Concerns were also raised about inevitable setbacks in crop switching to expand production of wheat, soybeans, and other crops dependent on overseas imports. The government is shifting its policy to proactive supply and demand management to maintain stable rice prices through appropriate rice production and supply control. To this end, it is moving away from the 'post-market isolation' method that causes fiscal waste and promoting 'preemptive reduction of rice cultivation area' through strategic crop direct payment systems.

Alongside this, the government plans to enhance the rice supply and demand forecasting system based on real-time observation data using satellites and drones, as well as consumption-related big data, and prepare measures to proactively adjust supply and demand before harvest if overproduction is expected.

Regarding the amendment to the Agricultural Product Price Stabilization Act, which mandates the government to compensate part or all of the difference if market prices of major agricultural products such as grains, vegetables, and fruits fall below the standard price, concerns were raised about overproduction and excessive government financial input.

A Ministry official said, "If price guarantees are provided without farmers' obligation to adjust supply and demand for major agricultural products, production will concentrate on items with high convenience and high guarantee levels, raising concerns about overproduction. This could lead to excessive government spending and a vicious cycle," adding, "If the selection of target items and determination of standard prices are made through the Agricultural Product Price Stabilization Deliberation Committee, which includes stakeholders, unnecessary social conflicts may arise during the implementation process."

Concerns were also expressed about violations of international norms. Funds used for the price stabilization system are considered reduction-targeted subsidies under World Trade Organization (WTO) regulations, and if limits are exceeded, full payment may be difficult or issues of violating international norms may arise. Furthermore, it is seen as a complete reversal of the global trend of restructuring agricultural policy from price support that distorts production to income stabilization for farming households.

A Ministry official stated, "For major agricultural products such as vegetables and fruits, we will further enhance the effectiveness of supply and demand policies by strengthening an autonomous and proactive supply and demand management system involving producers, including preemptive management of appropriate cultivation areas," and added, "We will communicate sufficiently with experts and the agricultural sector before the plenary session to gather opinions and seek ways to improve the stable production and effective supply and demand management of agricultural products."