"Rice Concentration Phenomenon... 3 Trillion Won Expected from Grain Act Funding"
The opposition party has announced that it will process the amendments to the Grain Management Act and the Act on Distribution and Price Stabilization of Agricultural and Fishery Products (Nongan Act) within the term of the 21st National Assembly, while Song Miryeong, Minister of Agriculture, Food and Rural Affairs, expressed concerns that these amendments "undermine the market's autonomous adjustment function."
Minister Song appeared on KBS Radio's 'Jeonggyeok Sisa' on the 7th and pointed out, "The two amendments could distort the production structure," adding, "There will inevitably be a concentration on items with higher reference prices or those that are more convenient to cultivate, which will erode the resources that should be invested in the future of our agriculture and rural areas."
The amendment to the Grain Management Act includes a provision that requires the government to compulsorily purchase surplus production if rice prices plummet, and the main content of the Nongan Act amendment is the implementation of a 'price guarantee system' where the government pays producers the difference if agricultural product prices fall below a certain standard.
Minister Song pointed out that if the two amendments pass, the financial burden could increase significantly due to the injection of trillions of won in budget. He said, "It is expected that more than 3 trillion won will be spent on the Grain Management Act, and the Nongan Act is in a state where fiscal estimation is impossible due to difficulties in execution," adding, "I judge that it is highly likely to hinder the development of agriculture and rural areas."
He also said, "In the case of rice, which has a very high mechanization rate, if the government compulsorily purchases it, the cultivation factors will be reinforced," adding, "Even now, there are talks that rice is in surplus, but cultivation is concentrated on rice, which could also cause problems for food security. The rice surplus will intensify and supply-demand instability will repeat."
Regarding ways to reduce surplus rice, he mentioned the 'Strategic Crop Direct Payment System.' Minister Song explained, "The Strategic Crop Direct Payment System basically maintains the shape of paddy fields while substituting crops like wheat and soybeans, which we import a lot, so that we can reduce the area of rice cultivation."
He continued, "Next, through yield forecasts, if overproduction is expected, a buffer quantity can be diverted for feed use as a preemptive measure," adding, "This is called the three-stage zero strategy: in the first stage, other crops are cultivated through strategic crop direct payments; in the second stage, the buffer quantity is secured early; and if necessary after harvest, additional supply-demand stabilization measures are implemented."
Regarding the distribution stage of wholesale markets, which has been pointed out as a cause of high agricultural product prices, he said, "The performance of wholesale corporations should be evaluated for re-designation, but this has not been done," adding, "There is also a need for competition, and we found issues such as the commission fees (that wholesale market corporations take when distributing agricultural and fishery products) being somewhat too high. Also, production areas are too small-scale and outdated, lacking market bargaining power. Based on various inspections, we announced measures to improve distribution practices."
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