Government to Consider Adding Rice to Import Safety Insurance Starting Next Year

Announcement of Expansion Plans in June

The government is considering adding rice to the list of items covered by the 'Income Stabilization Insurance,' which compensates farmers who have paid insurance premiums for their income. There is a high possibility that rice will be included in the target items as early as next year. As the opposition party pushes to pass the amendment to the Grain Management Act, which mandates the government to compulsorily purchase surplus rice, within the term of the 21st National Assembly, the government has prepared an alternative.

On the 27th, a Ministry of Agriculture, Food and Rural Affairs official said, "We plan to announce the expansion plan for Income Stabilization Insurance in June," adding, "We intend to expand the target items beyond the current nine in 2024, and we are considering including rice and others."

Introduced in 2015, Income Stabilization Insurance guarantees up to 80% of the difference if the income of insured cultivators falls below the average of the past five years. The government and local governments cover 80-90% of the insurance premiums, while farmers bear the remaining 10-20%.

The Ministry of Agriculture, Food and Rural Affairs launched a pilot project in 2015 targeting two items, onions and grapes. This year, barley and corn were added, bringing the total to nine items. Income Stabilization Insurance is a government budget project, allowing the expansion of items without parliamentary approval.

The ministry's move to expand the items, including adding rice to Income Stabilization Insurance, is based on the judgment that it can reduce the fiscal burden compared to amendments to the Grain Management Act and the Agricultural and Fishery Products Price Stabilization Act.

Earlier, the Korea Rural Economic Institute analyzed that if 70% of rice farmers subscribe to this insurance next year, about 127.9 billion to 189.4 billion KRW of national funds will be invested. In contrast, it was projected that over 1.2 trillion KRW would be spent if the Grain Management Act were amended. This means supporting farmers' income stabilization at about one-sixth of the cost.

A Ministry of Agriculture, Food and Rural Affairs official said, "If the amendment to the Grain Management Act, which forces the government to compulsorily purchase surplus rice, is passed and implemented, structural oversupply of rice will worsen, inevitably leading to a vicious cycle of falling rice prices. Therefore, it is difficult to agree to the amendment to the Grain Management Act," adding, "We are consulting with related ministries on including rice in the expanded Income Stabilization Insurance plan."