Government to Purchase 50,000 Tons of Rice and Promote Sales for Price Stability
Plans to Review Support Measures for Hanwoo Farmers
The government has decided to fully introduce import price insurance from next year to mitigate the management risks faced by farmers due to price declines and volatility. This move comes as the opposition party is pushing again in the 22nd National Assembly to amend the Grain Management Act (Yanggok Act) and the Act on Distribution and Price Stabilization of Agricultural and Fishery Products (Nongan Act), prompting a response.
On the 21st, the Ministry of Agriculture, Food and Rural Affairs announced that it discussed rice price stabilization measures and income and management safety nets for farmers at a private-government-party consultation held at the National Assembly.
As of the 15th, the average farm-gate price of rice was about 187,000 KRW per 80kg, down 7.7% compared to the harvest period. In response, the government judged that the decline in farm-gate rice prices continues due to the concentration of volume to the Nonghyup and the burden of inventory caused by sluggish sales. Through the private-government-party consultation, the government plans to purchase an additional 50,000 tons, while Nonghyup will implement a repayment deferral of rice purchase funds (worth about 500 billion KRW) and actively promote sales, aiming to achieve an effect equivalent to about 150,000 tons as part of the rice price stabilization measures.
The Ministry of Agriculture, Food and Rural Affairs expects that the rice cultivation area will decrease by more than 10,000 hectares compared to the initial target as a result of the 2024 rice appropriate production measures. Considering the supply and demand situation of 2024 rice, it plans to use 50,000 tons of this year’s public stockpiled rice for the 2023 crop. In addition, to respond to changes in the rice industry environment and diversified demand, the ministry will promote measures such as strengthening proactive supply and demand management, expanding production of high-quality and processed rice, and improving systems for the management stabilization and rationalization of Rice Processing Complexes (RPCs).
Furthermore, despite the announcement of these measures, the private-government-party requested that additional measures be promptly prepared if rice price recovery remains slow, and strongly urged the expansion of rice aid to Africa.
In particular, the private-government-party agreed to expand agricultural policy insurance and agricultural direct payments in a market-oriented manner. Under the foundation of appropriate production based on proactive supply and demand management, import price insurance to mitigate agricultural income volatility will be fully introduced from next year. Also, to avoid inducing production of specific crops, the agricultural direct payment budget will be steadily expanded to 5 trillion KRW based on basic direct payments that support farmers’ income according to cultivation area regardless of crop type.
The government plans to develop practical measures that benefit both farmers and consumers through a public-private-academic consultative body for building an income and management safety net for farmers, launched on the 19th, where the agricultural sector, academia, and government will discuss together.
At the private-government-party meeting, there was also a shared recognition of the need for government measures to support Hanwoo cattle farmers, whose management conditions have worsened due to recent weak wholesale prices and high feed costs. Based on the discussions, the government will review support measures for Hanwoo farmers to alleviate their management difficulties, promptly pursue amendments to the Livestock Act reflecting the purpose of the Hanwoo Act, and simultaneously establish mid- to long-term industry development plans.
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