Ministry of Agriculture, Food and Rural Affairs Announces Additional Measures to Stabilize Rice Prices
Following 10.5t Market Isolation, Additional 9.5t Isolation
Rice Purchase Fund Expanded to 3.5 Trillion Won This Year
The government has decided to isolate 200,000 tons of this year's rice from the market to stabilize rice prices during the harvest season. Following the announcement last month to pre-isolate 105,000 tons, an additional 95,000 tons will be isolated.
The Ministry of Agriculture, Food and Rural Affairs held the Grain Supply Stabilization Committee on the 15th to discuss the 2024 rice supply stabilization plan and finalized measures to stabilize rice prices during the harvest season.
The first rice harvesting of the year took place in a farm in Buk-myeon, Inje-gun, Gangwon Province last August. [Image source=Yonhap News]
At the Grain Supply Stabilization Committee meeting, about 17 participants including rice producers, distributors, consumer group representatives, and academic experts discussed the need for bold market isolation to stabilize rice prices in production areas during the harvest season.
The government proposed to isolate a total of 200,000 tons from the market, which exceeds the expected surplus production. This figure includes the pre-isolated amount of 105,000 tons announced last month. Additionally, including 360,000 tons of public stockpiled rice, the total amount of rice purchased during the harvest season will be 560,000 tons. According to the Ministry of Agriculture, Food and Rural Affairs, this corresponds to about 15% of the expected production.
Of the 200,000 tons to be isolated from the market, the pre-announced pre-isolation amount (105,000 tons) was allocated by city and province as of the 26th of last month. Contracts will be signed within the year between local distribution companies and alcohol and feed manufacturers to use 70,000 tons for alcohol production and 35,000 tons for feed.
The remaining 95,000 tons will be purchased from farmers by the end of the year in parallel with the public stockpiling during the harvest season. Also, the interim settlement price for public stockpiled rice, which has been frozen at 30,000 won since 2017, will be raised to 40,000 won to help secure liquidity for farmers during the harvest season.
The entire amount of rice damaged by brown planthopper and pre-germination will be purchased to minimize farmers' losses and to prevent the distribution of low-priced rice. The Ministry of Agriculture, Food and Rural Affairs plans to notify local governments of the provisional standards and purchase guidelines for damaged rice by the end of this month and complete the purchase of damaged rice within the year.
In addition, 3.5 trillion won will be provided to local distribution companies such as NongHyup and NongHyup/private Rice Processing Complexes (RPCs) to support rice purchase funds, ensuring stable rice sales for farmers during the harvest season. To this end, the government will expand rice purchase funds to 1.3 trillion won this year. NongHyup will receive support of 2.2 trillion won, the same level as last year.
To establish order in rice distribution during the harvest season, special inspections will focus on violations such as incorrect labeling of rice production year and milling date, and mixing of new and old rice. The Ministry of Agriculture, Food and Rural Affairs is operating a special inspection period from the 30th of last month to the 29th of next month.
Park Su-jin, Director of the Food Policy Office at the Ministry of Agriculture, Food and Rural Affairs, said, "This year, the government is pursuing supply and demand management more proactively and preemptively than any previous year," adding, "this year, we plan to implement bold market isolation exceeding the surplus amount." She continued, "Recently, there have been opinions in the field that high temperatures and low sunlight may affect rice production. We will continue to closely monitor overall market trends to ensure rice prices stabilize during the harvest season."
Meanwhile, the estimated rice production for this year announced by Statistics Korea last week is 3,657,000 tons, which is 45,000 tons (1.2%) less than last year. The Ministry of Agriculture, Food and Rural Affairs noted that the current estimated production exceeds the expected demand for new rice by 128,000 tons and expects the production figures to change depending on the final rice production announced by Statistics Korea next month.
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