October 21, 2022
SEOUL – The main opposition Democratic Party of Korea passed its revision bill to the Grain Management Act unilaterally through the Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee of the National Assembly on Wednesday.
The party has a majority of 11 seats in the 19-member committee.
The bill makes it compulsory for the government to purchase overproduced rice if rice prices drop more than 5 percent from the average level or if production exceeds expectation by more than 3 percent.
Under the current act the government buys rice at discretion, within the boundary of excess, if output exceeds demand by more than 3 percent.
Since 2005, the government has bought overproduced rice arbitrarily. Rice is stockpiled for a few years, then most is cheaply sold as an ingredient for fodder or spirits.
If the government is obliged to purchase overproduced rice, farmers will seldom be motivated to reduce farming rice and grow other crops. Overproduction and price drops could repeat in a vicious circle.
Rice surplus is attributable to rapidly shrinking consumption due to changes in Koreans‘ eating habits and a delayed decrease in production. Per capita rice consumption shrank 29.4 percent over 17 years from 2005, while output decreased 18.5 percent.
The government announced on Sept. 25 it will purchase 450,000 tons of rice from farmers including 100,000 tons harvested last year to support falling prices, which became a record amount. This seems to be the Yoon Suk-yeol administration‘s response to the Democratic Party’s push to make it obligatory to purchase overproduced rice. The government opposes the mandatory purchase.
Last year the government purchased 370,000 tons of rice to reduce oversupply and spent about 790 billion won ($550 million). If the act is revised, output surplus is expected to soar to 641,000 tons by 2030 and about 1.4 trillion won will be required, according to an estimation by the Korea Rural Economic Institute.
Ideally, if consumption decreases, output should be reduced accordingly. But Korean farmers seldom try to reduce rice cultivation, since the government purchases rice to prop prices up. Hence, more than 200,000 tons of surplus a year.
It is true that rice price drops make rice farmers‘ livelihoods difficult. And yet the repetition of overproduction and income preservation is not a solution.
If the government purchases overproduced rice obligatorily, rice farmers will take it as a signal that it is no problem to keep overproducing rice. Decades of government efforts to reduce rice oversupply will fall apart.
The Democratic Party cites “food security” or “food sovereignty.” But it is questionable if food shortages — specifically speaking, rice shortages — will be a realistic risk to the country. It is hard to imagine a situation in which Korea cannot afford to import grains.
Probably what the party considered the most were the rice farmers’ votes. When it was the ruling party, the Moon administration opposed the government’s mandatory purchase of overproduced rice. Then the party is pushing the revision after it became an opposition party. This is legislation tyranny of the majority party. If the revised act creates a serious side effect, then the ruling party and government will likely be blamed.
The view of rice as staple food for Koreans is becoming obsolete. A realistic way to achieve food security is to reduce rice overproduction and increase cultivation of other crops that many consume. The revision bill throws a wet blanket on the government’s efforts in that direction.
Mandatory purchase will instigate overproduction and increase wasteful financial burdens on the government. Preserving rice farmers’ income this way is agricultural populism. It will distort agricultural industry and undermine the national economy. Now is the time to reduce rice farming and spread advanced agriculture such as smart farming.