With the South Korean government collecting public opinions on sending rice to North Korea, concerns are rising for a possible spike in the rice price once the food aid is actually made. The food aid plan for North Korea has particularly unsettled South Korea’s self-employed, who have been hit by an increase in rice price. The rice price has soared by 52 percent to 191,500 won per 80 kilograms as of May 5 from 126,000 won in July 2017.
In the past nine cases, which the South provided rice to the North, the price of rice dropped after the aid had been sent in five cases and increased in rest of the four cases. There is not a clear correlation between the price increase of rice and rice aid since most of the rice sent to the North is either old rice or imported rice. “Food aid to the North rarely affects domestic supply of rice as most of the rice sent to the North has been stored for two to three years,” said an official at the Ministry of Agriculture, Food and Rural Affairs. The rice harvested this year will be available on the market in four months from now. The government official’s explanation hints that the price of rice is not likely to soar even after the rice harvested between 2017 and 2018 is sent to the North.
Such precedents, however, failed to abate the concerns that the food aid would increase the price of rice. Every time there was a plunge in the rice price, politicians and farmer groups would argue that the government should send rice to North Korea in order to reduce the stock and thereby boost the rice price. Many think that their argument is based on the fact that reduced supply of rice actually pushes up the price of rice.
In 2010, when the price of rice plummeted due to good harvest, the Korean Peasants League issued a statement, saying, “A plunge in the rice price has been caused by the excessive stock resulted from the suspension of food aid to North Korea since 2008.” In 2016, when the rice price was on the decline, there were calls by farmer groups to send rice to North Korea. In February of last year, Rep. Seol Hoon of the ruling Democratic Party of Korea, who heads the Agriculture, Food, Rural Affairs, Oceans & Fisheries Committee, said at a National Assembly debate that sending food aid to North Korea can stabilize the price of rice and provide humanitarian assistance to North Korea.
Farmer groups refuted such claims by saying they are not expecting a boost in the price of rice and are only seeking to send the excessive rice stock to North Korea. “Once the stock is available on the market, it would ease the concerns for a possible plunge in the rice price,” said an official at the Korean Advanced Farmers Federation. “We didn’t aim to increase the price of rice by doing so.”
Hye-Ryung Choi email@example.com