Gov`t Freezes Purchase Price of Rice Next Year

At the Cabinet Meeting on 4th, government confirmed the plan to freeze the government purchase price of rice for next year. If the plan is endorsed by the National Assembly, it will be the fourth freeze after 94, 95 and 97, and for the first time since this government.

Kim Dong-Tae, the Minister of Agriculture and Forestry, announced that he examined the proposal of the grain distribution committee (GDC) to lower the purchase price by 4 to 5 percent but the government decided to freeze the price to lessen the burden of the farmers. If the price were lowered, the government would not have to supplement for the farmers` decrease of income on account of fixed budget of next year.

So the price of the highest quality unhusked rice next year were set at 60,440 won per 40kg sack, and for the husked 167,720 won per 80kg sack. And the price of unhusked barley were set at 31,490 won per a 40 kg sack, rye 35,690 won.

According to the UR, the government should reduce its subsidy. So it will purchase 5,481,000 sacks (789,000t) next year, the sum of which is reduced by 272,000 sacks (39,000t) from 5,753,000 sacks (828,000t) this year.

By the decision of government to freeze the purchase price, agricultural experts such as GDC members protested severely against the frozen purchase price. But farmers, on the contrary, criticized government asking them to raise the price. Criticizing the government, Prof. Sa Kong-yong of Sogang Univ. (Economics), the member of GDC, said, "government adopted a stopgap measure on the situation where a drastic shift of rice policy is needed. And it avoids its responsibility to prepare for the impact of rice market opening for the political purposes."

Meanwhile, agricultural organizations such as Junnong (Advanced Farmers Federation) called for raising the purchase price of rice again. The chief of policy department in Junnong, Lee Ho-Jung said,"we will continue to demand for the 6.6 percent raise of the purchase price to government and National Assembly."

Government was likely to establish `Special Committee of New Agriculture and Fishery (tentative name)` which consists of 30 persons of politicians from the ruling and the opposition parties, farmers, fishermen, consumers, and academic circles. It will be an organization under direct control of the president to research the countermeasures to the agricultural problems.

Park Joong-Hyun sanjuck@donga.com