Compensation for the Rice Paddy Converted or Rested

The government decided to introduce the `production control system` which provides compensation to the farmers who plant other crops in the rice paddy or take a year off in order to control the supply of rice to prevent overproduction. And the `public stock system` is under discussion, which stipulates the rice purchase by market price and sells it again by the market price according to the stock standard. The new system is introduced to adjust the current rice purchase system, by which the government purchases rice at a higher price than market price.

The Ministry of Agriculture and Forestry (MAF) held an advisory meeting for stabilizing rice industry and reported `2002 mid and long term plan for rice industry` outlined as above.

The government clearly announced the direction of agricultural policy in the report saying, "The government will change the farming policy to the market principle from the way it used to be."

Therefore, the MAF will compensate for the loss caused by planting crops such as beans and corns instead of rice in the rice paddy, after taking the application from the farmers. The compensation is provided by the agricultural and fisheries products price stabilization fund and the livestock farming development fund. And when they do not cultivate rice paddy, the loss by growing beans or crops for feeds will be compensated.

Ahn Jong-Hoon, the assistant secretary of the MAF said, "Since we have not secured the budget for the project, we will compensate for 5,000 ha`s rice paddy converted to other crops as a model from the farming stabilization fund."

And the MAF will revise the standard of purchase by adding `special` grade to the 3 subdivided grades of rice as `1st`, `2nd` and `off grade`, and by decreasing the percentage of `1st` grade, which is currently 96 percent.

In addition, it will introduce various measures for the stable income of the farmers such as `stabilizing rice production system` which compensates the deficit when the spot price of rice falls below a certain level.

The MAF plans to decide the long and mid term plan for the development of rice industry in late March next year after it collects the public opinion from related circles through the seminars of experts and regional discussions on the plans reported to the advisory committee.

Joong-Hyun Park sanjuck@donga.com