First-ever Decrease in Harvested Grain Price

The Government decided to decrease the purchasing price of fall harvest crops by 2% lower than that of last year.

A substantial wave is expected because the lowering of purchase price is the first since the purchase system has been introduced although there was the occasion of the purchasing price of fall harvest crops being frozen by the Government.

The Government held the cabinet meeting presided by President DaeJoon Kim on the 4th, and decided to submit the bill for lowering the purchase price of fall harvest crops with the said contents to the provisional meeting in the National Assembly in February.

If the government bill passes the National Assembly, the purchasing price and the purchasing quantity of fall harvest crops will be decided to be at 59,230 Korean Won per 40kg for the first class and for 5,326,000 seom respectively. The Government decided to compensate the farm houses for the decreased portion of their income by increasing the direct payment for the rice paddy farming.

Mr. JongUn Ahn, vice-minister of the Ministry of Agriculture and Forestry said, “The purchase price will have to be lowered to narrow the price difference between the domestic source and the foreign source and to solve the excess supply of rice in preparation for the renegotiation of rice in the WTO in 2004.”

The Government decided to increase the direct payment for the rice patty farming to 480 billion Koran Won from 400 billion Korean Won to compensate the farm house for the decreased portion of the income by accepting the recommendation from the committee for the distribution of crops. The direct payment for the rice paddy farming is a kind of subsidy assisting the farm houses performing a environment-friendly farming.

Mr. HyunSoo Kim, chief of the Food Policy Section of the Ministry of Agriculture and Forestry said, “It is reviewing the method of expanding the payment maximum limit fixed at up to 2㏊ up to 5㏊ rather than increasing the unit price of the range between 400,000 and 500,000 Korean Won per ㏊.” and added, “The competitiveness of rice industry will be able to be enhanced since this will expand the benefits for the farm houses of a relatively large scale.”

However, it is unclear whether the Government bill will pass the National Assembly without any revision or not. It is not only because the farmers` institute having clamed the 3% increase is strongly opposing but because the Grand National Party and the Millennium Democratic Party are disagreeing to the Government bill.

Mr. SahgBae Lee, chairman of the Policy Committee of the Grand National Party said, “We can never accept the policy by which the damages caused by the opening of the rice market is passed over only to the farmers.” and added, “The purchasing price has to be frozen to the minimum and an epoch-making increase has to be made for the direct payment for the rice paddy farming.”

Mr. SeKyu Jeong, chairman of the Committee for the Policy of the Grand National Party also expressed the opinion “that the decrease in the purchase is hard to be accepted.”

Eun-Woo Lee libra@donga.com