Government Plans to Scrap Policy to Buy Rice from Farmers

The government’s annual routine purchase of rice from farmers will likely end starting next year.

Once the government scraps the policy to buy rice at a price it deliberately set that is favorable to farmers, the price of rice will fall in the market, which will in turn trigger opposition among farmers.

The Ministry of Agriculture and Forestry said on August 3 it would unveil an amendment of the grain management act, ending the government’s commitment to buying rice, starting on August 7; a move which it describes to improve the competitive edge of the country’s rice industry.

If the amendment is approved at the National Assembly in its regular session in September, it will take effect in the second half of the year.

Under the amendment, the ministry will no longer be required to seek National Assembly approval for the volume and the price of rice it will purchase.

The amendment will give an option not to buy rice to the government, which is required to purchase rice every year on a technicality involving congressional approval,

The clause on the government’s obligation to seek National Assembly approval for the price it sets to buying rice was first introduced in 1948 and repealed after more than 20 years in 1972. In 1988, when the governing party lost a majority of seats to opposition parties, it was reintroduced.

Since then, the government’s attempts to seek approval for its price of rice at the National Assembly have always run into conflict with farmers and lawmakers, who were concerned with rural votes.

The amendment also requires the government to hoard about 100-120 million metric tons of rice and barley in a public reserve for national emergencies such as wars and natural disasters. However, what the new obligation sets itself apart from the old one is that the government should buy the grains at market value, not above, which it did for farmers.

“Although we expect resistance from rural-precinct lawmakers while the amendment is under review at the National Assembly, we don’t have any alternatives in the face of a further opening of the grain market [to the world],” said Park Hae-sang, vice minister of Agriculture and Forestry. “Since it will wreak damage on farmers, we may consider a slight delay in the introduction of the amendment.”

“The repeal of the National Assembly’s approval of the government’s purchase of rice will cause the rice industry to collapse,” the Korean Peasants League and other farmers’ groups said. “We will hold protest rallies region by region and will sternly respond to [the government’s move].”

Jin-Hup Song jinhup@donga.com