Addressing Rice Glut
The South Korean government will push for overseas food assistance this year to overcome the oversupply of rice for the first time. In addition, it plans to balance rice supply and demand from 2019 by cutting down on rice cultivation areas by 35,000 hectares and significantly expand the supply of rice for welfare and as animal feed this year.
The Ministry of Agriculture, Food and Rural Affairs (MAFRA) announced a complementing plan on the mid- to long-term rice supply and demand stabilization for 2017 on February 9. The plan’s highlights are reducing rice cultivation area, promoting rice consumption through rice processed food, raising rice supply for welfare and as animal feed and expanding overseas rice aid among other things.
The size of rice cultivation areas shrank by 35,000 hectares from 779,000 hectares last year to 744,000 hectares this year. The government plans to set target sizes by municipalities and fill reduced volumes with publicly reserved rice.
The government will also create and expand new demand for rice by donating rice to Myanmar and Cambodia among other countries. Roughly 1,000 tons of rice will be donated via the ASEAN Plus Three Emergency Rice Reserve (APTERR) in the first half of this year. At the same time, Korea will join the Food Assistance Convention (FAC) by year-end.
The government also laid out a plan to achieve US$100 million in the export of processed rice and rice products this year. To top it off, the government will increase demand for rice for welfare (a reduction in rice supply prices, the addition of small rice packages and the protection of the privacy of those who buy rice for welfare).
If such plans come into effect as planned, production and new rice demand will be balanced starting in 2019.
Meanwhile, this desperate measure was made by the government as rice production give rise to a rice glut every year. According to the National Statistical Office, the annual consumption of rice per capita, 128.1 kg in 1985, more than halved to 62.9 kg in 2015. As rice prices in rice producing villages decline due to oversupply, the government's flexible direct payments to farmers with taxpayers’ money has reached the maximum level of agricultural subsidies set by the WTO.