[OUTLOOK]Wasting trillions on rice

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[OUTLOOK]Wasting trillions on rice

When the Uruguay Round of global trade negotiations was concluded 10 years ago, the country was in an uproar because Korea had made an international promise to open the rice market. An elderly opposition leader roared into the microphone at a debate, “Rice is the blood of our farmers. We must stop the opening of the rice market with our lives if necessary.”
A prominent figure in the farmers’ movement, however, doused the politician’s fiery statement with an unexpected comment. “Rice is rice. How could it be blood? Until when will you stir up the farmers like this?” Or course, this person was also fervently opposed to the opening of the rice market. However, his opinion was that aggravating the farmers’ emotions would only make a difficult situation worse.
Around that time, that farmers’ advocate left the anti-establishment farmers’ movement to work for a movement that would seek alternatives. Korean agriculture must accept the World Trade Organization system as reality and find a new way to survive, he said.
The ten years of our grace period have expired. Korea’s right to limit rice imports to 4 percent of domestic consumption is ending at the end of this year. Korea can negotiate either for a delay of the opening of the rice market or to minimize the demand for increases in the import quota. Neither option looks very likely to succeed. In the rice trade talks, the United States, a key negotiating counterpart, “holds the handle of the sword” while Korea is “holding the blade” in a manner of speaking. However the details are worked out, it would be virtually impossible to prevent the further opening of the rice market. Can we adjust smoothly?
If we had made the proper preparations over the last 10 years, we would not be worrying so much right now. More than 40 trillion won ($33.3 billion) of government money was spent in restructuring the domestic agricultural industry, but most of this money was spent on pork-barrel policies, and the rice price, which should have gone lower to decrease the difference with the international rice price, has actually risen.
The government’s purchasing price of rice was raised five times in the last 10 years, total increase of 26 percent. The administration and the National Assembly together have often implemented policies that damaged attempts at preparations. We must now be prepared to pay a higher price for our wrong actions.
Even President Roh Moo-hyun promised in a debate during the election to “establish a special plan.” Mr. Roh had emphasized that the situation needed to be solved through policies and not unreasonable demands. He had suggested establishing measures to compensate for the loss of the farmers beforehand and to implement a compensation system and negotiate the opening of the rice market at the same time.
The allocation of 119 trillion won to the agricultural sector in the government’s middle-term fiscal plan and the annulment of the National Assembly’s right to approve government purchases, along with an overall reform of the government purchase system, can all be understood as the administration’s efforts to pursue such goals. The Ministry of Agriculture and Forestry has announced that it would lower its purchase price by 4 percent this year. Although belated, it is still welcome news.
The ball is now in the National Assembly’s court. What role will the Assembly play in the reforming of the system as suggested by the government and ultimately, in the opening of the rice market? Under the current atmosphere at the National Assembly, it would be a relief if we achieved at least one of the two reforms pursued, the annulment of the National Assembly’s consent for government purchase and the lowering of the purchase price. There is even a possibility that the National Assembly this fall would not be able to discuss either of the two issues and wallow in confusion with the matter of opening the rice market.
Both the governing party and the opposition would be afraid to take the lead. Korean legislators freeze into inaction whenever talk about the rice market comes out and it is unlikely that they would easily relinquish their right of approval. They say politics in Korea has changed and the National Assembly has changed. Now is a perfect chance to find out if that’s true.
The farmers’ groups already seem to have decided on their direction. They will continue vehemently opposing the opening of the rice market. To these farmers, the debate over whether it would be more advantageous to argue for tariff rates or import quotas in the new negotiations is useless.
To them, rice is still “the blood of the farmers” and they will never let foreign rice come in and ruin them. It is such a pity that we are seeing such stubborn resistance and strife when we should be working together on the fundamental issue of restructuring and reviving a dying domestic agricultural industry, rice trade aside.
To conclude, the solution lies in the hands of the National Assembly. Even if they become unpopular and come under public censure, the National Assembly must revamp the government purchase system. If it doesn’t, the 119-trillion-won agriculture budget absolutely will go to waste.

* The writer is the chief economic correspondent of the JoongAng Ilbo.


by Lee Chang-kyu
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