Bumper rice crop leads gov’t to up its purchase plan

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Bumper rice crop leads gov’t to up its purchase plan

The government and ruling Saenuri Party are planning to purchase an additional 150,000 tons of rice on top of 200,000 tons of rice they had earlier agreed to buy. The plan comes amid growing worries over the largest harvest in six years, which could lead to a stiff price drop.

While a final figure for the second phase of rice purchases will be made during a government-Saenuri Party meeting next week, it was revealed that the party proposed the government make an additional purchase of 150,000 tons for the sake of farmers.

The measure is intended to prevent a dramatic drop in rice price from the abundant crop of this year, which is expected to hit 4.32 million tons, the highest in six years, according to Statistics Korea.

“Rice production this year turned out to be larger than initially expected, prompting the party to request another purchase of 150,000 tons of rice by the government,” said a senior party official.

The Ministry of Strategy and Finance is now talking with the Ministry of Agriculture, Food and Rural Affairs to finalize the amount of rice to be bought and the scope of budget to be spent.” The government and ruling party had earlier agreed to buy 200,000 tons of rice during a meeting on Oct. 26 and indicated they would consider buying another 90,000 tons after reviewing forecasts for 2015 rice production to be released by Statistics Korea days later.

On Friday, Statistics Korea announced the year’s crop was 4.32 million tons, 1.6 percent higher than an earlier projection at 4.25 million tons, prompting the governing party to push for an additional purchase of 150,000 tons.

But while the two sides have agreed on the purchase of 350,000 tons of rice in total, the opposition New Politics Alliance for Democracy (NPAD) is calling for 400,000 tons of rice to be bought to prevent rice prices from plummeting.

During a meeting with NPAD leader Moon Jae-in, Kim Young-ho, who heads the Korean Peasants League, said an additional purchase of 200,000 tons ? not 150,000 tons ? was needed to keep the rice price from falling.

Moon agreed, noting the rice price continued to drop even after the government announced its intention to purchase 200,000 tons in the first phase, and pledged to help meet the farmers’ demand.

While the government and politicians agree on the need for the government to buy and store rice to keep the rice price stable, the costs associated with storing government-purchased rice are high. And the issue becomes more complicated when considering decreasing consumption of rice in the country.

Last year, the average consumption of rice per Korean fell to 65 kilograms a year, down 20 percent from 81 kilograms in 2005. Over the nine years, Korea has produced an average surplus of 720,000 tons of rice.

During years of the so-called Sunshine Policy by two liberal governments, which pursued engagement with North Korea thorough business cooperation and aid, surplus rice production was sent as aid to the Communist state.

But with the chill in inter-Korean relations over the past seven years under conservative governments, rice donations stopped.

As of August, the amount of rice in storage was 1.37 million tons. It costs more than 500 billion won ($427.5 million) to store rice every year. It costs 3.6 billion won of taxpayers money to store one ton of rice a year.

BY PARK YU-MI, KANG JIN-KYU [kang.jinkyu@joongang.co.kr]
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