Rice purchase bill forced through committee by DP

Economy

Published: 19 Oct. 2022, 16:31

Rice purchase bill forced through committee by DP

People Power Party lawmakers protest Democratic Party So Byung-hoon, who chairs the Food, Rural Affairs, Ocean and Fisheries Committee, deciding on the Grain Management Act reform at the National Assembly in Yeouido on Wednesday. [JOINT PRESS CORPS]

The Democratic Party (DP) forced a bill through committee that will prop up the rice market, which is the midst of a glut that could prove to be a state of permanent oversupply.

On Wednesday, the National Assembly’s Agriculture, Food, Rural Affairs, Ocean and Fisheries Committee voted in favor of an amendment to the Grain Management Act that obligates the government to purchase excessive rice from local farms when rice production exceeds 3 percent of estimated consumption or when the price drops more than 5 percent from the average.

Under the current law, the purchasing of rice by the government to stabilize the market is optional.

Of 19 members on the committee, 10 from the DP and independent Yoon Mee-hyang voted in favor.

The committee has 11 DP lawmakers, seven from the People Power Party and one independent, former DP member Yoon.

The PPP denounced the steamrolling by the DP and said the vote was a political maneuver by the DP to win support of farmers.

“The amendment is populist policy that will ruin the rice industry,” said Lee Yang-soo of the PPP. “It is a move to distract attention from accusations against DP leader Lee Jae-myung.”

The DP claims that it had no choice but to force the bill through committee as the PPP has been uncooperative.

“We have tried to discuss the necessity of the bill and review any problematic clauses, but the PPP has not once participated,” said Kim Seung-nam, the DP sponsored of the bill. “Demanding that we start discussing the bill is a scheme to stall for time.”

The bill still has to make its way through the Legislation and Judiciary Committee, which is chaired by a PPP member, before being put to vote in the National Assembly, where the DP controls the majority of seats.

President Yoon Suk-yeol could veto the bill.

Rice sold at a major discount mart in Seoul on Oct. 3. The government announced that in addition to the 450,000 tons that it is purchasing to stockpile for emergency purposes, it is making an additional purchase o 450,000 tons to prevent rice prices from falling further. [YONHAP]

The government has strongly objected to the bill, arguing that the mandatory purchase will not only stress the national balance sheet but also weaken the competitiveness of local farmers.

“It works when there is a shortage of rice,” said Chung Hwang-keun, minister of agriculture, food and rural affairs, on Monday. “The government has already spent to buy up excessively produced rice and yet the price still failed to go up.”

He said trying to control the price by obligating the government to buy the excessive rice will only further encourage the farmers to continue to overproduce, and they could become dependent on the government.

The minister said other options should be taken into consideration, such as diverting the excessively produced rice to make other products, such as processed goods like rice flour.

According to a recent report by the Korea Rural Economic Institute, between 2022 and 2030 about 468,000 tons of excessive rice will be produced. That’s 132.6 percent more than the estimated baseline during the same period largely due to declining in rice consumption.

It could cost the government more than 1 trillion won on average annually to purchase the rice and store it.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]