Rice bill heading for the compost heap as parties far apart

A person inspects the rice supply stored at a low temperature warehouse in Gyeonggi on Thursday. [NEWS1]

The Yoon Suk Yeol administration and the Democratic Party (DP) are unable to narrow their differences on a law that requires the government to purchase excess rice.

Yoon is being advised to veto the DP-led rice bill that passed the National Assembly last week. The bill, designed to force the government to purchase rice produced beyond a certain amount, regardless of how much people consume, causes a tremendous financial burden, they say.

"The populist policy that defies market principles can never succeed," Han said in a press statement after having a meeting with officials of the administration and the People Power Party (PPP) at his residence in central Seoul on Wednesday.

Finance Minister Choo Kyung-ho and Food Minister Jeong Hwang-geun both expressed the need for a veto during a Cabinet meeting held the previous day, to which Yoon said he respects their input and will decide after consideration.

With Han also calling for a veto, what only remains now is Yoon’s action.

It is rare for a president to veto a bill that already passed the National Assembly. The last was in May 2016 during the Park Geun-hye administration when she vetoed a bill that would allow legislators to hold hearings with very few hurdles.

The government argues that the rice bill will impose a tremendous financial burden.

The bill, the Agricultural and Fishery Products Quality Control Act, requires the government to purchase rice if the oversupply exceeds 3 and 5 percent of the expected demand or if rice prices fall more than 5 to 8 percent on year.

The DP pushed the bill through on March 23 despite opposition from the government and the PPP, claiming that the bill will put a stop to a vicious rice production and consumption cycle.

“The legislation will only increase rice production, which is already excessive, and does not help in raising the self-sufficiency of scarce crops,” Han argued. The government will rather choose to focus on strengthening the rice industry by pumping up rice demand and improving the production system for high-quality products, he added.

Average rice consumption per person has been tumbling. According to Korea Rural Economic Institute (KREI), it was around 100 kilograms (220 pounds) in the late 1990s, but plunged to 54.4 kilograms last year and is projected to drop further to 47.1 kilograms in 2030. KREI estimates some 20 tons of rice surplus every year.

The law will result in more leftover rice, according to the research institute, because farms will have fewer reasons to cut rice production.

By 2030, more than 64 tons of rice will be overproduced, costing the government 1.4 trillion won ($10.8 billion) to purchase the excess rice. The budget for this purchase will mount year after year if rice consumption continues to decrease while oversupplies increase.

Vetoed bills have all been scrapped in the past. To re-pass a vetoed bill, more than one-half of legislators need to be present for the vote, with approval from more than two-thirds of the present legislators. The DP currently holds the parliamentary majority with 169 seats in the 300-seat National Assembly.

DP Rep. Shin Jeong-hoon, who led the bill proposal, said on March 24 that the main opposition party will come up with another bill to stabilize rice prices if the government vetoes the bill.

“Politicians took the easiest route of purchasing the excess rice, but it is difficult for the government to accept the bill,” said Kim Han-ho, an agriculture economics professor at Seoul National University. Lawmakers are taking measures, such as subsidies, which should come when food is scarce, in a completely opposite situation, Prof. Kim added.

“As many other developed countries — the United States and Japan — have long been struggling to balance the supply and demand of various agricultural products, policymakers need to come up with a well-devised food countermeasure.”

Korean Advanced Farmers’ Federation released a statement urging the government to draw up a more balanced crop policy going forward after the veto.

Korea Rice Farmers’ Central Federation also called for an improved bill. The bill needs to be re-discussed in full to secure agricultural production income of farmers, and not just touch on supply and demand.

BY CHO HYUN-SOOK [sohn.dongjoo@joongang.co.kr]