Government increases subsidies, slashes tariffs to stabilize food prices

Green onion is sold at a Seoul supermarket in December. [YONHAP]

The government has increased subsidies for green onions, and plans to lower tariffs for expanding imports of the vegetable, as part of its efforts to stabilize produce prices including those of eggs and flour.

Government officials examined agricultural, livestock and fishery winter prices and discussed measures to stabilize them at a meeting held by the Ministry of Economy and Finance on Friday.

The government has increased subsidies for distributors of green onions, which grew more expensive due to variable weather, from 500 won (38 cents) per unit to 1,000 won per unit from the beginning of January. It will also lower tariffs to import 3,000 tons of green onions starting in mid-January.

Additionally, the 1.12 million fresh eggs imported in anticipation of the spread of the highly pathogenic avian flu (AI) have been supplied at discounted prices to supermarkets since Thursday. The price of a case of 30 fresh eggs averages 4,990 won.

The government will also examine the prices of eating out and for food products whose rates highly fluctuated at the beginning of the year, and will extend its support of related businesses by reducing their costs.

The food service enterprise fund, which supports operations and facilities for businesses in the catering industry, will launch on Feb. 1.

The fund's budget is 30 billion won this year, which is double the amount it received last year. Each business is eligible to receive up to 5 billion won, with a limit of 100 million won for facility costs. Interest rates range from 2.5 to 3 percent for operating funds and 2 to 3 percent for facilities.

Starting next month, the government will also offer mill companies 450 billion won in loans, to be used for importing flour, in order to stabilize flour prices.

It also plans to implement measures to alleviate the burden of electricity bills — it will provide up to 440,000 won of assistance per household.

BY HAN YOUNG-HYE [kim.juyeon2@joongang.co.kr]