"Preemptive Management to Prevent Rice Price Drop" Grain Law and Agricultural Product Law Passed in National Assembly

[Financial News] The Ministry of Agriculture, Food and Rural Affairs announced on the 4th that the 'Partial Amendment to the Grain Management Act (Grain Law)' and the 'Partial Amendment to the Act on Distribution and Price Stabilization of Agricultural and Fishery Products (Agricultural Product Law)' were passed in the National Assembly plenary session. It includes measures to strengthen preemptive supply and demand control for major agricultural products, including rice, and to strengthen government responsibility for price declines.
 The 'Grain Law Amendment' stipulates that the government systematically plans the rice supply and demand balance area and the target area for crop conversion in advance and promotes sufficient support to farmers to ensure the effective operation of crop conversion.
 If an unavoidable surplus occurs, the 'Grain Supply and Demand Management Committee', in which more than one-third (at least five members) of producer organizations participate, will review measures suitable for the supply and demand situation, and the government is required to implement these measures.
 However, the criteria for triggering the government's post-measures will be decided by the committee within the range set by the government. It is expected that if a systematic supply and demand policy is implemented through the amendment of the Grain Law, the current rice surplus will decrease, and the budget required for supply and demand stabilization will be reduced.
 The 'Agricultural Product Law Amendment' requires the government and local governments to systematically establish a 'Plan for the Supply and Demand of Agricultural Products' for major items and to build a preemptive supply and demand management system for stable production and supply, including △management of cultivation area △pest control △expansion of disaster prevention facilities from the growth stage to the shipment stage. It also stipulates strengthening post-measures such as government purchase in case of supply and demand instability.
 Despite these efforts, if the average price of agricultural products for the year falls below the reference price, a new 'Agricultural Product Price Stabilization System' will be introduced to pay all or part of the difference.
 However, the target items will be confirmed through the deliberation of the 'Agricultural Product Price Stabilization Committee', and the reference price will be determined by presidential decree considering production costs and supply and demand conditions.
 The Ministry of Agriculture, Food and Rural Affairs plans to prepare support levels and implementation standards through consultations with related ministries and research services before the amendments to the two laws take effect in August next year, and to revise subordinate laws together.
 Minister Song Mi-ryeong of the Ministry of Agriculture, Food and Rural Affairs said, "In the future, we will closely communicate with the agricultural sector, the National Assembly, and experts to effectively promote preemptive supply and demand control, while also operating the system so that farmers can farm with confidence despite price fluctuations of agricultural products, including rice."

junjun@fnnews.com Choi Yong-jun Reporter