Rice Price Drop Spurs "Cultivation Area Management First"... Democratic Party Proposes Amendment to the 'Grain Management Act'

Mandatory Market Isolation Bundled into Party Policy... Lee Jae-myung Emphasizes "Government Must Isolate Markets"
Government and Ruling Party Oppose Mandate... Expected to Be Major Issue in Regular National Assembly Agriculture, Forestry, and Fisheries Committee

[Asia Economy Reporter Oh Ju-yeon] The Democratic Party of Korea is proposing an amendment to the ‘Grain Management Act’ that includes managing crop cultivation areas to respond to the rice price crash, which has fallen the most in 45 years. Currently, ‘market isolation’ measures are only taken for excess rice production. However, due to its discretionary and optional nature, it is judged that the current system cannot properly respond to the rice price decline, so the party plans to manage it from the production stage itself. The Democratic Party intends to merge this amendment with existing Grain Management Act amendments and promote it as a party policy, and it is expected to become the biggest issue in the Agriculture, Forestry, Livestock, Food, and Maritime Affairs Committee during this regular session of the National Assembly.

Shin Jeong-hoon, a member of the Democratic Party and head of the Rice Price Normalization Task Force under the Livelihood Priority Practice Group, said in a phone interview with Asia Economy on the 31st, "We plan not only to simply urge the government to take measures against the rice price crash but also to promote the ‘Grain Management Act amendment’ as a key bill under the party’s official stance."

The amendment Shin is preparing includes ▲ changing the ‘reverse auction’ method, which is currently conducted at the lowest bid price during rice isolation measures, to a market price system, and ▲ having the Minister of Agriculture, Forestry and Livestock establish and implement policies related to the cultivation area of alternative crops to proactively stabilize the management of rice farmers.

Shin said, "Market isolation can only be a reactive measure no matter what," adding, "To respond proactively (to stabilize rice prices), it is necessary to adjust the cultivation area from the production stage to stabilize supply and demand." He further stated, "With the current development of computer systems and various satellite information, it is fully possible to predict and control rice supply and demand from the production stage proactively," and "We plan to emphasize these aspects while promoting this as a party policy."

[Image source=Yonhap News]

The party stance is expected to include mandatory purchase of excess rice production. The currently proposed amendments to the Grain Management Act commonly include mandatory market isolation. For example, in the amendments jointly proposed by Representatives Seo Sam-seok, Yoon Jae-gap, and Yoon Jun-byeong, Article 16-4, which states that the government ‘may purchase’ excess production when excess rice production exceeds 3% due to overproduction or when rice prices fall more than 5% compared to the previous year, is revised to ‘must purchase,’ making it mandatory for the government to buy the excess rice.

However, the Ministry of Agriculture, Food and Rural Affairs takes a cautious stance on legislative amendments. A ministry official said, "The purpose of the system is to prevent a sharp drop in rice prices, but if market isolation is made mandatory, the oversupply structure could worsen," adding, "The amendment should be approached carefully by comprehensively considering the overall market situation."

On the 1st of next month, the Democratic Party’s Rice Price Normalization Task Force will hold a ‘Discussion Meeting on Tasks for Rice Price Normalization,’ which is expected to include participants such as Floor Leader Park Hong-geun, Policy Committee Chairman Kim Seong-hwan, representatives from the Korea Rice Farmers Central Association, the National Rice Producers Association, and government officials from the Ministry of Agriculture and other departments to exchange such discussions.

Lee Jae-myung, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly on the 31st and delivering opening remarks. Photo by Yoon Dong-joo doso7@

If the Democratic Party, which is emphasizing livelihood economic stability, decides on the Grain Management Act amendment as a party policy, rice prices are expected to become the biggest issue in the Agriculture, Forestry, Livestock, Food, and Maritime Affairs Committee during this regular session of the National Assembly.

Party leader Lee Jae-myung said at the Supreme Council meeting that day, "The rice price crash poses a serious risk to agriculture," adding, "Recently, the price of an 80kg sack of rice has fallen from 220,000 won to 170,000 won, creating a situation where additional market isolation is necessary," and criticized, "The government is delaying this and neglecting the rice price crash."

He continued, "The harvest season is approaching, and a further price crash could occur, so the government must act quickly and decisively to isolate the market," adding, "Within the party, we are preparing legislation that will automatically enforce mandatory market isolation once certain conditions are met. We will ensure that there are no gaps in the national budget during this regular session."

This content was produced with the assistance of AI translation services.