Declining Self-Sufficiency Rate of Wheat... Deputy Minister of Economy and Finance Says "Continuous Discussions on Measures to Compensate Domestic Wheat Production Costs"

Choi Sang-dae, 2nd Vice Minister of the Ministry of Economy and Finance (left), is speaking at the Vice Ministers' Meeting on Fiscal Execution held at the Government Complex Sejong in Sejong City on the morning of the 11th. 2022.10.11 [Photo by Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] Choi Sang-dae, Vice Minister of Strategy and Finance, said on the 11th, "Considering the trend of increasing wheat demand and the low self-sufficiency rate, we will continuously discuss ways to compensate for the production cost gap between domestic and imported wheat."

Vice Minister Choi attended a fiscal forum held at the Government Sejong Complex under the theme "Food Crisis Korea" and said, "We will also continuously pool wisdom on policy efforts to replace wheat flour demand with rice bread and other rice-based products."

With global supply chain disruptions and the Russia-Ukraine war overlapping, "food security" has become a global issue. Domestically, as eating habits westernize, rice consumption is steadily decreasing while wheat demand is increasing. Accordingly, rice suffers from structural oversupply, whereas the self-sufficiency rate of domestic wheat remains below 1%.

Vice Minister Choi said, "Even if flour is replaced and utilized with non-glutinous rice, maintaining the same quality as wheat incurs costs," adding, "Policy considerations are needed on how to share or support these costs between the private sector and the government."

Regarding the issue of rice market isolation, which is stuck in an oversupply swamp, Vice Minister Choi said, "There are complex implications such as demands to maintain appropriate rice prices," and added, "If necessary fiscal resources are required, support should be provided." He refrained from commenting on the fiscal authorities' stance on the Grain Management Act, which mandates rice market isolation and is currently being legislated under the leadership of the opposition Democratic Party.

However, Vice Minister Choi added, "Fiscal funds are invested not only in market isolation but also in storage for reserves," and said, "Unlike manufactured goods, agricultural products such as rice and wheat have poor storage durability, so there are questions about whether there is technology development and infrastructure for grain storage."

Kim Jong-in, a researcher at the Korea Rural Economic Institute who attended the forum, suggested, "Efforts to diversify paddy field use to alleviate structural rice oversupply and improve food self-sufficiency are necessary," and recommended, "As in Japan's case, the government should steadily reduce rice cultivation areas through support and convert them to other crops."

Jeon Han-young, Director of Food Policy at the Ministry of Agriculture, Food and Rural Affairs, emphasized, "The self-sufficiency issue ultimately comes down to price and fiscal matters," adding, "Like Japan, which has sustained self-sufficiency through fiscal support, we must quickly break away from the fixation on rice overproduction." He further stated, "Rural areas and farmers must also change, and the government should strengthen the foundation that enables these changes."

Nam Jae-jak, Director of the Korea Precision Agriculture Research Institute and author of the recent book "Food Crisis Korea," said, "It is realistically difficult to increase Korea's food self-sufficiency rate," and suggested, "We should broaden our perspective to global agriculture, expand investment in future agricultural technologies, and actively foster overseas agricultural professionals."

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