'Opposition's Forceful Passage' of Grain Act, Government Buys Surplus Rice Annually with Taxpayer Money... Government "Will Persuade Until the End"

An official is inspecting the purchased rice at the Suracheong United Agricultural Cooperative Comprehensive Rice Processing Center (RPC) in Bibong-myeon, Hwaseong-si, Gyeonggi-do. [Image source=Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] The amendment to the Grain Management Act, which mandates the government to unconditionally purchase surplus rice that remains unsold in the market using public funds, has passed the critical hurdle. The opposition party, the Democratic Party of Korea, pushed the bill through the relevant standing committee unilaterally, and it is now awaiting review by the Legislation and Judiciary Committee and submission to the plenary session. The government has repeatedly expressed opposition, stating that if the bill passes, it will waste over 1 trillion won of taxpayers' money annually and further encourage overproduction of rice, which will not benefit agricultural development.

The amendment to the Grain Management Act, centered on the 'mandatory rice market isolation,' was directly submitted by the Democratic Party on the 19th at the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee. The vote took place without any ruling party members present and passed. Of the 18 committee members, all 10 Democratic Party members voted in favor, resulting in the bill being passed solely by the opposition party.

Mandatory rice market isolation is a system requiring the government to compulsorily purchase surplus rice when the excess production exceeds 3% or when rice prices drop by more than 5%. The government has implemented rice market isolation 11 times to date. Recently, it announced plans to complete the purchase of a total of 450,000 tons of rice, including 100,000 tons produced last year and 350,000 tons produced this year, within the year.

However, while such measures may temporarily defend rice prices, the government is concerned that in the long term, it will further encourage rice production, which is already in a state of 'structural oversupply.' Due to westernized eating habits and other factors, annual rice consumption has been rapidly declining. The government has been using various policies, including direct payments, to reduce rice cultivation areas and promote the cultivation of other crops such as wheat, soybeans, and rice flour. Although rice production has been gradually decreasing through these efforts, rice consumption has been declining much more sharply, causing a 'chronic supply-demand imbalance' to be a recurring problem every year.

If this trend of overproduction worsens, it is projected that more than 1 trillion won of public funds will be spent annually starting from 2026. The Korea Rural Economic Institute recently estimated in its 'Impact Analysis of Mandatory Rice Market Isolation' report that if rice market isolation becomes mandatory, about 1 trillion won will be required in 2026. Furthermore, the required budget is expected to increase sharply to 1.24 trillion won in 2028 and 1.4 trillion won in 2030.

The government plans to explain the unfairness of mandatory rice purchases again to farmers and the public and attempt to persuade the opposition party to prevent the bill's passage. Chung Hwang-geun, Minister of Agriculture, Food and Rural Affairs, stated, "We are already spending a lot of taxpayers' money to handle the surplus rice," and reiterated opposition, saying, "This measure may temporarily help stabilize rice prices, but it does not help ordinary farmers as a whole or agricultural development at all."

However, considering the 'minority ruling' situation in the National Assembly, if the opposition party pushes ahead with a plenary vote, there is little means to block it. At least, since the chairperson of the Legislation and Judiciary Committee is from the ruling party, the People Power Party, it is possible to delay the process for some time. A Ministry of Agriculture, Food and Rural Affairs official said, "If the majority party uses overwhelming tactics, there is no way to stop it," adding, "There are about 90 days left until the votes in the Legislation and Judiciary Committee and the plenary session. During this period, we will thoroughly inform farmers of the details and propose discussions to persuade the opposition party."

The last resort is the 'presidential veto.' If the amendment passes the plenary session of the National Assembly, the president can veto it. However, considering the agricultural community's demand for mandatory rice intervention, this poses a significant political burden. Regarding this, President Yoon Seok-youl officially expressed opposition on the 20th, stating, "If the purchase of surplus rice is mandated by law, the waste of agricultural finances will become severe," and "That money should rather be used for rural development, and this is not very helpful to farmers." He also urged, "I ask the National Assembly to conduct more in-depth discussions."

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