Nonggyeongyeon "Even with Mandatory Quarantine of Excess Rice Production, Prices Fall"

Rice Price Trend Forecast When Mandatory Rice Market Isolation is Applied (Data = Ministry of Agriculture, Food and Rural Affairs)

[Asia Economy Sejong=Reporter Son Seonhee] As domestic rice production excessively exceeds consumption, leading to chronic overproduction, a forecast has emerged that even if surplus rice is compulsorily purchased (market isolation), rice prices will inevitably decline in the long term. It is pointed out that stabilizing rice prices is difficult through a method that injects finances unconditionally for market isolation without considering market demand.

The Korea Rural Economic Institute (KREI) released a report titled "Analysis of the Effects of the Grain Management Act Amendment" on the 14th, stating, "Since rice continues to be produced beyond demand and considering the decreasing consumption trend, there are no factors for rice price increases, and prices are expected to stagnate at around 172,000 to 180,000 KRW (based on 80kg of rice) until 2030." It added, "The average price under mandatory isolation (177,000 KRW) is expected to fall by 5.4% compared to this year's harvest season average (187,000 KRW) and by 8.3% compared to the past five-year average price (193,000 KRW), respectively."

The Grain Management Act amendment, which centers on mandatory rice market isolation, is currently pending in the Legislation and Judiciary Committee after conflicts between ruling and opposition parties in the National Assembly. This report was prepared to analyze its effects.

According to KREI, when mandatory rice market isolation is combined with support projects for cultivating other crops, rice prices rise in the short term, but oversupply worsens, and prices are expected to fall to levels lower than before in the long term.

Furthermore, the report forecasted, "When supporting the cultivation of non-rice crops, the excess production decreases in the short term, resulting in lower financial requirements than in the case of mandatory isolation alone, but as excess production increases, more finances will be required from 2027 onward." Ultimately, there is concern that policies defending prices by injecting finances will lack sustainability unless the scale of rice oversupply is reduced.

KREI suggested, "Policy improvements should be made in a direction that increases farm income through expanding direct payment systems that can enhance the income of not only rice farmers but farmers in general."

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