[Inside Chodong] Who Is the Grain Management Act Amendment For?

The Grain Management Act, enacted in 1948 with the purpose of securing national food supplies and stabilizing the national economy, has lost its essence and ultimately degenerated into a tool for political conflict. This occurred when the Democratic Party of Korea on the 28th unilaterally passed a motion in the relevant standing committee demanding that the amendment bill to the Grain Management Act, which centers on mandatory market isolation, be brought directly to the plenary session of the National Assembly without passing through the Legislation and Judiciary Committee. The Ministry of Agriculture, Food and Rural Affairs, the competent authority, as well as the Presidential Office, have both directly and indirectly maintained opposition, resulting in a truly strong-against-strong confrontation.

Recently, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho expressed strong regret over the belated processing of the budget, which was the worst in history, and the patchwork amendments to the corporate tax law, stating, "The reality is that a major opposition party clearly exists in the National Assembly." This implied a recognition of the limits of executive authority in the face of the wall between the opposition party holding the largest number of seats since democratization and the ruling party with the fewest seats. The Grain Management Act is an even more extreme case, as the opposition party has been determined from the start to proceed with unilateral passage.

There are only two ways to prevent the opposition party's unilateral advance: find a compromise or have President Yoon Seok-yeol exercise his veto power. The possibility of the former is currently low. The government’s only alternative is to expand support for cultivating other crops if the mandatory market isolation clause is deleted, but the Democratic Party has no intention of giving up mandatory market isolation, making compromise impossible. The public is on the verge of witnessing the absurd reality where the first bill pushed by Democratic Party leader Lee Jae-myung faces the first veto by President Yoon.

The amendment to the Grain Management Act, which appears to be influenced by populism and political pressure beyond that, was inherently self-contradictory. This is because the policy to reduce rice production by supporting the cultivation of other crops instead of rice in paddy fields and the mandatory market isolation, which encourages increased rice production, are being implemented simultaneously, creating a contradictory situation.

Other agricultural and livestock organizations will not quietly watch the agricultural budget, already criticized as insufficient, being poured solely into 'rice' that is no longer consumed as before. The Korean Beef Association, suffering from plummeting cattle prices and soaring feed costs, says, "There is no finger that does not hurt among the ten fingers," urging balanced and progressive measures. In fact, meat consumption is soon to surpass rice consumption.

Some farmers' groups persistently demand that the state purchase basic agricultural products and guarantee minimum prices linked to production costs, distorting the market economy function. When these demands coincide with election seasons, their volatility is beyond imagination. Continuously distributing budgets at such times would not only place a heavy burden on national finances but also inevitably cause regression in the future of Korean agriculture.

[Image source=Yonhap News]

Does mandatory market isolation align with the Grain Management Act’s purpose of securing national food supplies? Statistically, it does not. The rice self-sufficiency rate, already close to 95%, would instantly exceed 100% if market isolation were mandated. On the other hand, for wheat, which has a self-sufficiency rate of only 1%, the public stockpile available for emergency response is only one month’s supply, and even with mandatory market isolation, the self-sufficiency rate is expected to be around 4% at best by 2027.

Rice remains an important staple for our people who have overcome the harsh times of scarcity, but it is true that it is no longer as significant as before. Rice consumption continues to decline, and even if the government purchases rice exceeding demand with a trillion-won budget annually, the government and experts consistently agree that rice prices will stagnate at a certain level or even fall. If everyone truly seeks a way to help farmers in difficulty, it is right to find a solution that many can accept.

Kim Hye-won, Deputy Head of Economic and Financial Department kimhye@

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