Lowering Entry Barriers to Industrial Complexes and Increasing Stockpiles to Boost 'Domestic Wheat Self-Sufficiency Rate'

Ministry of Agriculture, Food and Rural Affairs, 2023 Domestic Wheat Industry Promotion Implementation Plan

The government has decided to lower entry barriers to production complexes and expand public stockpiling volumes to increase the self-sufficiency rate of domestically produced wheat.

The Ministry of Agriculture, Food and Rural Affairs announced on the 8th the "2023 Domestic Wheat Industry Promotion Implementation Plan," which contains detailed action plans to enhance the self-sufficiency rate of domestic wheat.

The ministry established the first Basic Plan for Wheat Industry Promotion (2021?2025) in 2020 and has been expanding policy and financial support annually with the goal of raising the wheat self-sufficiency rate to 5% by 2025. The 2023 wheat industry promotion budget is 40.3 billion KRW, a 67% increase from 24.2 billion KRW the previous year.

The 2023 implementation plan includes detailed action plans for establishing a domestic wheat production base and expanding production safety nets, systematizing distribution and stockpiling, securing a stable consumption market, and supporting research and development (R&D) to solve field issues.

[Image source=Yonhap News]

First, to expand domestic wheat production and establish a production base, the system will be improved. The basic requirement for selecting domestic wheat production complexes will be relaxed from the current "15 or more participating farmers" to "5 or more." For production complexes meeting certain criteria such as a cultivation area of 500 hectares or more, the scope of the production complex will be expanded from the basic local government level to the metropolitan local government level.

To stabilize the supply and demand of domestic wheat, a public-private cooperative system will be promoted by establishing a mandatory fund that all production complexes participate in. By March, a voluntary fund organization involving all production complexes will be formed, and by the end of the year, it will be developed into a mandatory fund organization. In addition, support will be provided for wheat supply-demand adjustment and consumption promotion activities to local governments that form and operate the "Wheat Production Area Council." Currently, the Wheat Production Area Council is formed and operated in Jeonbuk and Jeonnam provinces.

Starting this year, a "Public Stock Pre-Contract System" will be introduced. By signing contracts at the farm level for the next year's government stockpiling volume before seed sowing, it is expected to help not only regulate domestic wheat supply and demand but also secure sales channels for farmers' wheat production and stabilize farm management. The government stockpiling volume planned for next year is 25,000 tons. The government plans to increase the pre-contract volume to 50,000 tons by 2027.

Support for domestic wheat distribution and stockpiling will also be expanded. Support for wheat-dedicated drying and storage facilities will increase from 4 locations last year (including second-year facilities) to 5 locations this year. Local governments wishing to purchase wheat-dedicated equipment can be prioritized when applying for the "Agricultural Machinery Rental Business." Also, considering the increase in domestic wheat production, government stockpiling volumes will be expanded annually, and for farms lacking drying and storage facilities, harvested wheat will be dried using nearby regional agricultural cooperatives' drying facilities and immediately purchased by the government through on-site purchase expansion. Currently, participation intentions are being surveyed among regional agricultural cooperatives, and detailed purchase matters are being negotiated with two additional cooperatives that have expressed interest beyond the four that participated last year.

To secure a stable consumption market and expand the base of domestic wheat consumption, the supply of government stockpiled wheat will also be increased. For companies that have increased domestic wheat usage or switched from imported wheat to domestic wheat, 100 tons per company will be supplied for testing purposes. Contract cultivation volumes for processing companies will also increase from 6,000 tons last year to 8,000 tons this year to ensure stable raw material supply.

Jeon Han-young, Director of Food Policy at the Ministry of Agriculture, Food and Rural Affairs, said, "Although domestic wheat production has recently increased significantly due to the establishment of a wheat production base, there are many tasks to be promoted such as quality improvement and consumption expansion to enhance competitiveness against imported wheat. To raise the wheat self-sufficiency rate, we will expand policy support not only for increasing domestic wheat production but also for improving quality management standards, standardizing domestic wheat flour, and developing and distributing excellent varieties, so that demand for domestic wheat expands through quality improvement."

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