Agriculture Ministry: "Reduced Rice Market Isolation Costs by 541.3 Billion Won through Strategic Crop Direct Payment System"

2023 Strategic Crop Direct Payment Program Covers 125,000ha
"Without Proactive Reduction of Rice Cultivation Area, Market Isolation of 194,000t Would Have Been Inevitable"
Direct Payments to Farmers Scheduled for December

Instead of producing rice for table consumption in paddy fields, the 'Strategic Crop Direct Payment' given to farmers cultivating rice flour, soybeans, and forage crops has been shown to achieve results such as stabilizing rice supply and demand, increasing farm income, and improving food self-sufficiency rates.

The Ministry of Agriculture, Food and Rural Affairs announced on the 28th that the implementation area of the Strategic Crop Direct Payment system, introduced for the first time in 2023, is 125,000 hectares. The Strategic Crop Direct Payment system was introduced this year to ▲improve food self-sufficiency rates ▲manage grain supply and demand ▲and enhance paddy field utilization.

An official from the Ministry of Agriculture, Food and Rural Affairs explained, "Despite conditions such as rice price recovery and damage from heavy rains, farmers showed a high participation rate," adding, "This is a significantly higher level than the compliance rate of past paddy non-rice crop cultivation support projects."

The Ministry evaluated that the implementation of the Strategic Crop Direct Payment system brought various achievements, including stabilizing rice supply and demand, increasing farm income, and improving food self-sufficiency rates. First, through the Strategic Crop Direct Payment system, 13,400 hectares of rice for table consumption were converted to the cultivation of strategic crops such as rice flour, soybeans, and forage crops, reducing rice production by about 70,000 tons, thereby helping stabilize rice supply and demand.

In particular, the Ministry estimated that if the rice cultivation area of 19,000 hectares had not been proactively reduced this year, market isolation of 194,000 tons due to rice overproduction would have been inevitable. In this case, the Ministry estimated that financial losses amounting to approximately 541.3 billion KRW would have had to be borne. There was also a direct income support effect. The Ministry paid 108 billion KRW in Strategic Crop Direct Payments to about 73,000 agricultural management entities, supporting approximately 1.5 million KRW per entity.

The cultivation of strategic crops in paddy fields is also expected to greatly improve the food self-sufficiency rates of wheat and soybeans, which have high import dependence. Wheat production is estimated to have increased by 49% from 35,000 tons in 2022 to 52,000 tons in 2023, with an additional production of about 17,000 tons compared to the previous year. Paddy soybean production is expected to increase by more than 42%, from 26,000 tons to over 37,000 tons.

On this day, the Ministry of Agriculture, Food and Rural Affairs allocated 108 billion KRW in Strategic Crop Direct Payments to local governments. Local governments will verify the payment amounts for each farmer and plan to distribute the direct payments to farmers by next month.

Jeon Han-young, Director of Food Policy at the Ministry of Agriculture, Food and Rural Affairs, said, "It has been confirmed that the Strategic Crop Direct Payment system contributes not only to stabilizing rice supply and demand and improving the self-sufficiency rates of wheat and soybeans, which were dependent on imports, but also to increasing farm income." He added, "Especially next year, we will expand the target crops and areas for Strategic Crop Direct Payments and increase the unit price to enable more farmers to participate."

Powdered Rice Production Complex (archival photo)

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