In Poor Harvests, Converted to Table Rice... Ministry Launches First "Rice Supply-Control Paddy" Program

Isolated from the table-rice market as processing-use from the production stage
Ability to reduce table-rice cultivation area without fears of oversupply of other crops
Participating farmers secure a fixed income of 11.21 million won per hectare

For the first time this year, the government will implement a "rice supply-control paddy" program, under which rice grown on designated fields is restricted for processing use from the production stage in normal times and thus isolated from the table-rice market, but can be converted to table rice and supplied to the market in years of poor harvests or other supply shortages. The government expects that, by reducing the cultivation area for table rice without fears of oversupply of processing-use rice or alternative crops, and by converting supply-control paddy from processing use to table rice when supply shortages such as poor harvests are anticipated, it will be able to stabilize the table-rice market.

An official at the Ministry of Agriculture, Food and Rural Affairs said on the 11th, "We plan to begin accepting applications to participate in the rice supply-control paddy program at the end of this month," adding, "Farmers wishing to participate should submit an application form for supply-control paddy to their eup, myeon, or dong office and then conclude a shipment contract with a Rice Processing Complex (RPC), specifying the contracted volume and participation area; once this shipment contract is signed, the application process is complete."

Until now, to control rice supply and demand, the government has supported the cultivation of alternative crops such as soybeans and flour rice in paddy fields through the Strategic Crops Direct Payment Program. However, there were concerns that the cultivation area for these crops was expanding faster than market demand, potentially creating a new oversupply problem. Because of these oversupply concerns, there are limits to expanding the range of crops and area for paddy-field alternative crops, so a new policy tool is needed that can reduce the cultivation area for table rice instead.

In response, starting this year the government will introduce a system under the rice supply-control paddy program that allows farmers to continue growing rice in paddy fields as before, while restricting its use to processing from the production stage. The cultivation area for supply-control paddy will be preemptively isolated from the table-rice market and can therefore make a significant contribution to stabilizing rice supply and demand. The ministry also expects that existing rice farmers will find it easier to participate than with other crops, since they can simply continue to grow rice.

In Japan, a "processing-use rice support program" is in place that similarly restricts use to processing from the production stage and manages such rice accordingly. Under this scheme, if farmers supply all processing-use rice produced on designated areas to demand-side companies, they receive area-based direct payments.

Depending on the progress of preemptive supply-demand control this year, the Ministry of Agriculture, Food and Rural Affairs plans to implement the rice supply-control paddy program on a scale of 20,000 to 30,000 hectares. Farmers participating in the program will sign shipment contracts with RPCs and produce rice restricted to processing use, then ship the contracted volume to the RPCs. If a participating farmer’s rice yield per unit area is at the average level, the farmer will be able to secure a fixed income of 11.21 million won per hectare, regardless of fluctuations in rice prices, by combining direct payments with revenue from shipping processing-use rice.

The ministry official emphasized, "This is 650,000 won higher than the average annual income from conventional rice cultivation, and farmers whose rice yields are above average can generate even higher income," adding, "Because new-crop rice produced by the private sector is supplied directly to rice-processing companies, there is also the benefit of reducing storage and management costs associated with market isolation measures and public stockpiling."

The government expects that, through this program, it will be possible to reduce the cultivation area for table rice without concerns about oversupply of processing-use rice or alternative crops. In addition, in the event of short-term supply-demand instability, supply-control paddy can be quickly redirected and supplied as table rice, and because this rice is new-crop rice, it has the advantage of stabilizing supply and demand more effectively than government-managed grain stocks (old rice).

The rice supply-control paddy program can also serve as a catalyst for growing the rice-processing industry. By supplying private-sector new-crop rice (supply-control paddy) as raw material to rice-processing companies instead of government-managed grain stocks (old rice), it is possible to improve the quality of processed food products. To foster high-growth segments such as traditional liquor, the ministry plans to supply varieties and production regions tailored to the needs of rice-processing companies in these industries and to give preferential allocation of supply volumes.

Byun Sangmoon, Director General for Food Grain Policy at the Ministry of Agriculture, Food and Rural Affairs, said, "The rice supply-control paddy program is a policy that can achieve three goals at once: stabilizing rice supply and demand, stabilizing farm household income, and fostering the rice-processing industry," and added, "As this is the first year the system is being implemented, we strongly encourage active interest and participation from farmers and RPCs so that it can take root properly."

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