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Resetting Rice Target Price, Reforming Direct Payment Discussed in KREI Issue Forum
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Writer KREI
Date 2018.10.19

Resetting Rice Target Price, Reforming Direct Payment Discussed in KREI Issue Forum

While the rice direct payment program has received a positive evaluation that it has contributed to rice farms’ management stabilization, the need to improve the program has been raised continuously due to its contribution to overproduction and the resulting increase in government expenditure. Also, a social agreement has not been reached on resetting the target price which will be applied to rice produced in and after 2018. Accordingly, the Korea Rural Economic Institute (KREI, President Kim Changgil) held an Issue Forum on “Resetting Rice Target Price and Reforming the Direct Payment Program” at the aT Center, Seoul, Oct. 17.

In his presentation, “Resetting Rice Target Price and Plans to Reform the Direct Payment Program,” KREI Grain Office Director Kim Jongjin forecasted that raising the rice target price might increase farm household income in the short term, but it would not be sustainable due to a rice price fall caused by overproduction. Therefore, he emphasized, “If raising the target price is inevitable, it is urgent to solve the supply-demand imbalance problem due to an increase in the inducement to produce rice.” On reforming the rice variable direct payment program, he analyzed that the fixed direct payment program has many merits in that it can improve the rice oversupply structure and equity among crops and farms with different sizes.

In the discussion chaired by Seoul National University professor Lee Taeho, Secretary General Im Byeonghui of the Korea Rice Pro-Farmer Federation said, “The structural problem of rice farming includes the issue of direct payments. However, it is unreasonable to think that reducing direct payments will stabilize farm household income due to a decrease in rice acreage and automatically solve the problem through a rise in rice prices.”

Secretary General Im Eungyeong of the Korea National Council of Consumer Organizations stressed that the rice target price should be set with consideration of overall rice-related costs including rice production costs, supply-demand control, and stock management.

Secretary General Kim Gihyeong of the Korean Peasants League argued that rice acreage and production should be maintained for food security and in preparation for agriculture after reunification.

Naeil Shinmoon journalist Jeong Yeongeun emphasized, “Recent discussions on the rice industry have focused on rice supply, demand, and prices. Nevertheless, it is necessary to discuss diverse issues on the overall rice industry.”

CEO Choi Gisu of The Agriculture, Fisheries & Livestock News said, “To solve the issue of target price, it is needed to first consider amending the Act on Preserving Agricultural Income. Also, it is necessary to comprehensively deal with the direct payment program including the rice issue.”

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