The recent annual amount of produced rice is 440 to 500 million tons depending on the cultivation area and changes in harvests. The amount of imported rice continues to increase and is more than 250 thousand tons in 2009. The amount of rice consumed for principal food continues to decrease and is estimated to be approximately 3.7 million tons in 2009 and approximately 350 thousand tons consumed for processed food including rice wine brewing. It is necessary to take measures for improving the demand and supply structure because there is a less demand of rice for food, e.g., rice used for principal food, processed food, rice for brewing, etc., as compared to the amount of supply including the rice produced in Korea and imported rice.
According to the Input/Output Table in 2007, the order of consuming rice is the bread and biscuit industry, other food, and other alcohol industry. The ratio of supplying rice produced in Korea is relatively high. Less rice is used in noodles as compared to other industry and 50% of rice provided for other alcohol industry is imported. The shares of rice used for producing food are 14% in the bread and biscuit industry, 0.4% in the noodle industry and 9% in the other food industry and 25% in the other alcohol industry.
For purchasing raw rice, 20% of rice processing companies purchase it directly from farmers and 80% from vendors, wholesale markets, distribution centers, importers, etc. For purchasing raw rice directly from farmers, 3.6% thereof was secured by direct production and 53.6% by contract production through a contract for the amount, time and cost of purchase in advance. Unspecified type of temporary purchase was 42.8%. To enhance connection between food production companies and farmers, some opinions were presented for preparing plans for reducing changes in the amount of transaction and transaction cost by predicting harvests and alleviating damages to occur, for enhancing farmer's quality control system and improving development of breeds appropriate for processing.
There was shown that more than 30% of consumers buy rice cakes, rice biscuits, rice wines, rice breads or rice noodles at least once per week. 52.5% of consumers were satisfied with buying rice cakes, but 14% for rice biscuits, 12% for rice noodles, 9.6% for rice wines, 2.7% for rice drinks and rice breads, respectively, meaning lower satisfaction for purchasing them. The most reason that 58.9% of consumers buy processed rice food is that they think it is healthy food. 87.6% of consumers consider the country of origin of rice used for the processed food, and 76% of them said they check whether the raw rice is produced in Korea or not. The reason of consumer's checking the country of origin of rice is that they consider safety (59.6%) and quality(23.4%) as important factors.
It is estimated that the market share of breads, biscuits and noodles based on rice would be more than 60%, providing better conditions encouraged for consuming the products. However, to this end, one thing required is diversified schemes for lowering the cost of supplied rice produced in Korea. Another thing necessary is to enhance research and development for developing new products with unique features of processed rice, e.g., the taste of processed rice products, methods of processing, etc. It is necessary to satisfy consumer's needs who want a variety of processed rice food at reasonable prices in order to encourage consumers to buy more processed rice foods.
In order to boost the basis for consuming more rice in Korea, an effort should be made for encouraging consumers to buy more processed rice foods along with market development for diversified processed rice foods while keeping the existing boiled rice market. An effort should be made to lower the cost of supplied rice produced in Korea for processing, and to have a basis for stable raw rice supply. Promotion of using rice for breads, biscuits, noodles, etc., requires a basis for efficient supply of rice powder. One thing important for encouraging more rice consumption is to promote consumption of products based on rice, e.g., rice cakes or rice wines. Expanding the basis for consuming more rice in diversified sectors needs research and development related to development of processed rice foods in many ways. In addition, continuous study and public relations for a variety of advantages of rice and processed rice foods will contribute to stably encouraging consumers to buy more processed rice foods.

Researchers: Gouk Seung-Yong, Han Jae-Hwan,
E-mail Address: gouksy@krei.re.kr