The rice price and Reunification


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It has been a great harvest year, and now is the time for farmers to reap the results of their yearlong labor. However, their sighs have grown deeper as they are harvesting.

The average price of rice in September dropped to the level of 20 years ago, and it has fallen even more since the full-fledged harvest season began in October. This situation is problematic not only for individual farmers whose income is decreasing and livelihood getting worse. It is also our problem. As the price of rice drops, it becomes unsustainable for farmers to continue farming, leading to an agricultural crisis that is directly connected to our survival.

The seriousness of the situation, though, has not been fully acknowledged. In 2008, Korea was able to weather a global food crisis because there was a stable supply of rice. Now, the food self-sufficiency rate has fallen, and the stable production and supply of rice are at stake. We know that the crisis affects our dining table. Therefore, farmers have been struggling to stabilize the rice price.

In addition, farmers’ organizations have called for sending rice to North Korea to open the door for peace and help those who are suffering from severe flooding and food shortages. Yet, the Korean government has not responded to these demands. Jeong-eun Hwang spoke with Park Heung-sik, director of the Rice Producers Association in North Jeolla Province. Park is farming rice in Gimjae and involved in sending rice to the North.   

First, Park described the atmosphere in rural areas. In the days starting to harvest and sell rice in September, farmers received only 96,400 won [1] for an 80-kilogram bag of rice - 25% lower than last year. This price is even lower than the price of rice 20 years ago. The price slump was due to the government’s failure to balance supply and demand control by purchasing surplus rice stock. Rage among farmers is building.

To rectify the situation, farmers have continued their struggle since early September. On Sept. 4, farmers plowed the rice fields without harvesting. On the 25th, they held a nationwide farmers’ rally, and on Oct. 4, the farmers came to Seoul with rice loaded on trucks to bring the grains to the Blue House.

The government argues the cause of the price drop is a decrease in rice consumption and overproduction. While it is true that the consumption has fallen, the rice self-sufficiency rate was 85 percent five years ago and has since increased to 98 percent, which means the amount of rice produced domestically is almost the proper amount for us to consume, though it falls a little bit short.

If there isn’t enough rice produced domestically to feed us 100 percent, why is there so much rice left? It’s because 400,000 tons of rice are imported annually. The amount of rice stock is about 1,750,0000 tons, and 450,000 tons of it is imported. Thus, the real reason for the price drop is imported rice, decreased consumption and increased production thanks to technological advances. As this pattern is repeated, more rice is produced, and the price continues to fall.

Since the government pointed to the wrong reasons for the price drop, the policies it has implemented make the situation worse. In order to reduce production, it argues that absolute farmland [2] and direct government subsidies to farmers should be reduced. The fixed direct subsidy is paid per hectare and is allowed under World Trade Organization rules. It is provided under the argument that rice farming serves environmental and public functions. Rice fields play the role of securing fresh underground water and clean air. The multifunctional rice fields have given us a19 trillion won economic benefit. The government argues, though, that the subsidy should be reduced to make farmers change from cultivating rice to other kinds of crops.

Park said that reducing absolute farmland is a very dangerous policy since it will lead to a collapse of the basis of food production for future generations. When the absolute farmland is removed, it will become subject to real estate speculation. Every year, about 20,000 hectares of farmland are turned into roads or industrial development sites. What the government has proposed is removing about 100,000 hectares, about 10 percent of total absolute farmland, but that not only does nothing to solve the rice price problem but also exacerbates conditions for future generations.

Then what alternatives are needed? Park said one of the solutions is sending the rice to North Korea. On Oct. 4, the South Korean Commission for the June 15 Joint Declaration, Korean Peasants League, Korean Women Peasants Association and Korean Confederation Trade Unions argued for sending “reunification rice” to North Korea. The KCTU would raise funds, and farmer’s organizations would collect the rice. They requested that the government allow the sending of rice to the North and said they would send it by land once the Ministry of Unification gives permission.

It is a humanitarian act after the North suffered severe flood damage, and it opens the door to peace after relations between South and North have deteriorated in the past 10 years. At the same time, providing rice to North Korea enables us to decrease the surplus in the domestic rice market when agricultural policies have failed and imported rice continues to flood the market. It will also facilitate a peaceful inter-Korean mood.

Another solution is to legally establish a self-sufficiency rate for a basket of basic agricultural products. Such legally binding self-sufficiency rate would mandate the government to foster domestic agriculture while allowing farmers the flexibility to switch from rice production (when production is too high) to other crops that the government would support such as soybeans and corn (which are currently being displaced by GMO imports). This would allow rice production to be reduced without the risk of reducing farmland. Thus, farmland remains for when more rice needs to be cultivated. That’s why for Park a legal minimum food self-sufficiency threshold can control rice production while increasing the self-sufficiency rate.

Farmers have never stopped struggling to solve the problems by plowing rice fields, holding rallies and organizing press conferences. According to Park, they are planning to pile the rice in front of provincial offices to protest against government policies and demand that the government purchase rice to stabilize the price. Even though farmers are on the front lines of the struggle, it is not only for them. It is our problem as well since we are the ones who consume their produce. That is why we should join this fight. We should see the connection between people consuming healthy agricultural products and the farmers who continue farming. Thus, agricultural problems are both farmers’ and ours.

written by Hwang Jeong-eun (General Secretary, International Strategy Center)

  1. While the price a consumer pays for an 80 kilogram bag of rice is approximately 130,000 won, farmers received only 96,400 won.
  2. Absolute farmland scheme, also called the agricultural promotion area designation, was introduced more than 20 years ago in order to keep rice output at a stable level while prohibiting the use of designated lands for other purposes. (source:The Korea Economic Daily