It has been revealed that one of the decisive factors behind President Lee Jae-myung's decision to retain Minister Song Mi-ryeong of the Ministry of Agriculture, Food and Rural Affairs was the proposal of alternatives for the 'Grain Management Act revision bill,' drawing attention to the future of the Grain Act. Notably, the newly promoted 'Grain Act revision bills' by the Democratic Party of Korea contain provisions that are less stringent than those of the legislation previously passed.
Recently, as rice prices have skyrocketed, the necessity of the Grain Act revision bill, which contains the 'government mandatory purchasing clause' for securing farm household income has diminished. In contrast to the political symbolism emphasized during the opposition period, a changed 'calculating method' from the ruling party has been sensed, taking into account the national fiscal situation and agricultural policy direction.
According to Statistics Korea, as of the 5th of this month, the rice price was 199,668 won per 80 kg, nearing the average harvest season price (about 200,000 won). This figure represents a 1.9% increase compared to the previous survey date of May 25. The Ministry of Agriculture, Food and Rural Affairs recently reported that the recent rise in rice prices is a seasonal trend; however, the difficulties faced by some suppliers in securing raw crops (rice) could act as a factor for price instability. If supply disruptions continue, there are concerns that consumer prices may rise.
Amid this situation, the new government is preparing to again pursue the revision of the Grain Act, aiming for rice price stabilization and food security. The existing bill, which former President Yoon Suk-yeol had exercised veto power over, mandated that the government purchase excess production immediately if certain conditions were met. However, among the nine bills recently proposed in the National Assembly, many have been adjusted to a two-step structure of 'conditional purchase,' allowing government intervention only if price declines continue after inducing a reduction in cultivation area, rather than purchasing immediately at times of significant price drops.
The amendment, primarily introduced by Democratic Party of Korea Representative Moon Dae-rim, stands as a representative example. This bill stipulates that mandatory purchases will only be triggered when 'the government-set reduction objectives are achieved, and rice prices fall below the criteria set by the presidential decree or if there is concern of falling prices.' This framework ensures that government intervention does not occur merely because of reductions failing or a simple surplus situation. The mandatory purchases will be carried out through cooperatives such as NongHyup rather than direct government procurement, and the purchase price is specified based on public stockpiling rice.
A representative from Moon Dae-rim's office noted, 'This amendment is a feasible alternative for stabilizing rice supply and demand,' and explained, 'If farmers cooperate to reduce the cultivation area but prices plummet, the state should bear some responsibility, institutionalizing a safety net following actual reductions.'
Within the Democratic Party of Korea, the view that revising the Grain Act is necessary to strengthen food security remains, but there are also voices highlighting the need to differentiate it from the bills pursued when they were in opposition. As the ruling party responsible for national affairs, they must consider the state of the country's finances.
Another representative from the Democratic Party of Korea, who requested anonymity, stated, 'The reason Yoon Suk-yeol's government was able to exercise veto power is that the bill at the time strongly reflected political symbolism.' They added, 'Now, as the ruling party, it is time to consider both the sustainability of finances and the feasibility of policies.'
Under current law, the government can choose to isolate the market for rice at its discretion when market prices plunge or excess supply occurs. In contrast, the revision stipulates that the government must legally intervene if certain conditions are met, thus conferring legal binding force. However, it is pointed out that guaranteeing automatic purchases during price declines could send incorrect signals to farmers, leading them to opt for increasing production rather than reducing it.
Previously, the Korea Rural Economic Institute (KREI) estimated that the implementation of the Grain Act revision bill could require an annual budget of about 1.4 trillion won by 2030. If combined with support for non-rice crop cultivation, the burden could increase further. Already, approximately 2.5 trillion won was spent on market isolation from 2021 to 2024. Accordingly, a consensus seems to have formed within the Democratic Party regarding the need to consider a 'compromise that guarantees purchases only for farmers who implement reductions to a certain level.' This aligns with the Ministry of Agriculture's policy direction of 'inducing voluntary reductions' instead of enforcing mandatory cuts.
Currently, there are positive evaluations within the Ministry of Agriculture, Food and Rural Affairs regarding the revision bill, which amended the 'mandatory purchase clause.' Minister Song has actively explained the alternatives to the Grain Act revision bill to President Lee through cabinet meetings. The alternatives presented by Minister Song reportedly focused on adjusting cultivation areas, substantial income preservation measures for farmers, and creating new demand to expand rice consumption. It is said that a comprehensive agricultural policy reform plan containing measures such as reducing rice cultivation areas, transitioning crop types, and expanding the '1,000 won breakfast' program, which was pursued by the previous administration, was introduced.
Professor Kim Han-ho from Seoul National University's Department of Agricultural Resource Economics stated, 'While the current amendment has improved compared to the past, adopting a policy where the government buys up everything whenever rice prices fall should be avoided,' and emphasized the need to impose certain obligations on farmers, such as reducing cultivation areas and subscribing to insurance, and to enhance the coherence of policies to respond to market signals in connection with related legislation. He stressed that actively inducing the use of risk mitigation measures such as disaster insurance and linking them with the conditions for purchasing under the Grain Act could enhance their effectiveness.