Saturday, 17 October 2009

Kore having bumper rice crop

Korea's rice fields have produced another bumper crop, which might have
been a dream come true for Sah Dong-min, a 50-year-old farmer in Pohang,
North Gyeongsang. But not this year.

Sah, who has been a farmer for three decades, said he was able to sell
an 80-kilogram (176-pound) bag of rice for 170,000 won ($143.90) to
180,000 won two years ago, but now he can get just 130,000 to 140,000 won.

"The hard work all through summer is not going to pay off at all," said
Sah, who farms 82,000 square meters (20 acres). "If it happens again
next year, I don't know whether I can keep doing this."

Sah hopes the government will do something for him.

Rice, Korea's staple, has long been a symbol of the country's
sovereignty. With state support, Korea has reached almost complete
self-sufficiency in rice production, compared with just 5 percent
self-sufficiency for all foods. But now it seems those programs were too
successful, and the government has been forced to buy back a significant
portion of each year's rice harvest so to keep prices from falling too
sharply.

Meanwhile, as Korea's diet grows increasingly Westernized, demand for
rice has been shrinking over the years, leaving more to be bought with
taxpayers' money. According to the National Statistical Office and the
Ministry for Food, Agriculture, Forestry and Fisheries, Koreans' per
capita rice consumption is falling by about 2 percent each year on
average. In 1998, the average Korean consumed 99.2 kilograms of rice,
but a decade later, that dropped to 75.3 kilograms. Farmers have tried
to reduce production to match the trend, but they can't keep up with
falling demand.

And that's why two years of huge harvests have only added to the
problem. Last year, Korea's farmers hauled in 4.84 million tons of rice,
much higher than the usual 4.57 million. This year, around 4.65 million
tons are expected, according to the Agriculture Ministry.

Making things worse is a quota that requires Korea to import a
percentage of its rice, imposed by the WTO in return for a delay in the
opening of the Korean rice market. The import quota was 306,964 tons
this year and is expected to rise to 400,000 tons in 2014, the year
Korea will finally have to remove barriers to rice imports. The gap
between supply and demand has caused wholesale rice prices to drop more
than 10 percent in the last year, angering millions of farmers.

On Monday, about 60 members of a local farmers' federation turned a
2,300-square-meter rice field in Yeoju County, Gyeonggi, upside down as
reporters watched. The farmers said they were protesting a lack of
effort by the government to compensate them for losses suffered due to
falling rice prices. A day earlier, around 100 farmers in Naju, South
Jeolla, destroyed a field of around 2,000 square meters.

The government said on Wednesday that it would spend around 1 trillion
won, 100 billion won more than originally planned, to buy 2.7 million
tons of rice. That was 230,000 tons more than it purchased in 2008.

It was not the first measure announced to deal with the rice issue. On
Tuesday, the government said hundreds of thousands of soldiers would
receive birthday rice cakes beginning next year as part of efforts to
increase consumption.

The government is also trying to persuade farmers to open the market
earlier, claiming less rice will be imported in an open market with the
quotas gone. Farmers currently oppose that idea. Citing the high price
of locally cultivated rice compared to that of other countries, they
claim an opening would flood the market and threaten their livelihood.

"Korean agriculture is not mature enough to be handled by free market
principles," said Kim Sang-yong, an official at the Korean Advanced
Farmers Federation. Kim said the government can solve the problem by
resuming rice shipments to North Korea.

South Korea once shipped its excess rice, around 400,000 to 500,000 tons
a year, to North Korea, but the deterioration of inter-Korean relations
last year halted those shipments.

The government says a more fundamental solution is needed.

"The demand-supply mismatch for rice cannot be solved without a solid
local demand base," said Agriculture Minister Chang Tae-pyong in a
recent media briefing. He said the ministry will launch a project to
boost production and demand for processed rice products, which it hopes
will alleviate the problem.

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