Rice to the Rescue: Government Buys 100,000 Tons to Tame Soaring Prices, But at What Cost to the Nation’s Cattle
- The Ministry of Agriculture, Food and Rural Affairs revealed the 'Rice and Hanwoo Supply and Demand Stabilization Measures' during a Democratic Party-Government council meeting at the National Assembly.
- As of the 5th of this month, the price of rice in producing areas was 175,368 won per 80 kg, down 12% from a year ago.
- To address the oversupply of Korean beef, the government will reduce the number of cows by slaughtering 5,000 and banning breeding of 5,000 cows.
Government Intervenes in Rice and Korean Beef Markets
Measures to Stabilize Supply and Demand
The government has announced plans to purchase 100,000 tons of new rice and reduce the number of Korean beef cows by an additional 10,000. This decision aims to address concerns over falling prices due to increased supply in both markets.
The Ministry of Agriculture, Food and Rural Affairs revealed the ‘Rice and Hanwoo Supply and Demand Stabilization Measures’ during a Democratic Party-Government council meeting at the National Assembly. To defend the price of rice in producing areas, the government will dispose of 100,000 tons of table rice produced on 20,000 ha of farmland this year for use as feed, etc. This move, combined with the previously decided purchase of 360,000 tons of public reserve rice, will isolate a total of 460,000 tons of new rice from the market this year.
As of the 5th of this month, the price of rice in producing areas was 175,368 won per 80 kg, down 12% from a year ago. The government plans to purchase an amount exceeding the estimated consumption amount based on this year’s expected rice production, which will be announced by Statistics Korea early next month.
To address the oversupply of Korean beef, the government will reduce the number of cows by slaughtering 5,000 and banning breeding of 5,000 cows. This is an additional 10,000 cows to the existing reduction (139,000 cows). The Korean beef industry estimates the appropriate number of Korean beef cattle to be raised domestically at around 3.2 million, and the number of cattle raised nationwide in June this year was around 3.56 million.
The government also presented mid- to long-term measures to adjust the supply and demand of rice and Korean beef. As rice consumption is likely to continue to decline, a ‘cultivation area reporting system’ and ‘regional reduction area allocation’ will be introduced to effectively reduce the rice cultivation area. A system will be established to provide incentives to farmers who participate in adjusting the rice cultivation area, and to impose penalties on farmers and local governments who do not comply.
The plan is to shorten the breeding period for Korean beef from the current 30 months to 24-26 months to reduce production costs, and to increase the smart farm penetration rate to 30% by 2027.