Catching high prices...'cabbage commissioner' 'radish chief' revived?

Vice Minister of Oceans and Fisheries Park Sung-hoon (C) checks the status of the release of government stockpiled seafood and a seafood discount event at Hanaro Mart department store in Seocho-gu, Seoul, on Feb. 2. Yonhap

The government has decided to make price stability a top policy priority, with consumer prices rising to the highest level since March last month. In particular, the government has ordered vice ministers of each ministry to become price stability policy officers and take responsibility for stabilizing prices of minor items. There is also talk that the "cabbage commissioner" and "radish chief" who were raised during the Lee Myung-bak administration as the government sought to control prices of major items will be revived.

"We will immediately launch a special price stability system for all ministries to make price stability a top policy priority," Deputy Prime Minister and Minister of Strategy and Finance Chu Kyung-ho said on Feb. 2. "Inflation is expected to decline at a slower pace than expected due to geopolitical risks in the Middle East and abnormally low temperatures," Chu said in a speech at the Emergency Economic Ministers' Meeting and the Ministerial Conference on Price Relations held at the Government Complex in Seoul.

The government has decided to significantly expand the number of discounted items and discount rates for 14 types of kimchi ingredients, including cabbage and radish, by investing a total of 24.5 billion won, the largest ever. To stabilize food and restaurant prices, new quota duties will be applied to eight imported fruits and food ingredients, including bananas, mangoes, whole and skimmed milk powder, butter, cheese, and cocoa. The government will also raise the limit of the agenda purchase tax credit for agricultural products by 10 percentage points and extend the VAT exemption for imports of coffee, cocoa, and processed food products such as kimchi until 2025.

To ease the burden of winter living expenses, energy vouchers and discounts on gas bills for households on the basic living allowance this winter will be maintained at the level of last year's temporary expansion during the winter season. Support for winter heating costs for social welfare facilities such as senior centers will be expanded to 400,000 won, and daycare centers will be included in the gas bill discount program. The government will also expand the cash-back incentive for gas bills by up to three times to promote a culture of voluntary energy conservation.

At the meeting, Vice Premier Chu ordered, "Vice ministers of each ministry to become price stability policy officers and thoroughly examine the price stability of small items with the determination to take responsibility for themselves."

As the government emphasizes stabilizing prices of small items, there is a possibility that price control of major items will be in full swing in the future. In 2008, the Lee Myung-bak administration selected 52 items to manage the so-called 'MB Price Index'.