Rice prices to be propped up by government intervention

A total of 450,000 tons of rice will be purchased by the government this year to prop up prices.

Protestors demand government countermeasures for the fallen rice price in Boryeong in South Chungcheong on Sept. 21. [YONHAP]

A total of 450,000 tons of rice will be purchased by the government this year to prop up prices.

Korea will produce about 250,000 tons of surplus rice this year. Rice bought by the government will be added to stockpiles.

The plan emerged after Prime Minister Han Duck-soo, leaders of the People Power Party and senior presidential officials held a meeting Sunday.

An announcement of the plan was made through a press release by the Ministry of Agriculture, Food and Rural Affairs.

"The rice price has continued to fallen since October," read the ministry's press release. "As of Sept. 15, the price fell 24.9 percent compared to the same period last year. The on-year fall rate is the sharpest since relevant statistics was tallied in 1977."

Excess rice should be removed from the market to "return the rice price that has fallen excessively back to the upward trend."

There was an "exchange of opinions on countermeasures for the nosedive of rice prices," wrote Chung Jin-suk, interim leader of the People Power Party, on social media. He called the move a "bold" countermeasure.

The planned purchase was announced two to three weeks earlier than usual, the earliest since 2011.

Around 1 trillion won ($709 million) is projected to spent for this year's purchase of rice for Korea's reserves, according to local media reports.

"The 'market isolation measure' is expected to recover the price of rice that has fallen largely following last year's harvest season to an appropriate level." The ministry added, "The ministry will continue to thoroughly monitor the rice price and trend of the rice distribution market, and push countermeasures in accordance with the supply and demand."

The ministry added that it will expand the cultivation of rice flour, beans and wheat, and to activate rice processing industry to balance the supply and demand of rice.

It costs around 22.9 billion won to store 10,000 tons of rice for two years.

Rice is a key staple food for Koreans, but Korea has been struggling to cope with a falling demand for rice as rice consumption has been on a steady decline in recent decades due to changes in diet and eating habits.

BY JIN MIN-JI [jin.minji@joongang.co.kr]