Unpopularity of staple crop continues amid low-carb diet trend
By Lee Kyung-min
This year's rice harvest is expected to be markedly better than 2021's, an upbeat outlook given the concerns of brewing the global food crisis, amplified by Russia's invasion of Ukraine.
Many economists and food experts say the concerns come from years of extreme weather conditions attributable largely to climate change that long predate the spike in logistics and shipping costs triggered by the COVID-19 pandemic.
However, fears of what could spark a violent unrest in some countries don't carry much weight in Korea, where farmers are grappling with the sinking price of rice ― a textbook indication of market oversupply.
The longstanding problem persists. It certainly is not for the lack of trying.
The Ministry of Agriculture, Food and Rural Affairs has announced policy responses to counter the rapidly weakening demand every year. It has run campaigns to promote rice consumption. Years of research efforts by the ministry-affiliated Rural Development Administration led to the development of floury rice. This new kind of rice is easier to store and more suited for food processing as a way to reduce wheat imports and bolster the country's food self-sufficiency needs.
All these efforts not withstanding, local consumption of the staple crop is showing no signs of climbing, largely because many young Koreans associate rice intake with weight gain.
This body-conscious demand stagnation is bound to be overwhelmed by supply, a reason the government and farmers tussle every year over how much excess rice should be bought with taxpayers' money.
Everything but rice 
Data from the Korea Agro-Fisheries & Food Trade Corp. (aT) showed the price of 20 kilograms of rice stood at 45,537 won ($34.2), as of June, down from 50,426 won in April. The figure is a further drop from 52,378 won in January.
The continued downtrend stands out since Korea is experiencing rapid inflation over the past few months. The country's headline inflation rose 6 percent last month, the highest since 6.8 percent in November 1998 amid the fallout of the Asia financial crisis.
Rice could further sink in price, as indicated by Statistics Korea data on the country's annual rice consumption per capita. The figure slumped to 56.9 kilograms last year, about half from 116.3 kilograms in 1991. This means barely one person consumes 156 grams a day, less than a packet of 200 grams of instant rice.
For context, the United Nations Food and Agriculture Organization (FAO) Food Price Index rose to an all-time high of 159.7 in March due to Russia's invasion of Ukraine.
The index, which measures monthly changes in international prices of a basket of food commodities, spiked 19 percent in the first three months of this year. It dipped for the following three months to 154.2 in June, a level still high from a year earlier.
The World Food Programme (WFP), a food-assisted branch of the U.N., said in June that the number of "severely food-insecure people around the world has more than doubled to 276 million with a real risk that multiple famines will be declared in 2022, and 2023 could be even worse."
Lose-lose game
"It could be a lose-lose game for both the government and farmers in the long term," Korea Rural Economic Institute senior research fellow Kim Sang-hyo said.
Under the law, the government can buy rice if the excess volume is more than 3 percent of the annual estimate or if the price falls by over 5 percent from average figures.
Korea produced 3.88 million tons of rice last year, up 10.7 percent from 2020. This year's estimate for production is 3.8 million tons, whereas that for consumption is 3.5 million tons.
This, according to Kim, means the government having to spend more of taxpayers' money to make ends meet for farmers that are not inclined to switch to other labor-intensive crops for profit.
"The rice business is largely automated and requires less labor compared to other vegetables or fruit, for instance," he said. "Farmers will not seek other agricultural business choices unless the government provides significant tax and investment or other policy incentives."
The institute said in its annual Agricultural Outlook 2022 report that rice production will outpace consumption by 218,000 tons in 2031.
This is similar to this year's estimated oversupply of 254,000 tons, indicating the chronic market oversupply issue will not find a breakthrough any time soon.
The government has purchased a combined 270,000 tons of rice this year. But the measure did little to allay the concerns of farmers ― a reason why it bought an additional 100,000 tons produced in 2021 last week. But farmers say the 100,000-ton figure is far short of the range of 200,000 to 300,000 tons needed to help them.
The National Agricultural Cooperative Federation (NongHyup) expects the country will see an oversupply of as much as 316,000 tons of rice this year.
