On the 27th, it was learned that, ahead of the implementation of the "agricultural product price stabilization program" at the end of August, the government is reviewing measures to prevent overproduction, including strengthening the cultivation area management system. The agricultural product price stabilization program is a scheme in which, if the market price of an agricultural product falls below a reference price, the government makes up part of the difference. The government plans to decide which items will be eligible for support going forward.
According to a compilation of reporting by ChosunBiz that day, the government plans to designate key items by city and province and then set appropriate cultivation areas to prevent agricultural products from being overproduced. It was reported that the government is reviewing a plan to exclude farms that do not adhere to the pre-agreed appropriate cultivation area from eligibility for related program support. This appears to reflect concerns that the possibility of overproduction must be blocked in advance before the price stabilization program is implemented. In that case, prices continue to fall and the amount of fiscal input by the government increases.
The government is also reviewing setting a ceiling so that the amount of support under the price stabilization program does not exceed the amount received by enrollees in the agricultural income stability insurance. Agricultural income stability insurance is a farm income safety net system that compensates farmers for losses caused by market price declines. Depending on the insurance premium paid by the farm, up to 85% of the loss can be compensated. The intent is to design the system so that support through the price stabilization program does not exceed the policy insurance compensation for which farms directly bear the expense.
In addition, it is known that the government plans to revamp the agricultural product stable production and supply support program budget, set at 37.7 billion won this year, so that at least 50% (about 8 billion won) of the year-over-year increase is used for measures such as distribution and supply-demand control. The stable production and supply support program provides funding to improve growing conditions when supply is short and funding to adjust volumes when supply is excessive.
An official at the Ministry of Agriculture, Food and Rural Affairs said, "We are at a stage of discussing various measures, and it is difficult to confirm specific details."