Starting next year, even if garlic and onion prices fall sharply, the government will guarantee farmers 80% of the average wholesale price.
On the 10th, the Ministry of Agriculture, Food and Rural Affairs held the first agricultural product price stabilization committee meeting at the Yangjae aT Center in Seoul and made this decision. This follows the implementation last month of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, which centers on an agricultural product price stabilization system. The agricultural product price stabilization system is a policy in which the government covers all or part of the difference when the average price of an agricultural product falls below a reference price.
The committee selected garlic and onions as the items eligible for the agricultural product price stabilization system that day. This is because production and prices fluctuate greatly depending on yields. However, as farmers argued that the list of eligible items should be expanded, the committee plans to secure additional budget for next year. If the budget is secured, the committee is expected to convene and designate additional eligible items.
The committee also set the reference price that triggers the agricultural product price stabilization system at 80% of the average wholesale price. This reference price will fully include operating costs, and self-labor costs will be included in full or at a certain ratio. The average price will reflect prices for premium, standard, and lower grades during the harvest season for the crop.
Eligibility for support under the agricultural product price stabilization system includes farmers and agricultural corporations that cultivate the same item on at least 1,000 square meters and have registered their operations or reported cultivation. For farms enrolled in the income stabilization insurance, the payout will be reduced by the amount of insurance benefits received.
An official at the ministry said, "The eligible items and the difference payment ratio reviewed at this meeting will be finalized through a future ministry notice," adding, "We will hold region-by-region briefings through the end of the year to provide guidance on matters necessary for implementing the system."