Research Reports
The way to balance the supply and demand for rice
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AuthorPark, Donggyu
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Publication Date2007.12.01
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Original
The mid and long-term situation of supply and demand for rice has been analysed. And the way of solving the disequilibrium problem in the case of bumper crop has been studied.
It was estimated that the supply and demand for rice will be balanced and the rice price will go up to 158 thousands won per 80kg at the year 2017 without government intervention. The consumption per capita will go down to 66.5kg in the year of 2017, and that does not deviate from the consumption trend.
Even if the international rice price is over $500 per ton, and the rice market is changed into the tariff system, the rice market will be stable. The price of imported rice considering the DDA negotiation was forecast at 180 thousand 재n per 80kg in the year of 2017, which is 14% higher than the domestic rice price.
The price of imported rice will be 138 thousand won per 80kg in 2012, and 91 thousand won in 2017 if Korea is classified into the developed country status and the international rice price is $400 per ton. A policy program to enlarge the rice supply and shrink the rice demand can be recommended to reduce the shock from the tariff system. The direct payment system should be changed to be coupled with rice production and all the TRQ rice should be supplied to the market. Also the target price of a direct payment program is necessary to be fixed. And the program of supplying rice for processing purpose should be stopped.
But the price of imported rice will be 145 thousand won in 2017 if Korea is classified into the developing country status. In this case, the sale amount of TRQ rice to the market should be increased gradually and the target price of a direct payment program should be changed reflecting the market price. And it is not recommended that the structure of direct payment changes to be coupled with production. There will be no rice import with tariff system when the target price is fixed and more TRQ rice is supplied to the market.
Researchers: Dong Gyu Park, Tae Hun Kim, Sang Hyen Chai, Yong Sa Kong
E-mail address: dgpark@krei.re.kr
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