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MIN Seung-Kyu

Food Insecurity: Korea's Rice Question

MIN Seung-Kyu

Apr. 28, 2006

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Before the conclusion of the Uruguay Round in 1994, everyone in Korea was in favor of supporting the nation's agriculture from slow demise regardless of its cost. Over the past 10 or so years, however, that sentiment has weakened substantially; instead, many people today maintain, "In this age of free trade, why not import foods and abandon money-losing farming business altogether?"

From a purely economic point of view, this argument makes sense. Korea's average farm production cost is hopelessly high compared to that of other grain-exporting nations, as much as five times more expensive in the case of rice.

Although one can imagine giving up some farming, we should think twice when it comes to rice production. It is not simply a question of comparative advantage, or of benefiting urban consumers in the form of cheaper grocery bills. Rather, it has more to do with food security. What if global rice production abruptly falls for some reason? Or what if major rice-supplying nations refuse to sell to others in order to raise the price?

This is not just an unfounded fear. The UN Food and Agriculture Organization and the World Bank have published reports warning against a long-term food shortage. FAO, for example, said, "The world population in 2025 will be 8.5 billion, 3 billion higher than now, while food production cannot catch up with the rising population which will inevitably lead to large-scale hunger."

Despite criticism of blatant violation of free-trade rules, the US and EU governments have continued pampering their farmers with huge subsidies. It is because they know fully well that they will need domestic stockpile of cereals once a food crisis develops in the future.

Meanwhile, the major rice paddies in Asia, including those in China, India, Thailand, Vietnam, and Bangladesh, are witnessing a noticeable decline in rice production as farming populations migrate to urban areas in search of better-paying jobs, leaving their farmlands untilled. In particular, China , by far the biggest rice producer in the world, is witnessing a steep fall in production of the all-important staple.

Since the 1970s, the worldwide per-capita grain consumption rose steadily until it hit the wall in 1985. The main reason was the rapid population increase in developing countries. By some estimates, the share of developing-nation population in the world will be as high as 83% in 2025, which bodes ill for the future global food situation. This will be exacerbated by the rising purchasing power of consumers in the developing countries who will demand more food with better nutrition.

For example, compared to traditional diet patterns of Asians consisting mainly of rice and vegetables, meat-centered eating habits will necessitate more consumption of grains in the form of production input. That's because it takes typically 10 pounds of grain as the feed for cattle to produce one pound of beef.

Going back to the original question of whether to give up rice farming as we know it, policymakers should be extra careful in deciding the matter by thinking at least 30 years ahead. Currently, Korea's food dependency ratio is more than 70%. Excluding rice, whose domestic production meets 95% of total need, the domestic production ratio of the remaining cereal items barely go beyond 5%.

For the past 30 years since the mid-1970s, Korea has been a faithful believer of the theory of comparative advantage and international division of labor. The government has encouraged farmers to stop growing items deemed no longer viable, such as wheat, corn, beans. If the nation now foregoes rice for the same reason as for the other major staples in the past, it risks a serious trouble ahead. It would be sheer folly if some officials think we could keep importing food even when a food crisis unfolds.

The more disconcerting fact is that the nation's farmers are fast losing enthusiasm for staying in business. According to several surveys, the share of people in farm villages who responded that their life would be better in 5 years was no more than 10%.

Despite astronomical amount of subsidies, the latest figure announced by the government being 119 trillion Won (approximately US$125 billion), the farming families are still skeptical about the government's willingness to allow the nation's rice farming to prosper for generations to come.

The business of growing rice in Korea is no longer profitable. That's a fact. Given the coming food shortages in global scale and rising importance of food supply in national security, however, it is necessary to help rice farmers to keep their livelihood on their land. We are at a crossroads of what to do about this strategic industry.

Adapted by Sangho Chung

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