Expert committee agrees to streamline S. Korea`s state farm subsidies

By Lee Joon-seung
SEOUL, July 27 (Yonhap) -- A joint government-civilian reform committee agreed
Monday to streamline state farm subsidies in a bid to enhance the long-term
competitiveness of the country's agriculture sector, a senior policymaker said.
Farm Minister Chang Tae-pyong, who co-chairs the 68-member expert committee, said
that a consensus has been reached to reduce the nine types of subsidies provided
to farmers to two and cut the current 288 individual support projects to 100 by
2012.
The official emphasized that while there may be some adjustments in the
allocation of resources, Seoul will maintain subsidies at current levels for the
time being. The government said it will spend 11.2 trillion won (US$8.9 billion)
this year to help farmers cope with an influx of cheap imports, improve
infrastructure and maintain minimum income levels.
"Some subsidies may be discontinued completely, but because there may be others
that get more money, the total amount may actually move up," he said.
The official said that instead of various types of subsidies, all support will
fall under the category of providing public services for rural communities and
those aimed at helping farmers and agriculture businesses facing tough times.
The former includes environmental protection measures and is permitted by the
World Trade Organization, while the latter must be cut gradually under trade
rules.
Chang added that the main goal of the changes will be to make it easier to offer
assistance by reducing confusion for farmers and overall administrative costs.
According to a recent World Bank report, South Korea, the world's 15th largest
economy, ranked 25th among the 30-member Organization for Economic Cooperation
and Development in 2008 in terms of the per-capita gross domestic product of its
farming households. Agriculture output has remained unchanged at around 41
trillion won since 2005.
The minister, meanwhile, said that a committee panel tasked with addressing South
Korea's tariff quota system for rice imports has held two rounds of talks so far
and aims to come up with an action plan by the end of the year.
Seoul agreed to maintain its import quota system in 2004, but a steady drop in
domestic demand has led to a reevaluation of that stance. Under the system, South
Korea has to buy rice from countries such as China and the United States
regardless of consumption, putting an extra burden on the government and
affecting prices.
yonngong@yna.co.kr
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