On September 18, 2014 the Korean Ministry of Agriculture, Food and Rural Affairs (MAFRA) issued a press release announcing the liberalization of its rice market through tariffication. Korea will impose a tariff of 513 percent on imports of rice above a set quota of 408,700 MT beginning January 1, 2015. The announcement was in connection with Korea’s decision earlier this year to move away from a system of rigid import quotas under a WTO-imposed Minimum Market Access agreement (MMA) to a tariff-based system.
Government imposes tariff on the existing mandatory import quota of 409,000 tons after tariffication. The tariff rate is to be finalized via verification by WTO member countries.To Prevent Unlawful Distribution and Expedient Import of Rice, Import Declaration at Fictitious Low Price Plan to ban mixing of domestic and imported rice for sales/distribution starting in 2015.Include rice in the scope of advance tariff assessment by the Korea Customs Service to prevent expedient import of rice via low-price declaration and subsequent disturbance of the domestic market.
As it is also important to maintain the rice tariff rate in the future, the Government intends to continue to protect rice by excluding it from the scope of concession in all FTAs to be negotiated in the future (including the TPP if Korea decides to join) as it has done in the FTAs concluded to date.
To prevent imported rice from being sold disguised as domestic rice and establish wholesome commercial practices in the distribution sector after the tariffication, the Government plans to ban mixing domestic rice with imported rice for sale/distribution starting from 2015.
In addition, the direct payment program to compensate rice-farming income designed to compensate farmers for income loss resulting from a decline in market price was established in 2005 in preparation for the expansion of market opening and the program has been in place to date. Rice price was at 138,231 won/80kg in the harvest season of 2010, but farmers received 165,305 won on average in the direct payment program, which was equal to 97% of the target price (170,083 won/80kg) then. The target price for rice harvested in 2013~2017 was raised to 188,000 won/80kg.
Budget for key initiatives to increase farmers’ income, boost the competitiveness of the rice industry, and the like has been increased by 156.8 billion won in the 2015 budget proposal when compared with the 2014 budget.