[Op-Ed] Fully Open the Rice Market to Boost Competitiveness and Protect Consumer Choice

A Uniform 513% Tariff on Imported Rice Makes Both Imports and Exports Difficult

In Japan and Taiwan, rice exports have increased through strategies focused on improving quality.

Import barriers in the rice market still remain. This is because the rice market has only been partially opened, and tariffs continue to function as invisible barriers. Korea uniformly imposes a 513% tariff on rice imported from abroad. There is now a growing demand of the times to eliminate these import barriers as well and fully open the rice market.

Tariff barriers raise the price of imported rice and reduce consumer welfare. Because of these barriers, imported rice becomes more than two to three times more expensive than its overseas market price. Due to these high tariffs, consumers who wish to buy imported rice are forced to pay inflated prices.

The rice market should be fully opened to strengthen the competitiveness of domestically produced rice. Improving rice quality would benefit consumers, enhance competitiveness, and make exports possible. Japan and Taiwan, which experienced circumstances similar to ours, increased exports through strategies centered on producing higher-quality rice.

The reason farmers become impoverished is not market opening. Even if the rice market is opened and cheap rice enters the country, that does not make farmers poor. The reason they face economic hardship is domestic agricultural regulation. Because these regulations force them to continue rice farming even when the unit economics do not work, their profits remain low. To solve this problem, investment in areas such as smart farms should be allowed so that farmers can cultivate not only rice but also other crops, thereby stabilizing farm income.

Concerns about the weaponization of food are unnecessary. Unlike in the past, our country now has a population of 50 million and a per capita GDP of $30,000, making its market very large. Even if another country attempted to weaponize food against Korea, our people would not suffer a food shortage. When a market is large, other countries become eager to sell rice to a large market like Korea.

The rice market should be fully opened to guarantee consumers’ freedom of choice. If the rice market is fully liberalized, consumers will have opportunities to choose from rice at a wider range of prices and with the quality they want. And if agricultural regulations are eased, farmers will be able to earn stable incomes. For the sake of both farmers and consumers, agricultural regulations should be lifted and the rice market should be fully opened as soon as possible.

Ho-jun Wang, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [칼럼] 쌀 시장 전면 개방으로 경쟁력 키우고 소비자 선택권 보장해야

Author: Ho-jun Wang

Date: 2024-04-12

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&idx=26558