Revised rules set farm price-stabilization criteria

Revised rules will take effect Aug. 27 and set standards for a price-stabilization system to ease farmers' business risk.

The system will pay all or part of the difference when a farm product's annual average price falls below its benchmark. The benchmark must at least cover production costs and account for output and supply-demand conditions. The rules also set two-year terms, renewable once, for members of the agricultural price-stabilization review committee, whose chair may hear from officials, experts and interested parties.

Authority to establish and operate agricultural supply-and-demand management centers is delegated to provincial governors. The centers support regional planning, stable production and supply programs, and surveys and analysis of crop supply-and-demand trends. They must have personnel and expertise, as well as systems to collect, analyze, manage and provide information.

The supply-management direction calls for managing cultivation areas for key crops, controlling pests and expanding disaster-prevention facilities from cultivation through shipment.

The revision also permits support for producer groups and buyers in contract-based agricultural trade when they absorb losses from production or shipment adjustments, including purchases for stockpiling and changes in a product's sales channel or use.

Provisions governing the designation and redesignation of wholesale-market corporations take effect Aug. 28. Wholesale-market operators must announce selection processes for at least 30 days and assess applicants' business plans and financial stability. Applicants must submit plans covering wholesale price stability, farmer protections and investment in wholesale distribution, while redesignation applicants must also provide reports on operations and management during their prior designation period.

"Going forward, we will communicate closely with the agricultural sector, the National Assembly and experts to effectively pursue preemptive supply adjustments, while operating the system so farmers can farm with confidence despite price fluctuations in agricultural products, including rice," Song Mi-ryeong, the agriculture minister, said.