Seoul seeks ways to deal with huge rice stockpile

A boy eating bread at an eatery in Seoul. The nation's per capita flour consumption registered a high of 33.6kg last year - slightly over half of the 65.1kg for rice.
A boy eating bread at an eatery in Seoul. The nation's per capita flour consumption registered a high of 33.6kg last year - slightly over half of the 65.1kg for rice.PHOTO: REUTERS

Falling local demand amid bumper crop = 1.36m tonne surplus

Rice, which used to be a Korean staple eaten three times a day, has lost so much of its appeal that South Korea is now stuck with a huge rice surplus of 1.36 million tonnes after a record bumper crop this year.

With South Koreans eating less and less rice - only 9.6 times a week according to a recent study - the government is now trying to create new rice-based products in a bid to increase consumption.

The latest is rice-based penne pasta, after rice bread and rice noodles. But habits may be hard to change as people have become used to eating such products made from wheat.

Industry data shows that Koreans spent over 6.3 trillion won (S$7.75 billion) on bread, sandwiches and pastries last year and the nation's per capita flour consumption registered a high of 33.6kg - slightly over half of the 65.1kg for rice.

Rice consumption has halved since the 1970s, as growing Western influence has swayed people to embrace alternative sources of carbohydrates like bread and noodles.

Housewife Jen Soo, 36, said her family of four eat bread or yoghurt for breakfast and rice mixed with multigrains for lunch and dinner.

"People are getting more health conscious and trying to cut down on carbs and adding multigrains to rice for more fibre and nutrients," she told The Straits Times. "And for breakfast, people are going for easy stuff like bread and oats."

Despite the decline in demand, rice farmers have not produced less rice. The reason is that rice trading is a heavily protected industry, with the government often giving subsidies to farmers or buying up excess supply so as to keep prices stable.

Rice is also excluded from some free trade deals with countries including China and New Zealand.

This year, for instance, the government had initially planned to purchase 200,000 tonnes of rice. But due to the surplus and growing concerns of falling rice prices among farmers, the main political parties have proposed that the government buy an additional 150,000 to 200,000 tonnes of rice.

But the more rice the government buys, the higher the cost of storage. As of September, there were 1.36 million tonnes of rice kept in warehouses - way over the recommended 800,000 tonnes. Each tonne of storage costs 3.6 billion won of taxpayers' money a year, according to industry data.

There have been calls for the government to open up the protected rice sector and allow the market economy to take its course, with the Korea Herald newspaper saying that the government should stop buttressing rice prices as "it is simply ridiculous to keep producing something for which there are no places to store, let alone sell".

Some lawmakers and farmers have also urged the government to resume sending 400,000 tonnes out of the extra rice in humanitarian aid to North Korea, a practice started in 2000 during the Sunshine Policy era of friendly inter-Korea relations. It was halted when the relations soured around 2007.

The North Jeolla branch of the Korean Peasants League hosts a Unification Harvest event every year in hopes of sending rice to North Korea, but has not been allowed to do so, according to local reports.

Lawmaker Choi Gyu Seong has also called for the rice surplus to be donated to North Korea, which faces a food shortage amid the worst drought in a century. He said this will help raise rice prices while "preparing for the era of unification".

Meanwhile, the rice-based penne pasta unveiled last week by the Agriculture Ministry received a lukewarm reception.

Housewife Melissa Cho, 35, said: "There needs to be a truly trend-worthy rice-based product, something like Honey Butter Chip, in order to drive up consumption."

A version of this article appeared in the print edition of The Straits Times on November 28, 2015, with the headline 'Seoul seeks ways to deal with huge rice stockpile'. Print Edition | Subscribe