Global Trade Alert

On 18 Sep 2014, the government of the Republic of Korea (ROK) announced that, in order to protect domestic farmers it will impose a rice import tariff at 513 percent from next year. Furthermore, an additional Special Safeguard measure will be implemented, when the amount of imports rapidly increases.

This announcement was followed by the government's decision on rice market tariffication in July this year (see related measures).

The tariff rate applied to the current MMA (Minimum Market Access) for rice imports, 409,000 tons a year (about 9% of national demand) remains at 5 percent. The new tariff will only be applied to shipments above that level.

Although this decision technically opens up the Korean rice market to more imports, the government says that its data show the tariff will protect domestic rice farmers from losing its competitiveness in the local market. The imported rice with a tariff at 513 percent will be up to three times more expensive than local rice.

In the same statement, the Ministry of Agriculture, Food, and Rural Affairs announced a number of measures to support domestic rice industry;

1) Rice farmer income subsidy: 84.5 billion KRW (ca. 79.4 million USD) in 2015
- Increase of fixed subsidy on rice producer: 900,000 KRW (ca. 846 USD) per ha -> 1 million KRW (ca. 940 USD) per ha
- Increase the budget for variable subsidy (85% of gap between the goal price and market price of the year)
: 29.5 billion KRW (ca. 27.7 million USD) in 2014 to 34.5 billion KRW (ca. 32.4 million USD) in 2015 (1474% increase)
2) Lowering interests rates for rice industry
3) R&D for high quality rice products
4) Rice consumption increase measures: 5.5 billion KRW in 2015 (ca. 5.1 million USD)