“Four Bills That Would Destroy Agriculture” Is the Right Term

Samsung Electronics produces too many semiconductor chips, causing prices to fall. The government then steps in and is required to purchase the excess chips, and if the price does not reach the “fair price,” the government is obligated to pay the difference. If Hyundai Motor produces too many cars and there is an oversupply of vehicles on the market, the government is required to buy them, and if the price is too low, it is obligated to make up the difference. In cases of “warehouse clearance due to business closure” or “fire-sale discounts through tears,” the government is required to purchase those goods, and if the price does not reach the “fair price,” it is obligated to guarantee the difference. Does that make any sense as a policy? Since everyone knows such a policy is absurd, no politician even proposes it.

Yet there are politicians proposing and trying to implement exactly this kind of absurd policy. Of course, it is in the agricultural sector rather than electronics or automobiles, but the substance of the policy is identical. It would compel the government to purchase surplus rice and, if rice prices fall below the “average annual price,” require the government to pay the difference. This is the substance of the proposed amendment to the Grain Management Act, which the Democratic Party and other opposition parties passed unilaterally in the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee.

The opposition also passed three other agriculture-related amendment bills on its own, in addition to the proposed amendment to the Grain Management Act. The proposed amendment to the Act on Distribution and Price Stabilization of Agricultural and Fishery Products contains a provision to compensate for the gap between the market price and the benchmark price for certain fruits and vegetables. The proposed amendment to the Agricultural and Fishery Disaster Insurance Act excludes premium surcharges for damage caused by natural disasters when calculating insurance rates. The proposed amendment to the Agricultural and Fishery Disaster Countermeasures Act includes a provision guaranteeing all or part of the production costs already incurred when a disaster occurs. In other words, they would guarantee the prices of what is produced while exempting producers from all of the obligations and responsibilities they are supposed to bear.

Agriculture, Food and Rural Affairs Minister Song Miryung said, “I regret the forced passage of the four ‘farm-destroying laws’ that undermine the constitutional principle of the free-market economy and the future of agriculture.” As the coinage “four farm-destroying laws” aptly conveys, Minister Song criticized each bill point by point, citing the negative effects each would bring about. What Minister Song criticized is nothing especially novel; anyone with common sense could easily infer it. For example, if the government is required to purchase surplus rice and make up the difference whenever rice prices fall below the average annual price, as set out in the proposed amendment to the Grain Management Act, then “farmers will try not to leave rice farming; as a result, rice will continue to be overproduced; and the fiscal burden on the government, which must purchase it, will keep increasing.” Anyone can readily arrive at that conclusion. The same goes for the fact that exempting producers from all of the obligations and responsibilities they should bear will lead to so-called moral hazard. The problem seems to be that in the so-called “Yeouido,” even this level of common-sense reasoning is powerless before “political logic.”

The four agriculture-related amendment bills that have passed the relevant National Assembly committee are, as Minister Song aptly put it, indeed “four farm-destroying laws.” They are anti-freedom, anti-market bills that will ruin farmers and destroy agriculture. That is why I support the minister’s pledge to do everything possible to keep them from passing the National Assembly plenary session. Even so, if they do pass the Assembly, the president must block these “farm-destroying bills” from taking effect, even if that means exercising the veto power.

Hyeokcheol Kwon, Director of the Center for Free Market Studies

Original title: ‘농망(農亡) 4법’이 맞다

Author: Hyeok-cheol Kwon

Date: 2024-11-27

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=1&idx=27109