Due to the recent decrease in grain production in major exporting countries and trade restrictions driven by the COVID-19 pandemic, the FAO Food Price Index increased from 91.0 in May 2020 to 127.4 in August 2021, and Korea’s grain self-sufficiency rate decreased from 43.1% in 1990 to 21.0% in 2019. Korea is increasing grain imports as the world's 7th largest grain importer. However, it lacks awareness regarding the stabilization of the grain supply and demand due to the illusion caused by its high self-sufficiency rate in rice supplies.
The government implements grain supply and demand stabilization policies based on the Framework Act on Agriculture, Rural Community and Food Industry and related master plans, which deal with 1) expanding domestic production, 2) stabilizing imports, 3) maintaining adequate reserves, and 4) establishing a risk management and response system. The budget for the relevant fiscal programs increased from 3.5 trillion Korean won in 2017 to 4.1 trillion won in 2021.
This report analyzed the stabilization policies mainly on food crops (e.g., wheat, beans, and corn) of which Korea has low self-sufficiency and high dependency on imports. The following measures are recommended: 1) For efficient fiscal management, Korea should create a list of heavy consumption items and policies to increase production. 2) It must strengthen international cooperation, diversify its suppliers, and support Korean agri-food companies going global to stabilize grain imports. 3) It should manage reserves per FAO standards and consider public stockpiling of feed grains. 4) It should systematically manage farmland for food security and strengthen its food crisis response system.