The government will implement an Agricultural Price Stabilization System this year for garlic and onions. If the average price during the harvest season falls below 80% of the average wholesale price, the government will provide full or partial support to alleviate the financial burden on farmers.
On September 10, the Ministry of Agriculture, Food and Rural Affairs held the first Agricultural Price Stabilization Committee meeting at the aT Center in Yangjae, Seoul, chaired by Vice Minister Kim Jong-gu. The committee reviewed the target items and the method for determining the standard price.
The Agricultural Price Stabilization System, which took effect on August 27 under the revised Agricultural and Fishery Product Distribution Stabilization Act, aims to support farmers when the average price of agricultural products falls below the standard price, even with proactive supply management by the government.
This year, garlic and onions were prioritized due to their significant price volatility and production levels, which can vary based on crop conditions. The selection of target items will be gradually expanded, considering their impact on the national diet, the establishment of proactive supply management systems, and the availability of objective production cost statistics.
During the meeting, some producer representatives suggested increasing the number of items included in this year's program. In response, the government plans to seek additional budget allocations during the National Assembly's review of next year's budget and reconvene the committee later this year to reflect the outcomes.
The standard price for determining support will be set at 80% of the average wholesale price, including all production costs and either the full cost of self-labor or a certain percentage. However, for items that have experienced chronic supply instability and price fluctuations, measures such as managing cultivation area and production volume will be implemented to gradually reach the guaranteed level.
The standard price will be announced annually after the National Statistical Office or the Rural Development Administration releases production cost statistics for the harvest year, following committee review. The average price used for calculating support will be based on the harvest season prices, reflecting market values by including prices for premium, standard, and substandard products.
The new system broadens the scope of price decline guarantees compared to the previous vegetable price stabilization system, which did not cover declines below 60% of the average wholesale price. The new program does not impose such a lower limit and expands eligibility to farmers who meet certain cultivation area and reporting requirements.
Eligible participants must cultivate at least 10 ares (1,000㎡) of the same product and be registered as agricultural management entities or have filed cultivation reports. If they have received insurance payouts from the import stabilization insurance, those amounts will be deducted from the support to prevent double funding.
Farmers seeking support will also face stricter participation requirements in supply management. They must report their actual cultivation area through registration or changes in their agricultural management entity during the planting and transplanting periods. Reports filed with self-help organizations will also be recognized if necessary.
Farmers who do not pay self-help contributions will see their first-year support reduced by 20%, with the deduction rate increasing in subsequent years. Local governments that fail to implement legal supply plans, such as adjusting cultivation areas, will receive differentiated support for stable production and supply projects, and their budget allocations for price stabilization will be reduced.
The items reviewed and the payment ratios will be finalized through announcements by the Ministry of Agriculture, Food and Rural Affairs. The ministry plans to hold regional briefings by the end of the year to inform farmers about compliance requirements and program procedures.
Vice Minister Kim Jong-gu stated, “The Agricultural Price Stabilization System is a key national policy aimed at reducing farmers' anxiety over price declines and enabling them to engage in stable farming. We will operate the system to ensure farmers participate in proactive supply management, leading to stability in agricultural supply and prices.”
* This article has been translated by AI.
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