| Abstract |
This study analyzes the impact of South Korea's rice price support policies on rice production,
government spending, and farmers' income. The analysis reveals that the rice price support policy
has led to an oversupply of rice, and rice production tends to respond to changes in harvest-time
prices with a one-year lag. Additionally, prior to the reform of the direct payment system in 2020,
government spending exhibited an inverse relationship with rice prices. However, since the reform
of direct payment, government expenditures have shown a proportional increase. In other words,
the government's stated policy objective of stabilizing rice supply and demand—emphasized during
the abolition of the target price and deficiency payment in 2020—has not been achieved, while
fiscal expenditures have continued to rise. Furthermore, maintaining rice prices and expanding
direct payments have contributed to an increase in farm income. Based on these findings, this
study concludes that while South Korea's rice price support policy has contributed to improving
farmers’ income, it has failed to achieve key policy goals such as rice market restructuring and
supply-demand stabilization, instead resulting in a continued increase in government spending.
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