Korea Needs to Liberalize Its Rice Market

I realize that I said that my next post was going to be my second installment of “Super Fun Economic Review” about the Korean government's increasing hints about depreciating the value of the Won.

Rest assured, that post is coming. However, it's taking longer than I had anticipated.  In the meantime, I wanted to upload this post.

Just today, I read an article in The Diplomat about Korea's refusal to liberalize its domestic rice market to international trade. A few days ago, I also read a very impressive article about this same topic that was written by Eric Deok-jin Song who works over at the Korea-based libertarian think tank, Center for Free Enterprise (자유경제원).

As the article was written only in Korean, however, I have taken the liberty of translating the article into English.

I think that this is a good time to state that I am not affiliated with the Center for Free Enterprise in any way whatsoever. Furthermore, any mistakes in the translation are mine and mine alone.

The first two picture files in this post were from the original post, but I have added the other pictures myself.

Is rice life? How much longer will the taxpayers' money be spent to subsidize rice? Rice has already been losing its status as the country's staple food. From 1995 to 2014 whereas rice production increased about 10%, the amount of rice that has been imported has increased 8 fold. The only two countries in the world that have not opened up their rice markets are Korea and the Philippines. Continuing to subsidize rice is a waste of the taxpayers' money.

The white signboard that the man is carrying reads "쌀은 생명이다," which means "Rice is Life."
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The Ministry for Food, Agriculture, Forestry and Livestock says, “For the future of the rice market, the best decision that we have made was to begin to import rice, but to impose tariffs on imported rice.”

With the government on one hand that says that the opening up the rice market can no longer be delayed and opposing farmers on the other hand claiming that such a move would cause irreversible harm, the differences between the two sides are sharply contrasted. It should be noted that Korea made a promise to the international community to open up its rice market in the Uruguay Round of multilateral trade talks in 1994.

By claiming that rice is unique to Koreans, the Korean rice market has received “preferential treatment” and has been waived from opening up the market at great cost. What was the great cost? For failing to open up the market, Korea was obligated to import up to 51,000 tonnes of rice in 1995. That obligation has steadily increased and this year, Korea is obligated to import up to 409,000 tonnes of rice this year alone. At the end of this year, Korea's grace period will come to an end. Korea can no longer afford to delay opening up the market.

The first two lines above and below the Korean and the Philippines flags say "The only two countries in the world that have not opened their rice markets are Korea and the Philippines."
The circles and the text in the middle of those circles say "Rice production has fallen from 4,690,000 tonnes to 4,230,000 tonnes.  Korea has had to increase its obligatory rice imports from 50,000 tonnes to 400,000 tonnes.  An average Korean's rice consumption has fallen from 532 bowls per year to 336 bowls per year."
The last line says, "How much longer will the taxpayers' money be spent to subsidize rice? How much longer will we be forced to import rice?  It is time to compete with imported rice."
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Despite having protected the rice market much more and much longer than any other industry, Korea's agriculture industry has barely survived. Despite continuous large-scale investments, Korea's agriculture industry's competitiveness remains at a standstill. Due to a decline in the number of farming households, more and more people have begun to abandon their farms. As a result, only senior citizens and low-income families continue to live in rural areas, which threatens to shrink Korea's agriculture industry even further. Although rice production has increased somewhat, average income has fallen, which has caused a great income disparity.

Opening up the rice market will provide our agriculture market with new opportunities. Korean agricultural products are popular in China. That is because the Korean brand is considered a trustworthy brand by Chinese consumers. Opening the rice market will not lead to imported rice flooding the Korean market but rather an increase in our exports to overseas markets. Now is the time to increase the rice industry's competitiveness and to focus on the debate of raising tariffs.

Korea's agricultural industry stands at a crossroad. It can either crash as a declining industry tends to do or it can find ways to become a competitive industry. Using competitiveness as a springboard, it has to find the right direction in order to become an advanced agricultural industry. It has to extricate itself from all of its excessive protections and move away from its land-intensive production methods in order to pursue more capital-intensive production methods.

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The Confederation of Farmers Alliance that has long opposed the opening of the rice market has already begun to engage in all-night sit-ins and other forms of protests. Instead of engaging in unreasonable protests, they have to embrace market principles and the entrepreneurial spirit. In order to transform the industry into a competitive one, and to transform it from one focused on 공자유전 (耕者有田), which is established in Article 121 of the Republic of Korea Constitution which states that “the State shall endeavor to uphold the notion that those who till the land will use the land,” to one that is focused on 경자용전 (經者用田), which is the notion that those who can manage the land can use the land. Furthermore, the regulations and restrictions on the agriculture industry ought to be abolished.

Only this effort can lead to an increase in new capital investment that is needed to increase the industry's competitiveness and establish an international business that can compete globally.

That large businesses are always opposed to entering the agriculture industry in Korea is worrisome. Dongbu Group, which had built a state-of-the-art facilities in a tomato production facility but faced opposition from farmers groups and had no choice but to discard millions of tomatoes. Dongbu Group had even signed a contract to export domestically produced tomatoes to Japan. However, the farmers and the farmers groups opposed this. After having lost millions, Dongbu Group withdrew from the tomato business.

Toyota, the symbol of Japanese manufacturing, on the other hand, has built and is strengthening their agricultural productivity. The agriculture business is gaining strength to becoming a vital business in the future.

Whenever a free trade agreement has been signed be it with Chile, the United States, the European Union, ASEAN, Australia, or Canada, the farmers have never failed to angrily protest. Yet even with the importing of Chilean grapes, domestic grape production has increased. The beef market has been opened but Korea's beef industry has not weakened. It is the same with other agricultural goods. The farmers have begun to improve their quality, scientific methods, and have begun to become more competitive.

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Although competition and opening up markets can threaten domestic businesses initially, it has in fact strengthened the domestic industry.

Agricultural products have increased in value and improved their income levels. People have to accept this new change and farmers must stop thinking of themselves as farmers and instead think of themselves as “farmakers” and “farmarkets.” Farmers have to accept the entrepreneurial spirit that can only exist within capitalism and only this can ensure the successful development of a competitive agricultural industry.

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Paying for North Korean Cheerleaders?

With the 2014 Asian Games set to begin in Incheon in September, the North Koreans initially proposed to send up to 150 cheerleaders to the games. At the time, the total cost of hosting the cheerleaders and the North Korean athletes were estimated to be around ₩1.5 billion (US$1.45 million).

Since then, however, the North Koreans have declared that they would send up to 350 athletes and 350 cheerleaders. Of course, this does not count the bodyguards and the political minders that the North Koreans will most likely send to ensure that none of their athletes or cheerleaders gets any ideas about defecting.

If South Korea ends up paying for the North Korean delegation as it has in the past during the days of the so-called Sunshine Policy, then I have a feeling that it would cost more than the aforementioned ₩1.5 billion.

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During the negotiations about how many delegates the North Korean government was planning to send (Does it strike anyone else that it is ludicrous for the meeting to have taken place at all?), the South Korean government, which seems to have grown something that resembles a backbone, did not play the game that the North Koreans wanted. A South Korean government official reportedly said:

At past international sporting events, it was customary to provide all accommodation free of charge for the North Koreans, but we decided to adhere to international practice this time. And under Olympic Council of Asia regulations, each country is responsible for the expenses incurred by its athletes and cheering squads, although accommodation subsidies are provided for underdeveloped countries that are sending a small group of athletes.

On top of that, South Korean government officials told the North Koreans that their flags that they wanted to bring were too big and could become a safety issue.

When the North Koreans were told that they were not going to get a free lunch and that their flags were going to be the same size as everyone else, as per their typical behavior, the North Koreans huffed and they puffed and said something about how South Korea displayed an “improper attitude” to the talks.

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The fact that the North Koreans even brought up these ridiculous demands should not come as a surprise to anyone.

North Korea is a nation of thugs – a country that was founded on the principle of taking everything from everyone and giving it to the Supreme Leader. What is money to the North Koreans? To everyone else who lives in capitalist(ish) economies, money is a tool of exchange – it is what people use to trade with others.

And we have to keep in mind that unless forced to do so, no one in the world trades down. People always trade up. What that means is before I decide to pay for a product, I will always make sure that the product will be of higher value to me than the money that I would give up in exchange for the product. When we accept money in payment for our effort, we do so only on the conviction that we will exchange it for the product of the effort of others. In other words, people trade value for value. That is what money is used for.

And where does our effort, the goods that we produce, come from? They don't magically appear out of thin air. We have to use our minds to create something that is worth selling. If we didn't use our minds, we wouldn't be able to create a single thing.

In sum, money is the tool that we use to exchange with each other the efforts of our minds.

That is why money is sacred. That is why we hate those who steal and commit fraud. Thieves, through no merit of their own with the exception of thuggery and skulduggery, take from the rest of us what we have rightfully earned by the sweat of our brow. That is why in a civilized society, thieves are shamed and punished (or at least ought to be).

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What do North Korean officials know about money? They certainly know that it is something that they need to buy luxury cars, French cognac, Uzbek caviar, and Danish pork. But what do they know about earning money? Why go through the trouble of earning money when they can just get easy riches by printing counterfeit money or producing crystal meth or selling women as sex slaves?

They have no rational minds to speak of – only power lust and the desire for unearned greatness. They wouldn't even know how to begin to think of something as being sacred. They are unthinking brutes, and the only good thing that they could ever possibly do for themselves and the rest of the world is to commit mass suicide.

However, now that I think about it, I think I may have been far too charitable to people who live south of the DMZ when I said that everyone who lives in capitalist(ish) economies knows that money is a tool of exchange. There are clearly some people who not only lack that knowledge, but also lack anything that resembles a brain altogether.

Case in point, The Korea Times published an editorial about how Seoul should have been the one to initiate this unbelievable fiasco by having invited North Korea to participate in a regional sports festival in South Korea and offering to pay the cost. The editorial goes on to say that Seoul needs to be more magnanimous and tolerant, no longer citing “international standards” or “popular sentiment.”

Never mind that the North Korean government is responsible for numerous crimes against humanity as well as against South Korean sailors, marines, soldiers, civilians, and diplomats. As far as The Korea Times' editorial staff is concerned, Seoul ought to be more magnanimous and tolerant toward these thugs who have threatened to attack us AND actually attacked us on numerous occasions.

When faced with such incredible stupidity, I suppose there really is only one thing that can be said.

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“Voting Against Their Own Interest” - You should probably stop saying this.

The majority of people in the world, except perhaps the mentally ill, seldom ever claim to be Marxists anymore. Whenever progressives are accused of being Marxists or socialists, they mock their simple-minded opponents and go on their merry way.

However, we have to keep in mind the famous quote about the greatest trick the Devil ever having played was how he convinced the world that he didn't exist.

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The great irony of present-day Marxists is that the majority of people who are either consciously or subconsciously influenced by Marxism have never read any of Marx's works. Then there are those who have read his works and who have failed to understand Marx.

(Joseph A. Schumpeter listed in his book, “History of Economic Analysis” (Page 362, “Concerning the Marxist System”) quite a formidable and hefty set of prerequisites that people have to read in order to properly understand Marx. This probably explains why so many people are reluctant and/or unable to fully understand Marxism.)

Regardless of whether people have read or not read or understood or not understood Marx, many people have uncritically accepted many of his views as gospel truth. And I am willing to bet that most of those people don't even know that they are channeling Marx.

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For example, one thing that I have heard many progressives complain about often is that, especially after having been “influenced” by the “corporate media,” far too many middle to low income earners “vote against their own interest.” For proof simply do a Google search for “vote against their own interest.”

However, we have to ask what people mean by “interest” when they pose their question. In every single instance, when that question is asked, what they almost always mean by “interest” is the interests of the group that the individuals supposedly belong to.

For example, people often ask why ethnic minorities or women vote for conservative parties, or why the low-to-middle income earners vote for tax breaks for the “super rich.” Notice how no one ever asks why a particular woman or member of an ethnic minority group might vote for a conservative politician or why individuals would vote for tax breaks that they themselves might not benefit from immediately. It's always about the group.

This goes back to Marx's belief, which he stated in the Communist Manifesto, that “the history of all hitherto existing human society is the history of class struggles.” As far as Marx was concerned, “interests” are something definite and apart from a person's ideas.

It was a belief that Marx himself contradicted in the same damned book. As Marx was not a member of the proletariat, he conveniently added that “in times when the class struggle nears the decisive hour... a small section of the ruling class cuts itself adrift, and joins the revolutionary class.”

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If it is possible for some people to extricate themselves from the trappings of their own class and its supposedly inherent interests, then the law is really not a law! Too many Progressives, however, don't seem to be able to see the contradiction to question their own beliefs when they talk about people “voting against their own interests.” They believe that the “interest” of a class is obvious and that there could be no doubt about what it is.

I suppose it is much easier to assume that people who do not agree with them are brainwashed class traitors than individuals who genuinely have their own independent minds that happen to be opposed to theirs.

Furthermore, this idea about class interest is an idea that is all too similar to that of racists. Racists tend to believe that members of a race all look and think alike. That they should all behave in a particular way. That there are certain things that all members of a certain racial group should inherently like and dislike. Replace the word “race” with “class” and you get the same argument!

It all comes down to collectivism. Modern-day Marxists (whether they know that they are channeling Marx or not) do not believe in individualism. They may say that they do, but their inner most philosophy seems to say otherwise.

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Edit:

The quote about the Devil may be attributed to Charles Baudelaire but in all fairness, Kevin Spacey did make it sound much better.

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