By Cho Jin-seo
President Lee Myung-bak called for strong action to control rising food prices, Thursday but he received little support from officials in the finance and agricultural ministries that same day.
Despite Lee’s rhetoric that stressed the “livelihood of low-income citizens,” the actual policies announced on the same morning jointly by officials from six ministries turned out to be a continuation of what is already in place.
The core of Thursday’s announcement was tighter price monitoring of vegetables, meat and fruit over the next three weeks, and promoting price competition in those markets in the long term. In his weekly cabinet meeting on Thursday morning, President Lee said he is very worried since Chuseok, for which people buy fruit, meat and fish for family parties and rituals is just around the corner.
“Food prices tend to soar before Chuseok. Furthermore, I’m worried that Typhoon Kompasu will cause big damages to the harvest,” he said in the meeting held at a wholesale food market in Guri, Gyeonggi Province. He also ordered the customs process for imported agricultural items to speed up.
Korea is already one of the most expensive countries in the world for fresh fruit, meat and vegetables — a large watermelon can cost more than 24,000 won ($20) in big cities these days.
Fresh food prices have risen by about 20 percent on average in August compared to the same period last year, while the overall inflation rate was estimated to be only 2.6 percent, according to a Statistics Korea’s report published earlier this week.
The urgency of the president’s message apparently did not reach the Gwacheon government complex the same morning. In their joint press briefing, officials from six ministries admitted that there is nothing special about the government’s anti-inflation measures this time, and gave the impression that they are not as worried as the President about inflation for food prices.
“Actually, the government does these kinds of things all the time and at any place,” Kang Ho-in, deputy minister of strategy and finance, told reporters regarding the enhancing of price monitoring. “The implication of this particular announcement is that various ministries must now join forces to fight inflation, so that the benefit of the economic recovery reaches low-income households.”
Another official from the Ministry of Food, Agriculture, Forestry and Fisheries expected food prices to return to “normal levels” after Chuseok.
Such assessments by government officials are far more optimistic than the private sector’s view. On Wednesday, the Samsung Economic Research Institute, a think tank, urged the government to introduce urgent measures to improve the supply of food, especially that of crops.
“Rising prices of core crops and ‘agflation’ are simultaneously raising anxiety,” it said. “The global price rise is expected to influence the Korean consumer price index from November, because there is usually a gap of six months between the global supply price and the domestic consumer price.”
Globally, meat prices have reached a 20-year high, the Financial Times reported on Thursday. Prices of grains and other food commodities have also been rising fast over the past few months as adverse weather conditions have reduced harvests.