The government will provide an additional 2.9 trillion won ($2.5 billion) in support to cushion the impact of the Korea-U.S. Free Trade Agreement on farmers and fishermen.
The Finance Ministry plans to make an additional outlay of 2 trillion won in direct financing on top of another 0.9 trillion won in tax benefits for the industry that stand to lose competitiveness with the inflow of cheaper goods under the reduced tariffs.
Support for agriculture will now total 54 trillion won until 2017, including 24.1 trillion won in direct financing and 29.8 trillion won in tax benefits.
The measures announced Monday came after the government said it would provide a total of 49.9 trillion won across the decade in November 2007.
“The expanded support measures aim to iron out business uncertainties for farmers, fishermen and entrepreneurs and raise their competitiveness in the long run,” Finance Minister Bahk Jae-wan told reporters in a news conference.
The protection measures include subsidizing up to 90 percent of losses incurred from competing products from the U.S., up from current 85 percent.
Products covered include red meat, poultry, dairy, soybeans, corn, potatoes, wine and fruit. Self-employed farmers and fishermen will receive up to 3.4 million won if they are forced out of their business because of the KORUS FTA.
Korea’s FTA with the European Union, the world’s largest economic bloc, went into effect in July. The country’s FTA with the U.S. was ratified by the ruling party-controlled National Assembly in November, paving the way for the pact to take effect within a month or two.
“The KORUS FTA is expected to go into effect sometime in February. Working level officials from the U.S. will be in Seoul next Monday and Tuesday to finalize the date,” Choi Seok-young, Deputy Minister for FTA negotiations said.
The country’s trade pact with the U.S. is expected to wipe out at least 12.67 trillion won of local production in the agriculture and livestock industries over the next 15 years, the government estimates.
By Cynthia J. Kim (
cynthiak@heraldcorp.com)
