South Korea will place its top policy priority on stabilizing prices of agricultural goods amid concerns that recent heavy rainfalls could disrupt supply and cause price surges of daily necessities, the nation's top policymaker said Thursday.

   "As agricultural goods are closely related to the livelihood of low- and mid-income people, we will place our policy focus on their short-term price stability by adjusting supply, lowering tariffs and expanding the amount of imports," Finance Minister Bahk Jae-wan told a price stabilization meeting.

   The meeting was held at the headquarters of the state-run farm product distribution company located in southern Seoul in a symbolic gesture that the government is serious about the stability of prices of agricultural products.

   Torrential rains pummeled the upper part of South Korea, including its capital, Seoul, last week, leaving dozens of people dead. Vast farmlands were also submerged.

   Agricultural products are among major factors that keep pushing up the nation's consumer prices, which jumped 4.7 percent in July from a year earlier, the largest gain this year. In July, the fresh food price index jumped 9 percent, the highest in four months.
"We believe that the recent downpour will have a limited impact on inflation as damage (on farm lands) is not that serious," Bahk said. "But there are still chances that it could lead to short-term price instability by causing a delay in its shipment process."

   He asked for the agriculture ministry to cope with such possible situations by unloading more of its reserves.

   The minister underlined the importance of stepping up efforts to cope with the growing impact of climate change on its agricultural sector.

   "As erratic weather conditions are becoming commonplace and a phenomenon that confronts the whole world, we will intensify our response from the structural point of view," Bahk said.

   "We will strengthen our agriculture-related monitoring and expand reserves of major grains in order to induce short-term supply and price stability," he added.

Source: Yonhap News (Aug.4, 2011)