Quarantine rules hinder gov’t efforts to tame inflation
Record spending planned by the government to address the rising prices of fresh food is being called into question as critics argue that the measure falls short of effectively addressing the failure to ease quarantine policies that restrict imports of apples and other popular fruit in Korea.
During a meeting of ministers convened to discuss consumer prices on Wednesday, Deputy Prime Minister and Minister of Economy and Finance Choi Sangmok announced a plan to allocate 60 billion won ($45.1 million) in March and April to lower the prices of fruits, vegetables, meat, and other sought-after fresh food items.
“We expect the 60-billion-won package will lower the prices of fresh food by up to 50 percent,” Choi said.
The allocated funds represent the largest amount ever designated specifically to address the rising prices of fresh food, aiming to more effectively counter persistent inflationary pressures.
The announcement comes as overall consumer inflation rose 3.1 percent year-on-year in February, breaching the 3 percent level again. It eased to 2.8 percent in January after remaining above 3 percent from August and December last year, but accelerated again in February mainly due to the surging prices of 55 major fresh food items, which rose 20 percent from the previous year. It marked the steepest increase since September 2020, when those prices rose 20.2 percent.
However, experts remained skeptical about the effectiveness of the multi-billion-won package.
They pointed out that prices of fresh food surged due to heavy rainfall and other adverse weather conditions since the autumn of 2023, resulting in domestic supply being unable to match demand until now.
They argued that supply can only be increased by relaxing quarantine rules on popular fresh food items, but the government’s measure lacks corresponding efforts in this regard.
“The government’s plan can be said to be only focusing on lowering domestically-produced food prices,” said Ha Joon-kyung, a Hanyang University economics professor.
He pointed out that part of the budget will be allocated to offer discounts on the wholesale prices of 13 items, including 1,000 won per kilogram of green onions and 1,800 won per kilogram of tomatoes.
“All these measures may help curb prices in the short term, but not in the long term because they are not meant to boost supply.”
Kim Jung-sik, an economics professor at Yonsei University, emphasized, “Streamlining quarantine measures on the imports of high-demand fruits, especially apples, is crucial to bolstering supply.”
Apple production in Korea dropped 30 percent year-on-year to 394,000 tons in 2023, leading to a 71 percent increase in the prices of the fruit in February. According to Numbeo, a platform providing data on the cost of living by country, Korea currently ranks at the top in terms of apple prices, with 1 kilogram of the fruit priced at $6.82 as of Thursday.
The prices of 18 major types of fruits combined also went up more than 41.2 percent last month to reach a 32-year high.
Importing apples, however, is effectively banned due to stringent sanitary requirements. The quarantine process involves a total of eight steps, often leading to indefinite delays.
But quarantine experts say it isn’t right to abruptly change rules, since the measures were taken to prevent contagious diseases from abroad affecting domestic crops.