Yonhap | 2011/03/10
SEOUL, March 10 (Yonhap) -- South Korea will set aside 40 billion won (US$35.8 million) to help local companies secure overseas farmland this year in an effort to insulate the country from sharp gains in grain prices, the government said Thursday.
The Ministry for Food, Agriculture, Forestry and Fisheries said that of the total, 30 billion won will be offered as soft loans to local companies wanting to secure agricultural land abroad, with 10 billion won to be provided to foreign governments that support such investments.
Money going to the foreign governments will come from the country's Official Development Assistance fund that is given out for free,
Resource-poor South Korea imports around 73 percent of all the grain it needs from abroad, but this dependence has trigged inflationary pressures as prices of rice, beans, wheat and corn have all risen in the past months.
The price of beans and wheat rose 6.8 percent and 11.2 percent, respectively, compared to December, with corn prices jumping 22.9 percent in the cited period.
"Private companies will be in charge of investment with the government and state-run corporation such as the Korea Rural Community Corp. giving technical support," a ministry official said.
Seoul has been supporting overseas development of farmlands since 2008. There are currently 60 companies operating farms in 16 countries. These farms cover 24,000 hectares of land that can produce 87,000 tons of various grains per year as of 2010.
Most companies hold land in Russia's far eastern region, with others engaged in Southeast Asian countries and in Brazil.