In November 1995, the "Food Control Law" was abolished and the "Law for Stabilization of Supply/Demand and Price of Staple Food" (the "Staple Food Law") was established. While the purpose of the law is obvious from its title, it does not live up to its name as governmental food control has been decreasing dramatically under the new law. The aim of this report was to expose the flaws of the Staple Food Law by, first of all, discussing the measures laid out in the law to adjust supply and demand and to stabilize price of staple food, and second, by examining the change in the role of the government in controlling rice price policy. This report also proposed a new price policy vision for rice as well as a new income policy vision for farmers after the abolishment of the Food Control Law. According to the Staple Food Law, producers have no obligation to sell rice to the government. They are, in essence, able to sell rice to anyone, and do not have to participate in the Rice Diversion Program. Because of this, the government can not control the price and supply and demand of rice. As a result, the prices of rice have begun to fluctuate greatly, rather than remain stable as they did under the Food Control Law. In order to stabilize these fluctuating prices, it is important that the government regain the degree of control over rice that it had under the Food Control Law by taking such measures as regulating the quantity of imported rice, storing rice as much as possible, purchasing more rice, and so on. In conclusion, the government should also compensate any loss of producers' income due to the fall of rice prices, as well as establish a public corporation to adjust rice supply and demand by purchasing rice from the market when the price becomes too low and selling rice to the market when the price gets too high. Finally, the government should subsidize disadvantageous paddy fields in order to preserve the rural environment.
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