Mon, Dec 08, 2008 - Page 11 News List

South Korea unveils support for farm sector

AFP , SEOUL

South Korea’s government yesterday announced a US$2.2 billion plan to prop up the farm sector, which has been hit by a global economic slowdown and weak domestic consumption.

The agriculture ministry said the government would inject 3.25 trillion won into the sector next year to support food and agricultural businesses, bolster rural development and strengthen forestry resources.

South Korea has protected its rice market to support the farmers, allowing imports of only 7 percent of total consumption last year.

But farmers have called for larger state subsidies, as many are suffering from chronic debts because of a steady drop in the country’s overall rice consumption.

Meanwhile, South Korea’s Hynix Semiconductor yesterday unveiled new cost-cutting steps such as early retirement, unpaid leave and lower pay aimed at saving 100 billion won as the global downturn bites.

The move came after the world’s second-largest memory chipmaker asked for about 500 billion won in financial assistance from creditor banks.

Hynix said it would retire about 30 senior officials and cut remaining managers’ pay by up to 20 percent.

Its union has also agreed on an early retirement program targeting those who have worked for more than 10 years, and on two-week unpaid leave between next month and April.

“We hope to save about 100 billion won through our new steps,” a spokeswoman said, adding the move would affect 18,000 workers in South Korea.

Knowledge Economy Minister Lee Youn-ho has said that the government would not consider active state support for Hynix because this would breach WTO guidelines.

Hynix is suffering from falling demand and chip prices amid a global economic downturn.

In the third quarter of this year, the company’s net loss rose sharply to 1.65 trillion won, the fourth straight quarterly deficit.

Hynix shut down two older domestic production lines this year. It has also extended a payment deadline for a partner company’s investment.

Numonyx, a joint-venture company run by Intel and STMicroelectronics NV, has agreed to invest US$100 million by Dec. 31 for a 10 percent stake in Hynix’s plant in China.

Numonyx paid US$50 million to Hynix in October.

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