Seoul endorses shipment of rice to Pyongyang

The South Korean government on Tuesday endorsed the spending of funds needed for providing rice and raw materials for light industry to North Korea, the Unification Ministry said. Unification Minister Lee Jae-joung presided over a meeting of an inter-Korean exchange and cooperation promotion committee, where the main agenda was the South's planned shipment of 400,000 MT of rice worth US$170 million and raw materials worth $80 million to the North.

Last month, South Korea agreed to provide raw materials to the North in June to help it produce clothing, footwear and soap in exchange for its natural resources. The two Koreas reached a similar swapping agreement in 2005, but it has never been implemented due mainly to the North Korean nuclear dispute.

Under the agreement, the rice shipment, which will consist of 150,000 MT of domestic rice and 250,000 MT of imported rice, will be sent to the North late this month in the form of a loan to be paid back over the next 30 years with a 10-year grace period. Seoul hopes to link it with Pyongyang's promise to take initial steps toward nuclear disarmament.

The agreement was already deliberated on by the Ministry of Government Legislation and the cabinet, officials said.