Agricultural Products

Government Intervention in South Korean Agriculture Agricultural Products

vegetableAbstract : South Korea's aggregate assistance to agriculture, weighted heavily by rice, was highest after Japan among developed countries, with 89 percent of support paprika stemming korean pears from price intervention measures. South Korean Government assistance in 1987-89 was generally higher for crops than for livestock products. Among the latter, beef and milk were more heavily assisted than chickens, eggs, and pork. Agricultural Products, korean vegetable shopping

Keywords : South Korea, producer subsidy equivalent, consumer subsidy equivalent, price intervention assistance, budgetary program assistance. Agricultural Products, Korean Vegetables

The South Korean Government provides very high levels of assistance to agricultural producers while heavily taxing consumers. Assistance to producers in 1987-89 was about double the level in the United States, 1.6 timeskorean pears that in the European Community, paprika and nearly 80 percent that in Japan, the most heavily assisted developed country. These ratios are derived from producer and consumer subsidy equivalents (PSE's and CSE's) for nine commodities.

South Korea has been transformed since the early 1960's from a poor agrarian economy to a highly industrialized upper-middle-income economy. The Agricultural Products adoption of a "high price policy" for rice and Korean Vegetables barley producers in 1968 started South Korea toward the objective of agricultural self-sufficiency or food security for major crop and livestock products, and a related goal of greater parity between rural and urban korean vegetable shopping incomes. Food security is important to South Koreans because they remember the deleterious effects of major shortages of basic staples under Japanese colonial rule and later during the Korean War.

South Korea's food security and rural development policies are widely perceived as underpinning public korean pears welfare, and economic and political stability. South Korea's Economic Planning Board (EPB), a powerful agency, recognizes thepaprika need for restructuring agriculture to seek international competitiveness, but the process is being slowed by the political reality that a high percentage of South Koreans still have relatives on farms or in rural areas and do not want to see them hurt by farm sector adjustments meant to further trade liberalization objectives.

Agricultural Products

South Korea's import barriers on many products cause conflicts with agricultural exporting countries, such as the United States, that seek to expand trade and reduce overall trade deficits with South Korea. korean pears Paradoxically, South Korea's export-led economy depends on access to foreign markets for commodities such as automobiles, Korean korean vegetable shopping Vegetables textiles, leather goods, and footwear. These divergent domestic interests concerning trade liberalization have created a dilemma for South Korean policymakers.

Although food grains continue to dominate farm income, the shares from fruits, vegetables, and livestock products have risen rapidly as these products increasingly supplement cereals in the Korean diet. Economic and population growth are raising demands for agricultural products and imports. Because of korean pears South Korea's interventionist paprika policies, its highly assisted grain, soybean, beef, and milk producers remain quite inefficient by international standards.korean vegetable shopping

Kinds of Assistance Agricultural Products

Price Intervention - Major intervention policies that distort prices include state trading, import quotas and tariffs, producer price supports, and retail price ceilings for various commodities (1, 30). These policies permit agricultural producers to obtain korean vegetable shopping commodity prices that exceed prevailing world market levels, with the difference paid by consumers through higher prices (20).

The combined effects of all price intervention policies for any given commodity are estimated by a single price gap because of the problem of paprika sorting out their separate effects. Such policies accounted for 89 percent korean pears of total South Korean Government assistance to producers of the selected commodities in 1987-89.

Parastatal Organizations - South Korea's Ministry of Agriculture, Forestry and Fisheries (MAFF) has overall authority for food grain and other price support programs, land and water resource development, fertilizer distribution, credit and marketing programs, and import and export policies. Organizations of a semi-public character, known as parastatals, alsoKorean Vegetables are active in assisting South Korean agriculture through price controls orkorean vegetable shopping product marketing. These include the National Agricultural Cooperatives Federation (NACF), the Agricultural and Fisheries Marketing Corporation (AFMC), the National Livestock Cooperatives Federation (NLCF), and the Livestock Products Marketing Organization (LPMO).

The NACF administers grain and soybean price support Agricultural Products and distribution programs, and is responsible for distributing production inputs, including fertilizer, pesticides, and farm machinery. It supplies farm credit, paprika processes and markets farm products, conducts research, sells various subsidized agricultural inputs, and provides management guidance to farmers.

The AFMC (formerly the Agricultural and Fisheries Development Corporation) has sole authority to import food-use soybeans. Each of the three korean vegetable shopping soybean crushing companies is authorized to korean pears import for crushing, up to allocated levels established by the MAFF based on its determination of an annual import quota.

The NLCF controls the Livestock Development Fund (LDF) and is authorized to make development and production loans to cooperative members. The LPMO marks up resale prices of imported beef to hotels and for general consumption, depositing the net proceeds beyond handling costs into the LDF.

Expenditures from the LDF, Agricultural Products approved by the MAFF, support activities such as livestock research, and infrastructure improvement loans to farmers. paprika Otherkorean vegetable shopping functions of the NLCF include extension work and agribusiness development. The NLCF imports and exports livestock products (except beef), as determined by the MAFF.

The South Korean Government set the LPMO up in late 1988 as the sole state trading organization for importing beef. According to its bylaws, the purpose Korean Vegetables of the LPMO is to increase livestock farmer incomes and stabilize livestock product prices through smooth adjustments in supply and distribution (12, 17).

Individual Product Laws - Individual product laws, an issue in recent U.S.-South Korean trade talks, underpin korean pears domestic subsidies and import protection. These laws are often vaguely worded but are the basis for regulations or guidelines which frequently are not publicized and allow wide administrative discretion. Commodity-specific individual laws include, among others, the Food Grain and Feed Management Acts of 1950, the Livestock Law, and the Animal Quarantine Act.

The grain management laws of 1950 are still the basic legal authority that is central to government farm policy. Under these laws, the Government is the ultimate authority to approve or deny import licensing.

Budgetary Programs Agricultural, prouducts, korean vegetable shopping Products Aggregate outlays for 10 budgeted programs of assistance to agriculture increased 37 percent between 1987 and 1989, continuing the strong uptrend of recent decades. Korean Vegetables Budget allocations for development programs designated as "Agricultural Development," "Irrigation Development," and "Agricultural Infrastructure Development" paprika amounted to 76 percent of the 1989 total budget of 1.12 trillion won ($1.67 billion) and reflected the greatest areas of growth in 1987-89 (table 1). (In tables 2 and 3 showing calculations of PSE's and CSE's, government budget assistance under these 10 programs is aggregated into four generalized categories (inputs assistance, marketing assistance, infrastructure support, and regional support) under the heading "Policy Transfers.")

Merchanization, through credit supplied by the NACF, is still strongly encouraged, primarily because it enhances the korean pears productivity of labor for rice and allows time to establish a supplementary crop of winter barley or greenhouse vegetables. The korean vegetable shopping Government has maintained a dominant role in large and medium-scale projects that include forest land reclamation, tidal land development, irrigation and drainage facilities, and farmland rearrangement of small fragmented fields after the land is leveled.

Under the Saemael (New Community) Agricultural Products initiative, investment projects continue to be undertaken to improve rural living conditions by providing sanitary water supply systems, better sewage systems, housing, and village reconstruction. paprika Other projects include paving roads and rural electrification. To Korean Vegetables enable the marketing network to handle the increased volume and variety of agricultural products, the korean vegetable shopping Government is modernizing markets while seeking increased private ownership of wholesale outlets.

In 1987-89, producers of chickens, eggs, and hogs received a higher proportion of total government assistance from budgetary programs than did producers of other commodities. Budgetary assistance was relatively morekorean vegetable shopping important to livestock producers than to crop producers, although rice growers received the greatest absolute benefit from such programs.

Assistance to Crop Producers Agricultural Products

Food Grains - Rice's 39-percent share of farm output and status as the major food grain make it the korean pears keystone of South Agricultural policy and give it great weight in the average level of assistance to agriculture. Under the dual price paprika system for rice and barley, support prices are paid to producers. Consumers pay prices below the NACF's cost of acquisition andKorean Vegetables handling but still above world price levels. This arrangement is reflected by increasing deficits in the Grain Management Fund, which finances NACF purchases korean vegetable shopping of significant shares of the total outputs of rice, barley, and more recently, soybeans. Government support for rice includes a ban on imports.

Rice producers received 90 percent of their assistance in 1987-89 from price intervention policies (table 4). Government budget outlays constituted the remainder, with infrastructure support and marketing assistance most important.

Food grain consumers in 1987-89 were taxed heavily but at lower levels than producers were assisted. Subsidized rice was provided to institutions, including public hospitals, police forces, and the military.

The high level of government assistance to barley producers (89 percent) reflects the continuing incorrect perception of barley as a major food grain rather than an important secondary and korean pears complementary crop to rice. Domesticpaprika barley is now used primarily in livestock feeds and in producing malted beverages, including beer. Food usekorean vegetable shopping of barley was less than 2 percent of total food grain use in 1987-89. Subsidies to producers included price supports and collection losses on credit extended for purchases of fertilizer, seeds, and other chemicals.Agricultural Products

Corn - Corn is the major South Korean feed grain. Imports accounted Korean Vegetables for 98 percent of corn use in 1987-89. In 1987-89, South Korean corn producers received total government assistance equivalent to 76 percent of the value of corn output (table 4). Budgetary assistance was mainly due to subsidized fertilizer prices.Agricultural Products

The NACF, as the government buying agent, purchases all corn offered by farmers, selling the great bulk of it to feed mills and the rest to companies of the Korea Corn Processors Association. Feed manufacturers are forced to buy domestic corn from the NACF at its cost of acquisition and handling, which continues to be several times greater than the import price.paprika Since 1984, individual feed mills and the NLCF - as well as the Korea Feed Association, formerly the sole importer - have been authorized to import feed corn

Soybeans - Almost all of Korean Agriculture Korean Vegetables Products the domestic soybean output is for human use. About 80 percent of soybeans consumed are imported under quotas, korean pears subject to a 3-percent tariff that began in 1988. Assistance to South Korean soybean producers in 1987-89, indicated by a PSE of 86 percent (table 4), was essentially paprika the same as levels for rice and barley. Budgetary subsidies provided about 10 percent of total assistance, primarily for inputs such as seed and fertilizer, for marketing assistance, and regional and infrastructure support. The MAFF emphasizes soybean production through high price supports, budgetary assistance, and border policies (27).

Consumer taxes on soybeans were Agricultural Products relatively high in 1987-89 at 79 percent of total consumer cost, about the same as on rice and barley. The cost of domestic korean pears soybean price support programs and the effects of import quotas and restrictions are passed on to consumers, which keeps prices for soybeans very high.

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