Evaluation of Agri-Food Export Support Programs

  • 2016-08-11
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Evaluation of Agri-Food Export Support Programs
Published July, 2016

The agri-food export support programs of the Korean government aim to effectively implement export promotion policies for farming businesses and agri-food exporters. Since 2011, the nation’s agri-food trade deficit has soared with the agri-food trade imbalance continuing to widen. The government’s best agri-food purchase program that funds agri-product exports was found to be underperforming in assisting exporters over the past two years. In addition, China and other agri-food importers are increasingly deploying steep non-tariff barriers to trade, which is becoming a major obstacle to agri-food exports.

This report evaluates the eligibility requirements and the performance management of the best agri-food purchase program overall, among other agri-food export support programs. Furthermore, the evaluation includes the results of eliminating the non-tariff barriers to trade of importers based on the review of localization support programs, as well as the performance of export counseling through an analysis of agri-food PR programs. Based on the assessment, we suggest recommendations for the efficient operation of agri-food export support programs.

The evaluation results are as follows: First, as the best agri-food purchase program shows a poor execution rate, its eligibility requirements need to be improved. Recommendations include lowering the interest rate for non-farmers and allowing borrowers to choose the preferable one between fixed and variable rate loans.

Second, agricultural SMEs financed by the best agri-food purchase program underperform in exports compared to non-farmers. Improvement can be made by linking farming communities with poor export performance to the programs that support farming-industry-commerce convergence-type SMEs, thus helping them produce high-value products and expand their exports.

Third, localization support programs are ineffective in dealing with China’s Food Safety Law, and a supplementary measure is needed to respond to non-tariff barriers by region and province of China. These issues can be improved by working with the National Food Safety Information Service to utilize their experts on China’s Food Safety Law and expanding networks by region and province of China.

Lastly, the program that supports participation in international exhibitions has performed better than the one that supports hosting a K-Food Fair in terms of ROI (the number of export counseling sessions versus expenditure) over the past two years. The former’s performance in export counseling can be furthered by enlarging the space of the Korean Hall, thus inviting more agri-food exporters to attend. The latter requires more efficient strategies, including opening the fair in places that do not host any other international exhibitions.