The government has carried out three medium to long-term investments for agriculture and the rural sector since 1992 in order to prepare for the open market initiated by the Uruguay Round. This plan aims at reforming agricultural structure and restoring competitiveness. The government poured 166 trillion won into this program between 1992 and 2010.
Distribution of funds was highly concentrated on improving infrastructure and increasing rice production. Although improvement of infrastructure cost more than expected, it was not entirely effective. Furthermore, greater emphasis on rice production caused increased inventory during a period of low product demand, which resulted in two production adjustment plans to be conducted.
The government tried to increase the amount of land dedicated to farming so that a certain percentage of production would be handled by professional farmers. However, it faced difficulty in reaching its target due to the dropping price of agricultural products and simultaneously rising production costs. Furthermore, such spending may trigger sluggish income in the agricultural sector since improvement in infrastructure would cause increased production although consumption rates are low. Thus the market would be flooded with product and product costs would drop.
Lastly, while KORFTA takes effect and the government pushes the Korea-China FTA ahead, the price of agricultural products is expected to fall. Thus, the plan to improve infrastructure should be reexamined, and rice focused resource distribution should be rerouted into education, welfare, and income stabilization. Environmentally friendly farming should be reinforced through detoxification.
Seo Sewook
Distribution of funds was highly concentrated on improving infrastructure and increasing rice production. Although improvement of infrastructure cost more than expected, it was not entirely effective. Furthermore, greater emphasis on rice production caused increased inventory during a period of low product demand, which resulted in two production adjustment plans to be conducted.
The government tried to increase the amount of land dedicated to farming so that a certain percentage of production would be handled by professional farmers. However, it faced difficulty in reaching its target due to the dropping price of agricultural products and simultaneously rising production costs. Furthermore, such spending may trigger sluggish income in the agricultural sector since improvement in infrastructure would cause increased production although consumption rates are low. Thus the market would be flooded with product and product costs would drop.
Lastly, while KORFTA takes effect and the government pushes the Korea-China FTA ahead, the price of agricultural products is expected to fall. Thus, the plan to improve infrastructure should be reexamined, and rice focused resource distribution should be rerouted into education, welfare, and income stabilization. Environmentally friendly farming should be reinforced through detoxification.
Seo Sewook