Government intervention in South Korean agriculture

World Agriculture, June, 1991 by J. Albert Evans

The NLCF allows subsidized imports of swine (cattle and poultry also) for breeding purposes, subject to a tariff. Other benefits provided livestock producers include loans for livestock purchases and subsidies for pasture and other forage production. The NLCF also operates rural livestock markets. It collects pigs produced by large growers through purchase or consignment, and arranges transportation to NLCF slaughterhouses in urban areas.

Chicken - Chicken accounts for 98 percent of total poultry meat production and consumption in South Korea. The broiler industry will continue to grow with increasing consumer income, an expanding fast-food industry, and population growth.

Assistance for chicken producers (34 percent in 1987-89) is mainly accomplished through border restrictions, but sometimes the MAFF stabilizes producer prices through market purchases of chicken. Imports of fresh, chilled, and frozen chicken are highly restricted and subject to a 20-percent tariff. Canned poultry meat and turkey imports were liberalized July 1, 1987 (28).

The South Korean Government is subsidizing eight broiler companies to aid in integrating their operations. The industry, mainly controlled by large operators, realizes the need for increased efficiency to become internationally competitive within the next decade.

Eggs - Government assistance for egg producers (26 percent in 1987-89) is accomplished mainly through border restrictions that limit imports. Imports of eggs and egg products had been banned under the Government's Import Surveillance System until it was abolished January 1, 1989. Subsequently, shell eggs and dried egg yolks may be imported, subject to a 30-percent tariff, which is likely to continue for at least another 3 years. However, domestic production of fresh eggs currently is sufficient to satisfy demand. The South Korean chicken industry may soon become competitive enough to export chicks for breeding.

Milk - Nearly 90 percent of South Korea's milk output is consumed fresh. The comparatively high level of assistance to milk producers in 1987-89 (64 percent) stems from government established prices for raw milk and from highly restrictive border policies that ban most dairy product imports by the NLCF, the only legal importer (18, 24). Dairy processing companies purchase raw milk directly from producers at prices set by the Government after negotiations that include producers, processors, and the MAFF.

South Korea's dairy industry is a recent development, beginning with the purchase of 2,000 Holsteins from the United States and Canada in 1962. The dairy herd size now exceeds 500,000 animals, all Holsteins. The Government, through the MAFF and parastatal organizations, has directed the development of the industry from its inception. Growth of the industry is likely to slow in the 1990's compared with the 1980's because the shortfall in domestic milk output has been greatly reduced, even as consumer awareness of milk has reached a high level.

Growth in milk consumption has averaged about 19 percent annually for more than a decade. Before the mid-1970's, use of milk and dairy products was very low because of limited production, lower per capital incomes,