| An Analysis of the Supply and Demand Status of Western Vegetables and Tasks | |||
|---|---|---|---|
| Author | Park, Misung | ||
| Views | 36997 | Publication Date | 2017.02.17 |
| Original | |||
|
Background of Research In Korea, per capita vegetable consumption is stagnant at 150-170kg a year, and the prices of major vegetables are on the decrease due to the acceleration of FTAs with huge economies, including the Korea-China FTA. Accordingly, vegetable farms' downturn in business is expected to continue. To alleviate the instability of vegetable prices due to these changes in internal and external environments, the government is reforming a system for stabilizing vegetable supply and demand. However, although alternative items should be developed and disseminated at the same time to resolve the oversupply of major vegetables, research on alternative crops is insufficient. On the other hand, with the recent westernization of the diet, demand for western vegetables has been on the steady rise, but their supply and demand structure has not been identified. Therefore, this study aims to diagnose problems by analyzing overall conditions of the production and distribution of western vegetables and examine the possibility of expanding demand by analyzing the consumption structure and preference, thus presenting tasks regarding the direction for production and supply in producing areas and supply and demand of western vegetables. Method of Research We analyzed the general supply and demand status of western vegetables through a literature review including research results and survey data on western vegetables from Statistics Korea, the Ministry of Agriculture, Food and Rural Affairs, the Rural Development Administration, and wholesale markets. Also, we conducted qualitative analysis, identifying problems related to the present situation of supply and demand through interviews on the sectors with limited statistical data with producers, producer organizations, distributors, and seed companies. We analyzed purchase behavior and consumption preference through surveys for households and food service companies, and used KantarWorldpanel's consumer panel data to analyze the possibility of increasing demand for western vegetables through the panel Tobit model and the Almost Ideal Demand System (AIDS) model. Last, utilizing outside experts, we examined the current state of supply and demand of western vegetables in Japan and China, major exporters of these vegetables with vegetable consumption patterns similar to Korea, to analyze overseas cases. Research Results and Implications An analysis of the supply status of western vegetables shows that per capita supply of western vegetables increased by 1.5 times compared to 10 years ago, and the cultivation area rose at an annual average of 6.5% due to changes in consumption patterns of the diet and a rise in demand for food service. The cultivation area and production of most items except lettuce have grown. And Korea imports most western vegetables from China in a period with a relatively small supply of domestic products or in summer when domestic products' quality is not high because of western vegetables' vulnerability to high temperatures. On the other hand, although the exports of western vegetables except sweet pepper are insignificant, the exports of lettuce and asparagus have recently increased. Even though western vegetables need more labor input compared to other vegetables, high farm income and less price fluctuations enable stable production. Therefore, it is necessary to establish cultivation complexes and organizations in producing areas based on the conditions of stable supply, and to build a stable production system of high-quality products in an off-crop season and throughout the year in order to enhance farm income. In terms of distribution, the transaction volume of western vegetables in wholesale markets is not large. Nevertheless, the volume is on the steady rise with domestic cultivation acreage increasing, and various items are traded. In the past, the volume of western vegetables in wholesale markets was larger in summer than in winter. Recently, as this tendency has lessened, their volume has been similar throughout the year, implying steady demand for western vegetables regardless of season. In addition, most western vegetables, including sweet pepper, broccoli, and lettuce with high proportions in wholesale markets, have shown an increase in their volumes in the Garak Market and a rise in prices, indicating the growth of western vegetables. According to the result of analyzing the competitiveness of domestic and imported products, imports show a more stable range of price fluctuations and more competitive quality than domestic products. Therefore, for domestic products to have competitiveness in the market, it is needed to develop regions suitable to cultivate high-quality western vegetables, improve diverse varieties, and first meet the conditions such as stable supply and prices, consistent quality, and selection. The result of analyzing western vegetable consumption behavior according to household characteristics through the panel Tobit model to examine the possibility of expanding demand for western vegetables is as follows: households with higher income, more household members, and higher proportions of the use of large discount stores or the Internet purchase more western vegetables. Accordingly, to boost consumption of western vegetables, it is needed to actively utilize large discount stores or the Internet in the promotion of health functionality and tasting events. Also, the result of examining factors in the expansion of the market size of western vegetables in terms of consumption expenditure shows that a switch from general vegetables to items of western vegetables is a big factor. Nonetheless, because this does not mean a consumption substitution relationship due to price effect, this study estimated the AIDS model to identify the consumption structure of western vegetables and major foods including general vegetables. According to the analysis result, western vegetables are in a complementary relation with general vegetables, implying the complementary relation in which the two can grow at the same time, rather than a consumption substitution relationship. On the other hand, 72.0% of consumers prefer domestically produced western vegetables to imports, and 80.8% usually check the place of origin when purchasing western vegetables. The consumers showed experience in purchasing imported western vegetables in the following order: broccoli (16.4%), lettuce (14.1%), sweet pepper (13.1%), and asparagus (10.0%). That is, the level of all the items was lower than 20%. The food service industry pointed out high and unstable prices of domestic products and difficulty in obtaining them stably as the biggest problem in purchasing western vegetables. However, the companies evaluated that the taste and quality of domestically produced western vegetables are not worse than imports. Accordingly, it is analyzed that if the instability of domestic products' prices is alleviated by enhancing the supply capacity based on the current cultivation technology, there is a high possibility of expanding food service companies' demand for domestically produced western vegetables. The cases of Japan and China give the following implications in terms of supply in areas producing western vegetables and export. First, to supply western vegetables, the scale of a producing area needs not to be large, but it is necessary to establish a new system that can steadily supply various items in small quantity. For an efficient supply system, the scale of an organization such as an agricultural cooperative or agricultural corporation should exceed a certain level. To this end, members' active efforts and cooperation for change are required. It is needed to divide labor and prevent concentrated shipment by planning production and shipment through transactions based on contracts with distribution and processing firms purchasing ingredients and to strengthen consumers' information gathering. China, the world's biggest producer of broccoli and cauliflower, is making efforts to improve and develop varieties and diversify export markets. On the contrary, Korea shows the serious concentration of importers and exporters: 98% of imported broccoli and 82% of imported lettuce are from China, and 99% of sweet pepper exports go to Japan. Like China, Korea needs to diversify importers and exporters of western vegetables as well as developing and improving varieties. Western vegetables need the following direction for responding to changes in market conditions at home and abroad. First, in terms of production and supply in producing areas, it is necessary to construct a system for supplying various items by organizing producer organizations and groups. Also, it is needed to establish a year-round supply system through division of labor and strengthening of cooperation in an organization. In terms of export and overseas demand, importing nations should be diversified. New export markets should be developed, and it is necessary to increase exports in export markets which have been already developed. Additionally, it is required to develop varieties suitable for domestic production and to export seeds. Because western vegetables do not show large consumption by item and a high proportion in domestic agricultural production, they do not have the high necessity of becoming a target of the government's supply and demand stabilization policy or active industry fostering policy. Nevertheless, they provide a new opportunity for agriculture, so it is required to support the infrastructure difficult to be established by the market function. The policy tasks regarding this are as follows. First, organizations for regional technology development and extension should disseminate specialized regional technologies, an expert platform should be established, and the government or public institutions should share and provide market trends and diverse information. In addition, because demand for western vegetables is increasing regardless of changes in consumption of general vegetables, efforts are needed to create value added and expand markets by diversifying varieties. Also, it is necessary to improve the accuracy of statistics and provide support including education and promotion through collecting information related to domestic and foreign market trends. Last, a research investment environment should be created to develop varieties suitable for domestic production, focusing on western vegetables whose varieties can be developed in Korea and targeting huge seed markets abroad. Researchers: Park Misung, Lee Yongsun, Park Hanul, and Park Jiwon Research Period: 2016. 1. ～ 2016. 10. E-mail address: mspark@krei.re.kr |
|||