| The Introduction of Positive List System and Countermeasures in Agricultural Sector | |||
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| Author | Park, Misung | ||
| Views | 51304 | Publication Date | 2019.10.30 |
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▣ Background and purpose of research In order to reduce misuse and overuse of pesticide and ensure imported food safety, the government introduced the Positive List System (PLS) on nuts and seeds and tropical fruits since January 1, 2017 and expanded it to all agricultural products on January 1, 2019. Introduction of the PLS has influences on not only the safety of agricultural products but also various fields of agricultural sector such as production, pesticide manufacturing and distribution, and import and export of agricultural products. Hence, this study aims to investigate qualitatively and quantitatively the impact of the PLS on the domestic agricultural sector, and find strategies and implications for each sector to maximize policy goals. ▣ Research method First of all, with an analysis of the literature reviews and overseas case studies, we understood the background and the progress of the PLS and summarized each government's measures in the process. Next, we identified actual situations in the PLS introduction and, for the sake of the stable adoption of the PLS, we conducted surveys of farmers, in-depth interviews with pesticide manufacturers and distributors, interviews for food industry representatives, and expert consultations. Also, we analyzed, with econometric methodologies, changes in the price of the final goods due to changes in domestic supply, and the effects on agricultural imports and exports by introducing the PLS. Specifically, time series method was used to examine the impacts of an increase in pesticide cost on 34 agricultural products. Also, we evaluated the effects on imports and exports of agricultural products in association with the introduction of the PLS by utilizing the gravity model. ▣ Main findings When it comes to implementation of the PLS, domestic farmers and importers of agricultural raw materials expressed their concerns as follows: the small number of available pesticides, no measures for winter crops and perennial crops, unintended remains from pesticide, low awareness and understanding of farmers and complicated application process for the maximum residue limits for imported produces. The government adopted a strategy to ensure a smooth implementation of the PLS with various complementary measures. However, the results of the survey on producers, pesticide retailers, and food industry showed that the system is still lacking and led to immediate tasks for the stable introduction of the PLS. Speaking of the survey on farmers, about 82% of respondents are aware of the implementation of the PLS, while their understanding of details such as maximum residue levels for unregistered pesticides and legal actions in violation of the system is relatively limited. Also, according to the survey concerning pesticide use and practices of safety management, more than 50% of respondents have difficulty using the correct pesticide dose due to the absence and inaccuracy of measuring containers. The food industry has already mapped out a strategy for the implementation of the PLS through food associations; in particular, food, corn and soybean importers started to respond actively since the beginning of 2018. The food industry has requested a review of approximately 300 registration requests for Import Tolerance to Ministry of Food and Drug Safety, which brought about the temporary standards. Based on findings from surveys and interviews, major challenges are as follows; first of all, they have concerns that supply of domestic agricultural products and imported products may have negative impacts. Also, as there are possibilities of increase in failure rate to meet the PLS standards, agricultural production costs and price of agricultural products, the system needs to be kept corrected and supplemented through detailed review and monitoring. Implementation of the PLS may have influences on the condition of domestic production such as the low suitability and the increase of production costs stated above. In order to understand the impact of increase in pesticide costs on price of agricultural products, we have conducted time series analysis on 34 products. The result shows that prices of red beans, spinach, radish, garlic and apple spiked after the increase in pesticide price and find new equilibria at the heightened prices. The review on the possible effects of increase in price of foods from the increase in price of imported crops showed that the price transferring effect is limited and unless there is a huge plummet of the imports, the PLS would not entail a spike in food prices. However, for some products, as there can be a short-term price volatility, the government should monitor the import trends of base crops during the implementation stage of the PLS. The PLS can make non-tariff barrier effects in terms of imports, while it could lead to the expansion of agricultural exports in the countries that introduced the PLS. As a result of analyzing the import effects on nuts and seeds, and tropical fruits conducted in 2017 through the gravity model identified that the PLS negatively affects the amount of import of nuts and seeds, and fruits in Korea as expected. However, the effect is not significant. We analyzed the export effects of PLS adoption on Korea's main export items using Japanese data due to data restriction; according to the analysis, the introduction of the PLS system was estimated to have a positive effect on the amount of export of apples, grapes, and strawberries, which proved the possibility of expanding exports by adopting the PLS. This study established five basic and detailed strategies for a smooth implementation and stable managing of the PLS. First, we should minimize the damages to the farmers who are expected to be a great victims of implementing PLS. To achieve the goal, the government need to strengthen the guidance period for safety inspection. Subsequently, it can lead to stable production and supply of safe agricultural products. Second, it is difficult for individual farmers to grasp all pesticides by item. In order to use them appropriately, it is necessary to strengthen the expertise of pesticide distributors and sellers, who are the main source of information for farmers. Also, advancement of pesticide management system, improvement of small packaging of pesticide, measuring container and pesticide labeling and development of general-purpose pesticides will be needed. Third, we need to actively seek a way that the PLS can lead to the expansion of domestic agricultural exports. Besides, the government should explore new markets by utilizing the signaling effect and establish export strategies in detail in order to maximize the export effect of the PLS. Fourth, institutional supplementation including cooperation among ministries, a seamless transition from the provisional standard to a definite standard and the operation of a dispute settlement support team should be made. Lastly, the government should provide education and publicity of the PLS not only for farmers but also for pesticide sellers, distributors, consumers, and exporting countries. With the efforts, we expect that the government would achieve the goal of supplying safe agricultural products in a stable manner and expanding the exports of domestic agricultural products. Researchers: Park Misung, Moon Hanpil, Suh Daesuk, Seok Junho, Cheu Sungmin Research period: 2018. 5. ~ 2019. 2. E-mail address: mspark@krei.re.kr |
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