Promotion for the development of agribusiness venture has been
emphasized to enhance value added in agriculture through increasing efficiency
of the agricultural system, and to vitalize farm and rural economy through
increasing non-farm income of the farm household in Korea. However, policy
programs for the development of agribusiness venture have various problems such
as confused policy target, goal, and measurements to meet policy
implications.
Objectives of this study are as follow ; (i) to establish concept of
the agribusiness venture and identify implications of the development of
agribusiness venture in Korea, (ii) to identify current situations and problems
of the agribusiness venture in terms of policy programs and business itself,
(iii) to suggest promotional strategies for the development of agribusiness
venture. Followings are summaries of the major findings.
(1) Concept of the venture business implies that "new businesses get
high returns with new technology and idea, with high risk", in general. The
concept of agribusiness venture includes all the agriculture related businesses
without considering size, ownership, and type of business. This is expanded
concept compared with the 'agricultural venture(venture farm)' in terms of the
range and type of business. However, there are three different types of
agribusiness venture; Government approved venture businesses in agribusiness
sector(Type I), agribusiness firms which are not approved as venture yet(Type
II), and farm(or farmer) which are looking for high value- added products with
new idea and technology(Type III).
(2) Government enacted 'Special Law for the Promotion of Venture
Business' in 1997, and provided various incentives such as low rate capital
loan, cheap business site, technical advice, tax reduction, etc. for the
approved venture business. However, there are inefficiency problems because
these programs are introduced by the various organizations. Furthermore, these
programs have obvious limitation to promote agribusiness because there are no
speciality for this sector in the approval process, and limited number of
business incubator in rural area.
(3) Ministry of Agriculture and Forestry(MAF) introduced programs for
the promotion of agribusiness venture such as providing research fund for the
technology development of small medium industry (1998), establishing
agribusiness specialized investment cooperatives (2001), supporting for the
management of agribusiness venture incubator (2002), and organizing agribusiness
venture investment exhibition and business contest(2002). Although the MAF
improved in terms of policy category, there are questions what is the goal and
who are the target group because the MAF does not have master plan for the
development of agribusiness venture.
(4) Number of agricultural venture business is 27 which is 0.2% of
total government approved venture business 10,182 in 2002. If we expand the
category of agriculture into agribusiness, this number goes 304, or 3.0% of the
total venture business. In this case, agribusiness venture consist of food
processing(39.8%), farm machinery and agricultural inputs(16.8%), environmental
and new materials(16.8%), and bio-technology(16.4%), etc. Compared with other
venture business, agribusiness venture has less share of RD and venture
capital investment venture, larger share of rural area located venture.
(5) According to the survey results, key factors of the success
agribusiness are as follows : RD investment to develop new idea
and technology, development of high valued-added new products which
meet for the consumer's preference, differ-entiation in terms of
price, production process, and image, etc., specific business model
such as membership system, net-working, consumer relation management, link with
green tourism, etc., introduction of the various marketing
strategies such as electronic commerce and direct market with large shopping
mall.
While faced problems of the agribusiness venture are
differed from the stage of development. For example, agribusiness in the
planning stage faced lack of information and special knowledge, startup
financing and marketing strategies in the starting stage, and market share in
the growth stage venture business. To solve these problems with government
support, most potential agribusiness venture want to get government venture
approval.
(6) There are three principles for the development of agribusiness
venture. First, master plan for the promotion of agribusiness venture should be
prepared. Since agricultural sector has quite different characteristics, special
programs for the promotion of agribusiness venture are necessary. Second,
agribusiness venture program should be designed for the three different types of
target group. Especially, government concerns are necessary for supporting
RD and business incubator to develop new idea of the starting business,
while enforcing linkage with existing government support system through
introducing venture approval system for the (Type II). Third, promotional
strategies for agribusiness venture should be designed based on the stage of
development. For example, providing information and training opportunities are
critical in the planing stage, while capital, appropriate worker, and market are
important in the opening stage.
Following strategies for the development of agribusiness venture are
suggested ; RD for the development of venture idea,
education and training to cultivate entrepreneurship, providing
technology and information to help reasonable decision making,
establishing agribusiness incubator at the 'agricultural technology center' in
rural area, introducing government approval system for the
agribusiness venture, enforcing linkages with related policy
programs of the MAF to solve agribusiness venture's problems such as lack of
capital and market, etc. reforming government regulation and related
system to promote various business in niche market.
