The purpose of this study is to find ways to stabilize supply & demand and price centering on prior management and post management by understanding problems with government policies, policy implementation organizations, wholesale market, producer organizations and dealers at this stage unstable supply & demand and price instability are worsening .
Stable supply & demand and price stabilization are primary aim of agricultural policies and are most important in stabilizing income of producers and consumer price. However, farm-product prices have continued to rise all over the world due to anomaly climate caused by global warming . Domestic supply & demand and price are unstable due to fluctuation of market price, labor shortage and shortage of curable area. As chief producing district of vegetable moves according to cropping season, the change in cultivated area is great. In addition, since vegetable grows on the bare ground, production of vegetable is venerable to climatic change. It is difficult to maintain appropriate production in vegetable culture as proper management and mechanization are not introduced into vegetable industry though vegetable industry is labor intensive industry. As the import of agricultural products from foreign countries including China has increased, domestic groundwork for agricultural production is decreasing.
The result of evaluating works on stabilizing supply & demand and price centering on Chinese cabbage, chili pepper and garlic revealed that price fluctuation has continued and climatic change and drop in degree of self sufficiency of food has a great influence on rise in price and import. Producer organizations that are implementing stabilization of supply & demand and price in Chinese cabbage, chili pepper and garlic believes that present work on stabilizing supply & demand and price is making a proper contribution to stabilizing supply & demand and price and raising income of producers though performance of the work is poor.
In calculating the size of Chinese cabbage, chili pepper and garlic reserves, usual size of reserves and size of reserves according to the rise on market price were calculated. Usual size of Chinese cabbage reserve except for processed cabbage was 30,000 tons∼38,000 tons which is 1.5% in comparison to domestic Chinese cabbage consumption. Usual size of chili pepper reserve was 11,000 tons which is 5.5% in comparison to domestic chili pepper consumption. Usual size of garlic is 15,000 tons which is 4.5% in comparison to domestic garlic consumption. Decreasing rate of supply in each item when price in usual years rises by stage and the size of reserves in comparison to consumption were estimated.
The result of calculating the cost of storage and processing according to price rising rate based on estimation of reserves in Chinese cabbage, chili pepper and garlic revealed that storage cost of Chinese cabbage produced in highland which has great price fluctuation was 5300 million won (1 month) ~ 45000 million won (4 months). It was revealed that storage cost of chili pepper was 8900 million won(1 month) ~ 60000 million won (4 months). It was revealed that storage cost of garlic was 17000 million won (1 month)∼126000 million (4 months). It was revealed that storage cost of processed Chinese cabbage produced in highland which has great price fluctuation according to price rising rate was 10000 million won (1 month)∼ 73000 million won (4 months). It was revealed that storage cost of processed chilli pepper was 15000 million won (1month)∼ 94800 million won (4 months). It was revealed that storage cost of processed garlic was 28000 million won (1month)∼ 183200 million won (4 months).
Short term problems that are related to supply & demand and price stabilization of vegetable are as follows ① Lack of reserve system in preparation for market failure ② Lack of facilities and experts in the field of storage and processing ③ Lack of transparency in discovering whole market price. Mid & long term that are related to supply & demand and price stabilization of vegetable are as follows ①Lack of system that connects producer organizations and producers ② Low contract cultivation ③ Heavy dependence on dealers.
Government's role in supply & demand and price stabilization is to build competition system of distribution of agricultural products in producing area and to promote the improvement of distribution system and expansion of cultivated area by cultivating a variety of producer organizations and enhancing crisis management capabilities while minimizing market intervention. Prior management is to boost contract cultivation by building and maintaining systematic cooperation between producers and producer organizations and to stabilize supply & demand and price of vegetable through incorporation of dealers in producing area. Post management is to organize reserve, storage and processing systematically to effectively cope with short term market failure and to secure transparency in discovering price by diversifying methods of discovering wholesale market price.
Stabilizing supply & demand and price of vegetable have been important goal in agricultural policy. It is expected that government's market intervention will be reduced gradually due to the changes in circumstances at home and abroad. Thus, it is necessary to improve government's capabilities to cope with short term market failure in the field of vegetable industry by establishing efficient business system in the field of reserve, storage and processing and introducing transaction system that aims at stabilizing price in wholesale market. In addition, it is necessary for producer organizations to play an active role in stabilizing supply & demand and price of vegetable.


Researchers: Byung-Ok Choi
E-mail address: bochoi@krei.re.kr