Research Reports
Strategies for improving import system of spicy vegetables
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AuthorKim, Byoungryul
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Publication Date2010.07.01
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Original
The purpose of this study was to suggest the strategies for improving import system of spicy vegetables including red pepper and garlic which are under the tariff rate quota (TRQ) system resulted from the conclusion of Uruguay Round (UR) on agriculture.
The basic problems facing spicy vegetable industries are that the import of quasi or alternative products have surged since the implementation of TRQ due to the low rate of tariffs. For example, in quota tariff rate for red pepper is 270% while out quota tariff rate is 50%. Bounded tariff rate of frozen red pepper is 27%. The total import of red pepper increased from 29,915 M/T in 2000 to 86,323 M/T in 2008. In quota tariff rate for garlic is 50% while out quota tariff rate is 360%. Like red pepper the bounded tariff rate for frozen garlic is only 27%. The total impot of garlic also expanded from 54,316 M/T in 2003 to 53,452 M/T in 2008. Accordingly, the question on the effectiveness of TRQ has been continually raised, which was originally purposed to protect spicy vegetable industries. At present, major part of TRQ of red pepper is managed by state trading system, and part of it is allocated by the license on demand, while that of garlic is under the state trading system.
It is forecasted that cultivation area and production of red pepper and garlic would continue to decrease. In 2020, the cultivation area and production of red pepper will be 37,439 ha and 109 thousand M/T, 7,378 ha and 8,000 M/T less than in 2009 respectively. Similarly, in the same period, the cultivation area and production of garlic will be dropped by 1,373ha and 67,000 M/T.
There are four fundamental problems of import system of spicy vegetables. First, the TRQ function for protecting producers is vulnerable due to the import surge of quasi or alternative products. Second, owing to the state trading element, the efficiency of TRQ management is low. Thirdly, current import system of spicy vegetables may cause trade conflicts especially because of not fulfilling TRQ. Lastly, it may violate the spirits of fair trade in the domestic market by restricting fair competition.
The strategies for improving import system of spicy vegetables are suggested as follows; First, in order to make import system more efficient, part of TRQ should be managed by auctioning. Of course the government should keep certain amount of TRQ for stabilizing domestic market. Secondly, the state trading entity needs to import high quality of spicy vegetables to meet domestic demand. Thirdly, the early warnig system needs to be established to make domestic market stable. Fourthly, illegal marketing of import products should be strongly controlled.
Researchers: Byung Ryul Kim, Oh Bok Kwon, Young Kwang Sin, Suk Ho Han and Min Ji Park
Research period: 2010. 2. 25~6.30
E-mail address: brkim@krei.re.kr
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