Research Reports
A Study on Improving the Policy Support System to Increase the Value Added of Agri-Food Export Products : Mid- and Long-Term Policy Support to Increase Agri-Food Exports
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AuthorPark, Kihwan
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Publication Date2012.12.30
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Original
Background of Research
Agricultural and fishery export is showing a remarkable increasing trend, attaining the biggest export in the country's history in 2011 with $7.7 billion of exports. The most important factor that has contributed to this achievement is the government's aggressive operation of the export support system along with the efforts of farmers and related organizations. But despite various positive effects such as domestic price support and job creation, agricultural export and the export support system have exposed a number of problems. Nevertheless, agri-food export should be continued not only to develop the export industry in the agricultural sector but also to create new demand and stabilize domestic prices of agricultural products. With such a background, this study was conducted to promote export in the agricultural sector by finding ways to improve export support policies and by building a new mid- and long-term support system.
Method of Research
In order to identify the present status of the agri-food support system, this study conducted a literature review and surveys of relevant organizations, and relevant data and laws are analyzed. Previous studies on agri-food export in Korea and overseas are also examined. In order to discuss the survey and analysis results, commodity exporter meetings were held five times and a discussion was also held with related officials of the Korea Agro-Fisheries and Food Trade Corporation. In order to analyze the use of the agri-food export support system, a questionnaire survey was conducted among 145 export farms that are members of government-designated horticulture complexes and 130 exporting companies. In addition, econometric methods such as GTAP, CGE, Random Effect Tobit, and I-O analysis were used to analyze the effectiveness of agri-food exports and the export support system.
Research Results and Implications
The purpose of improving the effectiveness of the export support system for agri-foods was designated in this study as ‘export industrialization of high value-added agri-foods.’ To accomplish this purpose, four basic strategies are developed as follows: first, build up a high-quality image of Korean products; second, promote organized export; third, contribute to increasing export farmers' income; fourth, improve the current export system (short-term task) and seek new support measures (mid- and long-term tasks).
The detailed measures to improve the export support system under the basic strategies are divided into short-term measures (for efficiency improvement of the existing support system) and mid- and long-term measures (for development of a new support system).
As for short-term measures to improve the export support system, the following are suggested: first, efficiently use the export logistics support scheme which is being reduced; second, inspire motivation to meet the original purpose of developing export-leading organizations; third, develop measures to increase the revenue for the overseas market exploration support project; fourth, enhance brand recognizability by strengthening export support PR activities; and fifth, provide selective and intensive support by evaluating the priorities of export support projects.
As for measures to introduce a mid- and long-term export support system, the following are suggested: first, promptly introduce a new alternative system in preparation for abolition of export logistics support; second, aggressively introduce an agri-food export price stabilization insurance to secure stable supply of exports; and third, maintain export farms' production infrastructure and provide a support system to inspire motivation.
The agricultural sector is experiencing many difficulties due to the expansion of market liberalization resulting from global economic arrangements such as DDA and FTA. Moreover, it also reacts sensitively to the supply and demand situation due to the instability of domestic agri-food prices. Since there is the emergence of a decreasing consumption trend of agricultural products due to changes in consumers' dietary patterns, procurement of stable sales channels is an important task before anything else. Export is an important means of creating new demand and has much positive effect on the national economy, such as domestic price support and job creation. In 2011, the agricultural industry achieved an export of 7.7 billion dollars, the most in the country's history, through the government's aggressive operation of the export support system together with the efforts of farmers and relevant organizations, and it is steadily building the base for industrialization of exports in the agricultural sector. Nevertheless, since some problems have surfaced in the export process and the support system, it is necessary to solve the problems by complementing the present system and by introducing a new system, and only when the government continues to show interest and provide support in the process can the agricultural sector build a new export-oriented engine of growth.
Researchers: Ki-Hwan Park, Kyei-Im Lee, Kyung-Phil Kim, Dong-So Lee and Seong-Yoon Heo
Research period: 2012. 6. - 2012. 12.
E-mail address: kihwan@krei.re.kr
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