Objective of Research
The growing eco-friendly agriculture contributes to increasing the importance and consumption of organic waste fertilizers. The support policy for inorganic fertilizers until the 1990s changed to support organic waste fertilizers. This is government’s largest-scale project for supporting farmers for agricultural materials now, and 160 billion of subsidy is spent for buying organic waste fertilizers. The subsidy is also spent for upgrading organic waste fertilizer production facilities. The subsidy is also spent for facilities for reducing stench from livestock excrement.
Despite various support programs and increased consumption, there are few cases of comprehensively examining use, production and distribution of organic waste fertilizers, and involved issues thereof. Various issues exposed in each step have been sometimes discussed. In addition, related support programs frequently change to result in difficulty to study the cases.
The interest in organic waste fertilizers is not so great as the importance thereof in agriculture.
In this context, this study aims to describe types of organic waste fertilizer producers and distributors, farmer’s use thereof, and difficulty in using them to establish a strategy to address the involved issue.
External variables related to organic waste fertilizers, the organic waste fertilizer market and industry, producer’s difficulty in production and sale, research and investment, and competition among the producers are described. Operation and distribution of sellers in charge of distribution are also analyzed. An analysis is made of farmers’ buying and using organic waste fertilizers, their evaluation and satisfaction, and difficulty in buying and using them. Issues found in reviewing related fertilizer management regulations and strategies for improvement are described.

Result of Research
A favorable external environment factor is the steadily growing organic waste fertilizer market so far. It is natural that there has been an increasing request of organic waste resources followed by composting and making animal feed. This means that most related policies are very favorable. Exemplary company-friendly factors include government subsidies for buying organic waste fertilizers, subsidies and loans for projects for supporting livestock excrement treatment facilities, and funds for organic waste fertilizer producers’ upgrading their facilities, and support with environment policy funds.
On the other hand, there are unfavorable factors as well. Korea’s and overseas economic growth downturn, poor farm household economy and reduced farmland areas are negative effects on consuming and expanding organic waste fertilizers. Shrinking eco-friendly agriculture is also an unfavorable factor.
Competition among organic waste fertilizer producers is predicted to gradually be fierce. Organic waste fertilizer-dependent management, non-universal facilities, and limited advance to the overseas market are factors intensifying competition.
Exemplary organic waste fertilizer producer’s burden includes seasonal demands for produced raw materials and finished products, and a given period to sell them because they are bio materials, strong middleman’s influence on distribution thereof, and request of discount and support. Exemplary factors which intensify competition include no specific quality required because of non-specific products, non-price unlimited competition and the like.
Some factors contribute to mitigating rather than triggering competition. Exemplary things that make superficial price competition difficult include positive evaluation of future market, production by means of non-specific technology, contract and supply through Nonghyup. Farmer’s high faithful purchase and non-competition in raw material purchase are also a factor of mitigating competition.
New producer’s entry into the organic waste fertilizer industry threatens existing producers. One of factors of intensifying the threat is positive evaluation of the future market. No need of cutting-edge technology and no differentiation among products allow new producer’s easy entry into the market. Current lenient regulations are also favorable.
However, a lot of capital is required for various facilities and equipment for producing organic waste fertilizers, and establishing a sales network. The scale of initial capital investment is too much in comparison with the small amount of sales. General facilities can be used for producing the organic waste fertilizers. New producers need a lot of capital.
There are threats from farmers and distributors. Distributors exert great influence on the current distribution process of organic waste fertilizers. They select producers and organic waste fertilizers to sell them to farmers. While undocumented contract is common, it is hard to control products and manage payment. Many farmers’ high interest and involved people’s influential opinion are also a barrier to ensuring long-term customers.
Of course, it is possible to tackle the aforementioned threats with ideal non-price competition. Non-differential judgement for each product of a producer can rather facilitate marketing. Positively thinking the future market reduces the threats.
This study makes the following suggestions for developing the industry on the basis of the aforementioned factors involved in the industry.
1) Stabilize the domestic market to be adapted to imported products.
2) Diversify management.
3) Ensure stable supply of high-quality raw materials and supplementary materials (including joint purchase).
4) Further strategically make an investment in R&D.
5) Plan early order, joint delivery, and collaborative delivery.
6) Streamline the complex distribution system.
7) Provide information to consumers and conduct PR.
8) Design a micro strategy for each distributor.
9) Appropriate adaptation to the political support program: inspect the application system. Straighten out the logic of conflict, and policy projects. Review the same support scheme as the grade system. Establish a strategy for tackling epidemic livestock diseases.
10) Streamline related regulations and establish a system for managing organic wastes.
However, the development strategy suggested in this study cannot be a strategy employed directly to develope individual organic waste fertilizer producer. It is because issues and judgement of a strategy vary with the situation of each producer. Because the aforementioned suggestion is general analysis and conclusion, individual producers can or cannot accept the suggested strategy. Nonetheless, the aforementioned analysis and the suggested strategy for development will help producer’s judgement of values.

Researchers: Kang Chang-yong, Park Hyun-tae, Seo Dae-seok, Kang Seong-pil
Research period : 2014. 1. ~ 2014. 12.
E-mail: cykang@krei.re.kr